Before the pandemic, finding good quality child care could be challenging. Now, it’s even harder.
Parents of young children are being told to return to the workplace, only to find countless day cares closed. For many families, this constitutes a crisis.
Unfortunately, President Joe Biden’s Build Back Better plan would keep it that way.
As currently written, the plan would introduce unprecedented federal spending on early childhood care and education. It would fund preschool for all 3- and 4-year-olds and subsidize child care costs so that no family making $300,000 per year or less will pay more than 7% of their income on other forms of child care.
A New York Times columnist calls this “revolutionary.” It is, in the sense that it is without precedent for fiscal recklessness.
The Biden administration claims that universal pre-K would set children up for academic success and that child care subsidies will increase female labor force participation “driving economic growth.” Unfortunately, it would do neither. In fact, about the only thing this proposal would do make the child care crisis worse.
Why? Because the proposal would dramatically increase the already massive regulatory burden on providers. It would require lead pre-K teachers to hold bachelors’ degrees, peg salaries to those of unionized teachers and impose maximum teacher to child ratios, among other provisions.
The Institute for Justice ranks “public preschool teacher” as the “most widely and onerously licensed occupation” in the country. Regulations, such as those requiring over five and a half years of experience and education, on average, before one is legally allowed to care for a child, exist in 49 states and the District of Columbia. The Build Back Better bill would extend these regulatory burdens to all preschool teachers, public or private.
Rather than impose new regulations on the already over-regulated child care sector, lawmakers should fix some of the problems that already limit parents’ child care options and needlessly drive up costs.
For example, some employers offer on-site child care to their employees as a benefit. Many more would do so if regulations were reduced. Currently, the Fair Labor Standards Act requires employers that provide on-site child care to include the value of that benefit in overtime pay calculations. In other words, in addition to paying employees 1.5 times their hourly wage for overtime, employers must also pay them 1.5 times the hourly value of their child care benefit.
You don’t get extra health insurance or retirement benefits for working overtime. Childcare benefits should be treated the same way. Removing the distinction between child care and other employer-provided benefits would make it easier for employers to offer their workers on-site child care.
On-site child care is an attractive option for many employees who have children or plan to start families. Without this regulation—and the extra educational requirements and wage increases that would be mandated under Build Back Better — many more employers could offer convenient, high-quality child care. It would be a great tool for employee recruitment and retention — and no federal subsidies would be needed.
In another instance of the government limiting child care choices, tax law requires any family that pays a baby sitter or in-home child care provider more than $2,300 in a single year must treat them as a “household employee,” rather than a contractor. This subjects the family and the care provider to a barrage of regulations and taxation – such as Medicare and social security tax withholding. The paperwork is a significant burden for many families, especially those who already face barriers navigating government systems.
Every family has unique needs. Satisfying them requires a wide variety of child care options, not a system of identical providers conforming for government approval. For child care to work for everyone, children must be allowed to attend the facilities that best meet their needs and enable them to achieve their full potential. These options could be employer-provided centers, family-based care providers, or something else entirely.
Government has already shown how it provides child care through decades of Head Start, the failed Great Society-era government-run preschool program that will serve as the quality standard for the proposed programs in the Build Back Better plan. Randomized controlled trials of Head Start find no evidence of academic improvement later in life.
Beyond families and children, taxpayers will also suffer, as it is clear these child care and pre-K entitlement programs won’t come close to paying for themselves.
Instead of building taller barriers, regulators should reduce burdens to allow parents to decide what’s best for their children and enable providers to respond to those preferences. It is time to reject the government’s track record of failure and let families solve the child care crisis.
John Schoof is a researcher and project coordinator in The Heritage Foundation’s Center for Education Policy. Teresa Schuster is in the think tank’s Young Leader Program.
