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--:-- Duarte Giraldino: Welcome to In Conversation from Apple News Today. I'm Duarte Giraldino. Every weekend, we're taking you deeper into the best journalism on Apple News.
--:-- Duarte Giraldino: When the United States locked down last year because of the coronavirus pandemic, something that every working parent already knew to be true was exposed. This country's child care system is broken.
--:-- Duarte Giraldino: There is a severe shortage of child care workers. Rising child care costs are taking an even bigger toll on some working moms. As more and more parents get ready to go back to work in person, there's growing concern about the lack of child care options.
--:-- Duarte Giraldino: Now, the pandemic has been crushing to small businesses, and child care centers are no exception. Thousands have closed since March of 2020.
--:-- Duarte Giraldino: Congress allocated more than $50 billion in COVID relief funding to support child care, but it wasn't enough. The industry is still in crisis.
--:-- Duarte Giraldino: Now, as part of the Build Back Better plan, Congress is debating whether to allocate even more money to cut child care costs for families and to provide free preschool to every child in the U.S.
--:-- Duarte Giraldino: But here's the thing. Our child care system isn't broken by accident. A lot of this is by design.
--:-- Duarte Giraldino: Claire Suddeth is a reporter for Bloomberg Businessweek, and she recently wrote about the deeply flawed child care industry in the U.S.
--:-- Claire Suddath: Hi, Duarte.
--:-- Duarte Giraldino: Hi, Claire. She breaks down what's wrong with the system today, some ways we might be able to fix it, as well as exactly how we got here.
--:-- Claire Suddath: I mean, the story of America's need for child care is the story of American women going to work.
--:-- Claire Suddath: And oftentimes when we think about that, we think about the 1960s and 70s of millions of women entering the workforce in unprecedented numbers.
--:-- Claire Suddath: But the reality is that women have been working and holding jobs for as long as we have had jobs exist.
--:-- Claire Suddath: The earliest known place where people were providing care for children while their parents worked was just a nursery attached to a workroom in Philadelphia that employed widows whose husbands had died in the 1793 yellow fever epidemic.
--:-- Claire Suddath: It was, at the time, an innovative idea of like, why don't we watch the children so that the women can work, and they have to work because their husbands have died.
--:-- Claire Suddath: But the assumption was that if there was a husband around, the wife would stay at home and raise the kids and the husband would go to work.
--:-- Claire Suddath: You described another incident in your work about women tying their toddlers to a leg of a table because they couldn't find childcare.
--:-- Claire Suddath: Yeah, so Jane Adams was a philanthropist who started what's called Hull House in Chicago.
--:-- Claire Suddath: And they started offering child care because she and the other women that she worked with had learned that garment workers in Chicago were tying their children to table legs in the kitchen and then sometimes leaving them with, you know, a bowl of porridge or something to eat on the floor while they went to work because they didn't have anyone to watch them.
--:-- Claire Suddath: Child care became even more urgent during World War II when about 1.5 million women with children under the age of 10, entered the workforce.
--:-- Claire Suddath: At the time, it was perceived as this sort of patriotic duty, the Rosie the Riveter, you know, going to work in the factory.
--:-- Claire Suddath: But actually, there were surveys at the time, women were working because they needed the money.
--:-- Claire Suddath: It was the same issue. Their husbands were fighting overseas or had been killed, and they weren't making the money that they used to be making.
--:-- Claire Suddath: And so all these women went to work and didn't have anywhere to put their kids.
--:-- Claire Suddath: And in the early, early days of the war, it was just a free-for-all.
--:-- Claire Suddath: There are plenty of historical accounts of what women did to come up with child care, but there was this one movie theater in Muncie, Indiana that the proprietor of the movie theater kept complaining because women would drop their kids off to watch movies and then just leave them there all day or evening as they went to work.
--:-- Claire Suddath: And there was a factory in California where women had to come up with the solution of leaving their kids in their cars, and then they would park their cars under the factory window so that they could lean out and look and check on their kids.
--:-- Claire Suddath: In 1940, Congress passed the Lanham Act.
--:-- Claire Suddath: It established more than 3,000 nationally run daycares. People called them Lanham Centers.
--:-- Claire Suddath: It, you know, fundamentally changed the concept of child care in America.
--:-- Claire Suddath: It was federally subsidized and federally run daycares for children.
--:-- Claire Suddath: And ultimately mothers ended up paying about to a day
--:-- Claire Suddath: That extraordinary Yeah I know It absolutely extraordinary if we could have something like that
--:-- Claire Suddath: It was incredibly successful.
