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Money Matters: Economics and the Challenges of Childcare

(The cost of childcare has more than doubled in the last two decades—making it hard for mothers to raise kids while also working a job. [Ketut Subiyanto])

May being the month we celebrate motherhood, it’s worth analyzing all the struggles mothers face when it comes to motherhood, employment, and childcare.

American businesses lose around $12.7 billion annually because of their employees’ childcare challenges. As the pandemic has taught us, most childcare in America falls on the shoulders of mothers, grandmothers, aunts and other women in our communities. This has a significant impact on the labor force.

Mothers’ participation in the labor market has increased in the past years, going from around 47% in 1975 to 71.5% in 2018. This increased participation does not capture the number of women who have been forced to leave the labor force to provide unpaid family care, including childcare to their children. Often, many women with children are forced to decide whether what she might make from work will be more than what it costs to pay for childcare. Too often women find they either need to choose cheaper, but potentially lower-quality, childcare or leave the work force to become a full-time caregiver.

One of the main reasons that cause this situation is the high cost of childcare in the United States. In 2014, a low-income family earning less than $50,000 per year designated around one-third (!!!) of their income to childcare, leaving just a small portion for other expenses. In the last two decades, the cost of childcare has more than doubled while wages have remained relatively stagnant. As a result, mothers face an impossible challenge: trying to give the best affordable childcare for their children or keep the work/career they love and having enough money to feed their families.

Having to leave the labor force due to the lack of affordable childcare should not be a problem for women.

To complicate matters further, nowadays a huge percent of mothers (around 64%) are the primary breadwinners or co-breadwinners in their household. Black and Hispanic mothers in particular are more likely to play this role for their families. More than eight in 10 of Black mothers are breadwinners or co-breadwinners as well as six in 10 Hispanic mothers. Moreover, both Black and Latina mothers tend to be the lowest-paid among other groups of women, making access to childcare even more difficult. Some of the Latinas who have just migrated to the United States often only have access to unskilled jobs with low wages. Moreover, Latinas with kids under age six struggle to find proper childcare, having to ask friends, family, or neighbors to take of them. In the worst cases, mothers have to leave their young children alone at home, often responsible for even younger siblings. All of this simply to be able to work and have enough money to support her family here and in her original country. Situations like this are faced not just for thousands of Latinas but also for Black mothers every day.

Childcare shouldn’t be seen as something that is an individual problem left up to parents; instead, childcare should be seen as a public good. A lack of affordable and accessible childcare doesn’t just hurt mothers, their income and careers; it also affects businesses who are losing access to an important talent pool. Billions of dollars are lost when women leave the workforce.

Increasing access to affordable, quality childcare will ensure that women can pursue their career and take care of their family at the same time. Affordable, quality childcare will also increase employment and revenues for companies who currently have to leave their jobs due to lack of childcare.

We need childcare reform. Our elected officials and leaders should take action on increasing access to quality, affordable childcare. Regulating and supporting good quality and affordable childcare will improve the welfare of mothers (especially Black and Hispanic mothers), their families, and even non-parenting employees. Moreover, this will have a positive impact on the economy by increasing employment, productivity, and spurring economic growth. Because no mother will be put in the position of deciding between good childcare or a good job.

I look forward to meeting you back here next month with new economic topics to be discussed. If you have questions for me about economics, send an email to and I’ll answer it!


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