treasury: Yellen, Harris to argue that investment in child care benefits overall economy – World News
Congress is considering a $3.5 trillion package of measures that would include: free preschool for all 3- and 4-year olds; boost pay for childcare workers, 95% of whom are women; cut the costs of such care in half for most families; and make permanent a child and dependent care tax credit.
Treasury said the measures would expand both demand for childcare and supply of such care, providing lifelong positive effects for children, their parents, and the economy as a whole.
“The president’s proposals are crucial to maintaining our economic success,” Treasury said in the report, citing multiple positive spillover effects for wages, society at large and employment.
“A well-funded child care sector will help parents remain in the labor force, work the number of hours and schedule that are best for their career and family, earn a living and join in our shared economic prosperity,” it said.
The report laid out what it called the multiple market failures of the current system, which relies on private financing, and urged changes that would allow parents to contribute more fully to the economy and make a solid living.
It noted that the average family with at least one child under the age of 5 now must devote about 13% of family income to pay for childcare, but President Joe Biden’s proposals would reduce that amount to no more than 7%, it said.
The United States ranks 35th of 37 countries tracked by the Organization for Economic Cooperation and Development in terms of public dollars spent on early childhood education and care, relative to gross domestic product.
While France invests about $7,000 per infant to five-year old, the United States invests just $2,400. That in turn depresses income for childcare workers, the report noted.
With average annual pay of $24,230, childcare workers are in the second percentile of all professions, and more than 15% of them are below the poverty line in 41 states, forcing them to rely on public services for their economic needs, the report said.