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The High Cost of Child Care and Lack of Paid Leave Are Holding Back Many Working Parents

Ariel Skelley | DigitalVision | Getty Images

A lack of paid leave and access to quality child care has long been an issue for working parents in the U.S., advocates argue.

The coronavirus pandemic has only exacerbated the issue, with some parents — mainly women — ditching their jobs to care for their kids. A September report by Lean In and McKinsey & Company found that 1 in 4 women were considering leaving the workforce or downsizing their career.

"The pandemic really put in front of people how much caregiving is truly a part of what makes the economy work," said Lelaine Bigelow, managing director of external affairs at the National Partnership for Women & Families.

The Biden administration recently responded by proposing 12 weeks of paid family and medical leave, which workers would get within 10 years. They could receive up to $4,000 a month, with at least two-thirds of their average weekly wages replaced. The program, part of President Joe Biden's $1.8 trillion spending and tax credit plan, would be paid for with payroll taxes.

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Biden's plan also would spend $225 billion over a decade towards child care for children under the age of 5. It ensures families only pay a portion of their total income for the services, with the average family saving $14,800 a year on child care.

Some companies already provide some form of assistance to their employees. A quarter of employers offer paid parental leave to at least some employees for the birth or placement of a child, according to a 2019 survey by the Kaiser Family Foundation.

When it comes to child care, only 4% of employers offered subsidized child-care centers or programs, according to the Society of Human Resource Management's 2019 employee benefits survey

An additional 4% provided nonsubsidized centers, either company-affiliated onsite or nearby, and 11% offered a referral service to providers.

Yet, it is something parents desire. According to a recent survey by child-care provider Bright Horizons, 46% of working parents want their employer to provide some form of child care or emergency child care.

Amanda Fallon, a 38-year-old mother of a 4 year-old and 8 month-old, is one of those who has a child-care center located on her employer's campus in South San Francisco, California. While tuition isn't subsidized by the company, Genentech, it is discounted based on family income.

That came in handy particularly during the pandemic, since Genentech allowed employees who used the center back on campus ahead of schedule, Fallon said. She was able to work and have her two children cared for nearby.

"I have been able to navigate those challenges with much greater ease because of the support I had from my employer," Fallon said. "That is pretty amazing."

While employers may provide relief for their workers, a national policy is needed for all Americans, advocates say.

Under Biden's plan, low-income families would have all of their child-care expenses covered. Those who make 1.5 times their state median income would spend no more than 7% of their annual pay.

Small businesses also argue that it would help them compete against larger companies for workers.

"We have to be very careful when we look to the private sector to solve a massive scale program like this because it has a direct impact on the small-business economy," said Sarah Cozier, spokeswoman for Main Street Alliance.

"In order to be able to support a thriving small business owner and their employees, it is important that the government comes in with those [child-care] subsidies so we are at a level playing field."

Kate Davenport, co-president of Eureka Recycling.
Source: Kate Davenport
Kate Davenport, co-president of Eureka Recycling.

For Kate Davenport, co-president of Minneapolis-based Eureka Recycling, a national paid leave policy would finally allow her to offer it to her 120 employees. Right now, it's financially out of reach.

"As a small business, we struggle to compete. We don't have the same profit margins that some of the big companies do," said Davenport, who already pays employees a living wage, provides paid time off and covers health-insurance premiums 100%.

She's also had workers turn down promotions due to child-care concerns.

"It would create a benefit cliff," she explained. "If they get the promotion and make $5 to $10 more an hour, then they wouldn't qualify for child-care subsidies and yet it's not enough money to pay for child care."

In the end, it is about bringing parents, particularly moms, back to work.

"If we are truly worried about an equitable economy and growth in our economy, we have to put policies in place that support our women workers," Crozier said.

"We also have to acknowledge that women are not the only ones impacted by these things."

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