--:-- Claire Suddath: There were surveys of women who were using the centers at the time, and the vast majority of them, somewhere between like 80 and 96% of mothers who had used the Lanham Center services said that they liked them and that they trusted them.
--:-- Claire Suddath: And obviously, nothing is perfect. But it was a true comprehensive solution to a problem.
--:-- Claire Suddath: But once World War II ended, the funds were withdrawn and all of the centers closed.
--:-- Duarte Giraldino: President Dwight Eisenhower, his position was essentially that by having these centers open, it would discourage what he considered the traditional role of the woman.
--:-- Claire Suddath: What is this argument?
--:-- Duarte Giraldino: Eisenhower was saying that while he understood that many women were working because they had to, many mothers were working because they had to, he distinguished between a financial need and what he referred to as women who prefer a career to the active career of real motherhood.
--:-- Claire Suddath: And he said those women should reconsider how they were harming their children by not focusing on motherhood.
--:-- Duarte Giraldino: And so, you know, even though back then the Bureau of Labor Statistics Commissioner laid out the facts and said, women are entering the workforce in unprecedented numbers.
--:-- Claire Suddath: They're not disappearing. This is a permanent feature of the American economy.
--:-- Duarte Giraldino: And he said, unless something is done about this, we're going to have a serious child care shortage on our hands.
--:-- Claire Suddath: And so the government has known about this for a very long time and yet has not done much beyond some chronically underfunded programs for low-income families.
--:-- Duarte Giraldino: Eisenhower wasn't the only one. A decade later, Richard Nixon vetoed a bipartisan bill that would have created a federally funded network of child care centers.
--:-- Claire Suddath: He argued it was, quote, dangerous for the federal government to play a part in how a family raises their children.
--:-- Duarte Giraldino: You know, we're still hearing that argument today.
--:-- Claire Suddath: Listen to Idaho State Representative Charlie Shepard during a debate a few years ago.
--:-- Charlie Shepard: Any bill that makes it easier or more convenient for mothers to come out of the home and let somebody else raise their child. I just don't think that's a good direction for us to be going.
--:-- Claire Suddath: But as we all know, that's the direction we're already headed in.
--:-- Duarte Giraldino: Even considering the huge number of women who have quit their jobs because of the pandemic, women still make up nearly half the U.S. workforce.
--:-- Claire Suddath: And without some sort of mechanism to help support the child care industry, what we're left with is a system where everybody loses.
--:-- Claire Suddath: For one, kids are losing out. There's a wealth of literature that says in the ages zero to five is when most of the brain development of a kid happens.
--:-- Claire Suddath: And yet our public school system mostly kicks in at five. So we're starting our kids off behind.
--:-- Claire Suddath: Parents are also hurting. Many American families just can't afford child care.
--:-- Claire Suddath: The average two-parent family, it's about 13% or 14% of their annual take-home pay.
--:-- Claire Suddath: And then for a single parent, it runs as high as 36%, which then begs the question, well, if you're paying 36% of your income on child care, how are you affording rent, groceries?
--:-- Claire Suddath: And the answer is they're not.
--:-- Claire Suddath: One component of what would be considered the basic necessities of your life at that point, you are not providing.
--:-- Claire Suddath: And it has gotten to the point where huge swaths of Americans, you know, middle-class Americans are priced out of this, not to even mention low-income families, like people who are unemployed.
--:-- Claire Suddath: Like if you are unemployed, you need to start looking for jobs. So how can you look for jobs if you don't have the money to put your kid in child care so that you can start looking for jobs?
--:-- Duarte Giraldino: What were some of the stories you heard just anecdotally about some of the extreme things that people had to do, not just during the pandemic, but in, as you describe it, the before times in order to solve this problem?
--:-- Claire Suddath: One of the women that I talked to for this story is a mother of three.
--:-- Claire Suddath: She moved to North Carolina and enrolled in law school and started looking for daycares.
--:-- Claire Suddath: And daycares in North Carolina for a child two or younger is still over $1,000 a month.
--:-- Claire Suddath: And on a single mom law student budget, that just was not possible.
--:-- Claire Suddath: She said she didn't even entertain the idea.
--:-- Claire Suddath: So she started looking at Craigslist ads and she found an ad for a woman who said she watched kids in her home for a week
--:-- Claire Suddath: So Liz who is the mom was like great I can afford that That fine
--:-- Claire Suddath: So she put her kid in that for a little while.
--:-- Claire Suddath: And then her son came home one day and said that the woman had hit him.
--:-- Claire Suddath: So Liz pulled her son out of that place.
