Economists are still trying to recover from recent reports on the nation’s economic recovery.
The Job Openings and Labor Turnover Survey (JOLTS) report for April, released May 7, was indeed a jolt, and not just acronymically. It showed that the U.S. economy added only 266,000 positions during that period, about a fourth of what had been expected.
Economists were like pollsters the day after the “wrong” candidate won the election, trying to figure out where their calculations had gone awry. Had they misread the data? Did hordes of voters change their minds on the way to the polls? Had they been deliberately misled by dissembling respondents?
The behavior of the U.S. economy is arguably more complex and mysterious than the mind of the most poll-adverse voter, and the befuddlement of the economists therefore more understandable.
Where had all those billions in stimulus spending gone? Nobody has the answer for sure. We wallow in a wetland of hypotheses. The masses of hard data seem to lead only to the softest answers, no matter how firmly asserted.
The simplest — and perhaps the most disconcerting answer — is that during the pandemic Americans became addicted to staying at home and collecting federal checks; that the work ethic has withered to the point where employers cannot find people to hire. People just don’t want to work anymore.
As columnist Daniel Henninger observed in The Wall Street Journal, “It was assumed that once most people were vaccinated, they would want to revive pre-pandemic habits. But the Labor Department’s report on jobs and an avalanche of anecdotes suggest that one of the things many people want most to get away from is work itself.”
Even if this is true (follow the anecdotes), there is a cure coming for this outbreak of indolence: in September, vaccination rates should be higher, allaying lingering fears of workplace infection; extra unemployment benefits will expire, providing financial incentive for job-hunting; and schools will reopen, freeing many parents to return to the workforce, as some research indicates is already happening. In other words, these are merely “transitory dislocations.” Not to worry.
As President Joe Biden likes to quote his father: “‘A job is a lot more than a paycheck,’ he’d say. ‘Joey, it’s about your respect, your dignity, your place in the community.’” Once the pandemic malaise runs its course, the deep need for meaningful and remunerative activity will, hopefully, reassert itself.
But September is a long way off. Billions, maybe trillions, of self-employed cicadas will have come and gone by then. In the meantime, the Biden administration and Democrats in Congress are anxious to give those disappointing job numbers a jolt.
As such, they have been making the case that a lack of child care services is what’s stalling the economic recovery. Sen. Patty Murray (D-Wash.), who chairs the Health, Education, Labor and Pensions Committee, was quoted in Politico: “If we don’t solve our child care crisis, there isn’t going to be an economic recovery.”
Biden’s “American Families Plan” would give “everyone the opportunity to join the workforce” by providing, among other things, “direct support to families to ensure that low- and middle-income families spend no more than seven percent of their income on child care, and that the child care they access is of high-quality,” reads a statement from the White House.
Proponents estimate that it will cost about $300 billion over 10 years. Critics say that this is a slight underestimate. A more realistic projection, according to an analysis from the Wharton School of Business’ nonpartisan Penn Wharton Budget Model, pegs it at more like $1.2 trillion. (Taking into account investments in education — fully funding two years of universal pre-K and two years of free community college for whoever wants it — also part of the AFP.)
Whatever the actual cost, there has been some discussion about whether child care support will actually have such a noticeable impact on the employment landscape. Researchers at the University of Maryland contend that parents of young children who are unable to work from home are a small percentage of the national labor pool, and that expanding child care will not appreciably change the employment picture.
On other hand, a recent survey published by the Federal Reserve found that more than a fifth of all U.S. parents were out of work or under-employed in 2020, owing to unavailability of child care in the midst of school closures.
And if statistics don’t convince you, maybe the anecdotal evidence will: “A conversation with any working mom will tell you that they are past the point of exhaustion and the status quo is not sustainable,” said Rep. Jackie Speier (D-Calif.), co-chair of the Democratic Women’s Caucus.
In our own communities, we know from experience and direct observation that more affordable child care would be a huge help. You don’t need sophisticated mathematical models to ascertain that for low-wage earners, if they have to give up most of their income to pay for child care, it doesn’t pay for them to go to work.
President Biden’s childcare proposal may be underpriced and oversold as a blockbuster remedy to post-pandemic unemployment, but there is no doubt that the measure should be adopted in some form for the real — if more modest — benefits it would bring.