Economists look upon a jobless rate that sinks to 3% or below, as it has in Massachusetts and New Hampshire, as a sign of full employment. Pretty much anyone who wants work can find it. From a jobs perspective, we couldn’t be in much better shape.
But in a labor market like the one in the Merrimack Valley and North Shore — flourishing with technology, bio-science and advanced manufacturing companies — full employment has downsides. It signals that we’re near the bottom of the well of skilled workers, not counting those who’ve just graduated or moved into the area. That can frustrate businesses with plans to expand.
All the more reason to engage people who already live here and are well qualified to work in those jobs, but who are sitting on the sidelines of the workforce because of the prohibitive cost of child care. For them, figuring out cheaper, more accessible child care options is essential to going to work.
The stakes are even higher for parents with lower-skilled jobs, in retail or restaurants or service industries, who live on modest incomes. They need work. But first, they need affordable preschool and infant care.
The cost of child care is a vexing problem here, even if it’s one mostly felt by parents of young children. A 2016 report by the Economic Policy Institute found that Massachusetts has the second-highest infant care costs of 50 states and the District of Columbia — an average of $17,062 per year. Typical child care costs for a preschooler were $12,781 per year.
Clearly the costs are more difficult to manage for families with more than one child. Someone with an infant and a preschooler needs to earn $30,000, based on the averages, just to cover the cost of showing up for work each day.
One federal government guideline says childcare should be no more than 10 percent of a family’s income to be considered affordable. If that’s true, the 2016 report noted, fewer than 1 in 5 families in Massachusetts can afford infant care.
Highlighting the problem of child care that is out of reach isn’t the hard part. More difficult is finding solutions.
As the presidential primary season opens, some Democratic candidates are talking about child care for everyone, or access to free care by anyone who needs it. That would put people to work, but at what cost? Affording that benefit is likely out of our collective reach.
Gov. Charlie Baker and others on Beacon Hill have focused on more surgical improvements. In the current budget year, for example, the state ratcheted up subsidies for child care providers who serve children from qualifying families. The increase, worth $20 million overall, represented an important contribution to teacher pay and improved programs. Still, it doesn’t touch the broader issue.
Making a real impact in the child care equation can’t just be left to government subsidies. In Massachusetts, especially, policymakers also should examine why child care costs are so much higher here than anyplace else.
Max Gulker, a fellow at the American Institute for Economic Research, has noted a wide range in child care costs throughout the U.S., and it’s not solely a function of cost of living. It also relates to regulation. States like Massachusetts, with more stringent rules for things like staffing ratios, staffing education levels, continuing education credits and even the square footage of child care centers, also end up with higher costs.
While regulations may be designed to guarantee healthier outcomes for children, Gulker has noted, they leave less flexibility for innovation among providers or even the fact that parents are usually a better judge of the quality of a child care center than a distant state regulator.
“Reducing regulations intended to protect the well-being and safety of children is not a comfortable topic, nor should it be,” Gulker wrote in a February article co-authored with Callum Hudson. “But given the number of children and families struggling under the status quo, it is very possible that lower regulations could reduce costs while on balance improving well-being and safety.”
It’s certainly something worth considering as part of a thorough study of child care costs, and how they are holding back our labor force.