--:-- Claire Suddath: And so what she ended up doing was taking out a student loan and using the student loan to pay for daycare.
--:-- Claire Suddath: So she graduated law school with $140,000 in student loan debt.
--:-- Claire Suddath: Obviously not all of that was daycare related, but it definitely bumped it up a bunch.
--:-- Claire Suddath: And that's how parents and kids lose out.
--:-- Claire Suddath: But the child care providers, they aren't winning either.
--:-- Claire Suddath: No one goes into child care or opens up a daycare because they think they're going to make bank.
--:-- Claire Suddath: You know, the actual number, if you want to put a number on it, is child care workers make about $24,000 a year, even though I think it's about 87% of them have some form of higher education.
--:-- Claire Suddath: And that's absurd.
--:-- Claire Suddath: You know, I knew child care was incredibly expensive.
--:-- Claire Suddath: And I knew that the people who provide that care for children do not make very much money.
--:-- Claire Suddath: But I did not understand how they could be true at the same time.
--:-- Claire Suddath: How am I paying $22,000 a year, but the average worker is making $24,000 a year.
--:-- Claire Suddath: And I talked to a lot of experts, and then I talked to many child care providers and child care center owners themselves.
--:-- Claire Suddath: And I think what I did not know what I was surprised by was just how complicated the finances of running what seems like a fairly simple business actually are.
--:-- Claire Suddath: Even the pandemic aside, in the before times, you know, margins were really thin.
--:-- Claire Suddath: How thin is thin?
--:-- Claire Suddath: What are we talking about in terms of, given all the requirements, given all the kids, how much is the actual profit?
--:-- Claire Suddath: According to the U.S. Treasury, they have a 1% profit margin.
--:-- Claire Suddath: 1%?
--:-- Claire Suddath: Yeah.
--:-- Claire Suddath: And that's in healthy economic times.
--:-- Claire Suddath: That's not in the pandemic.
--:-- Claire Suddath: That is what they entered the pandemic with, which is why when everything shut down and families pulled their children out of child care, they had no money to continue.
--:-- Duarte Giraldino: So that begs the question because we know that there are subsidies out there for child care, but when a private child care school or daycare center takes those subsidies, does the parent make up the difference or are they losing either way?
--:-- Claire Suddath: There's something called the Child Care and Development Fund, and it's a block grant that goes to all 50 U.S. states and allows them to figure out how they're going to allocate the money for child care.
--:-- Claire Suddath: And there are requirements on paper that they're supposed to follow in order to make their subsidy program qualify to get this money.
--:-- Claire Suddath: But in reality, there's no punishment if you don't do it.
--:-- Claire Suddath: The government is still going to give you the money.
--:-- Claire Suddath: On paper, what they're supposed to do is create a subsidy program for low-income families.
--:-- Claire Suddath: That subsidy program needs to cover 75% of the current market rate of care, meaning what daycares charge.
--:-- Claire Suddath: So who covers the remaining 25%?
--:-- Claire Suddath: In theory, the low-income families, but they're low-income.
--:-- Claire Suddath: And this is very expensive.
--:-- Claire Suddath: And usually, the subsidies are not enough to cover the care in such a way that they can afford it.
--:-- Claire Suddath: Because in reality, only two states, Maine and South Dakota, as of last year, had a subsidy program that was at that 70% mark.
--:-- Claire Suddath: All the other states subsidized at considerably lower rates, sometimes as low as 25%.
--:-- Claire Suddath: And so what happens is these businesses can't afford to accept subsidies because if they do, they lose money because it's rare for families who qualify for these subsidies to be able to come up with the other 75% to 25%.
--:-- Claire Suddath: So you end up with a stratified system where the families who can pay, who are affluent, oftentimes white, they end up in one sort of child care setting and everyone else is trying to scramble to find places that do accept subsidies or priced low enough that maybe they can make it work or they find stuff on Craigslist or for many families, you know, they can ask an aunt or an uncle or a grandmother or something to watch the kids during the day.
--:-- Duarte Giraldino: Even before the pandemic, the child care industry was in crisis.
--:-- Claire Suddath: Yeah.
--:-- Duarte Giraldino: And last year Congress allocated more than $50 billion to keep the child care industry from losing providers, but it didn't seem to work.
--:-- Claire Suddath: All the shutdowns caused enrollment to drop and about one in three child care businesses closed.
--:-- Claire Suddath: Now you talk about this all that money and still it couldn't stop the industry from getting dangerously close to imploding.
--:-- Claire Suddath: Were you surprised after all this research that you did and being a young mom, it's amazing to me in some ways that only one third of child care businesses have closed.
--:-- Claire Suddath: I am shocked that so many of them have managed to get by at all.
--:-- Claire Suddath: The amount of money that we gave the child care industry as a whole was not a lot of money.
--:-- Claire Suddath: You know, $52.5 billion sounds like a ton of money.
--:-- Claire Suddath: But one out of every 55 working women in the U.S. works in child care or early education.
--:-- Claire Suddath: And the CARES Act, which was the first relief bill, gave more money to Delta Airlines, the company, than all of those women who make up the whole industry combined.
--:-- Claire Suddath: If throwing more than $50 billion at this problem wasn't enough, what's it going to take?
--:-- Claire Suddath: Claire Sutter says, just look at other nations that have successful systems in place.
--:-- Claire Suddath: In other countries like the UK, France, South Korea, Italy, Israel, about 90% of three and four-year-olds in those countries are in preschool.
--:-- Claire Suddath: In the US, that number is 40%.
--:-- Claire Suddath: You know, the gold standard is France.
--:-- Claire Suddath: But France has much higher taxes, much more heavily subsidized child care.
--:-- Claire Suddath: It's called CRESH, and it's a system in place for infants from three months to three years.
--:-- Claire Suddath: And then at three years, they enter free preschool.
--:-- Claire Suddath: But it's a government program that is free up to a certain income threshold, and then it is heavily subsidized, like heavily.
--:-- Claire Suddath: I talked to a woman who lives in Paris, and she and her husband have excellent jobs, and they pay about $450 a month in Paris, in Paris, like the most expensive city in France.
--:-- Duarte Giraldino: Now here we have Biden with his Build Back Better plan.
--:-- Claire Suddath: How will it actually work?
--:-- Claire Suddath: Do you think that the Build Back Better plan will help solve this problem?
--:-- Claire Suddath: I think the answer to that question is it depends on what state you live in.
--:-- Claire Suddath: The reason why I have to sort of hedge it that way is because the plan is not creating a federal funding mechanism from scratch.
--:-- Claire Suddath: It is making money available to states should they come up with their own plans and decide that they want to do this.
--:-- Claire Suddath: And the requirements in the Build Back Better Act, they're good.
--:-- Claire Suddath: They're beyond anything that we've ever had before.
--:-- Claire Suddath: It's definitely a step in the right direction.
--:-- Claire Suddath: But it is contingent upon a state putting a plan in place and deciding that it is going to fix its own child care problem.
--:-- Claire Suddath: And so if a state is going to come up with a plan that hits all of these Build Back Better requirements, like requiring a living wage, capping families' costs at roughly 7% of their income, and making child care completely free for low-income families below a certain threshold, and a number of other things, but those are kind of the main points.
--:-- Claire Suddath: In order to do that, a state has to figure out how it's going to roll all of this out and require higher wages and provide money for the businesses themselves to pay those higher wages.
--:-- Claire Suddath: But if our current subsidy program says you have to subsidize at 75% and states aren't doing it now, and given the biases against working women, and also just the incredibly complicated nature of the problem, It takes a big leap of faith to think that all 50 states are going to come up with a plan that appropriately helps child care centers.
--:-- Claire Suddath: What does the future hold?
--:-- Claire Suddath: Do you think that this broken child care system can be fixed?
--:-- Claire Suddath: I think you have to say yes.
--:-- Claire Suddath: But I think this sort of incremental approach to, you know, putting band-aids over the worst cuts and bruises that we have and just hoping everything else will become manageable is not an ideal solution.
--:-- Claire Suddath: As I was reporting on this, I thought a lot about the U.S. health care system.
--:-- Claire Suddath: You know, the fundamental problem of health care is that it's too expensive.
--:-- Claire Suddath: And the Affordable Care Act drastically increased the number of people who have health insurance.
--:-- Claire Suddath: But health care is still really expensive.
--:-- Claire Suddath: And sometimes the solution is not something politically feasible in the U.S.
--:-- Duarte Giraldino: Claire, thank you so much for being in Apple News today.
--:-- Claire Suddath: Your work is excellent, I really enjoy chatting with you.
--:-- Claire Suddath: Thank you.
--:-- Duarte Giraldino: Claire's article about child care in the U.S. is available now on Apple News.
--:-- Duarte Giraldino: You can find the link on our show notes page.
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--:-- Duarte Giraldino: Thanks for listening to In Conversation from Apple News Today.
--:-- Duarte Giraldino: Join us next time for more in-depth conversations with the world's best journalists.
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