More Government Contributed to Child Care Costs Skyrocketing ― Now Warren Wants Universal Child Care

Scott Eisen/Getty Images

Sen. Elizabeth Warren (D-Mass.) announced a major part of her 2020 presidential platform Tuesday morning: universal high-quality child care and early education.

Warren took to Twitter to make the announcement, posting a video where she explains the policy, and unlike some of her 2020 competitors, she even explained how she would pay for it.

Watch the video below:

“Today, millions of parents are squeezed by child care costs. Rising costs hold back parents, and they hold back a generation of our kids from the strong foundation they need to succeed in life. That’s why I’m proposing a big, structural change: universal high-quality child care and early education for our littlest ones available to every parent who wants it.”

Warren compared it to the Head Start program, stating that local leaders would organize the program under the supervision of federal regulators. Low-income families would receive free child care, and all other families would have the cost capped at 7 percent of their income.

All early childhood providers would have to have the same degrees as public school teachers, and they would be paid the same salaries and benefits. Warren claimed that families unburdened by child care will have more freedom and income to spend that could result in a stronger economy.

Warren explained that this program would be paid for by a wealth tax she proposed earlier in her campaign. The “Ultra-Millionaire Tax,” as Warren has dubbed it, would take money from families that have over $50 million in total wealth. This doesn’t mean that they earn $50 million per year. Rather, it refers to total assets — including real estate, savings, and other investments — that totals $50 million.

According to a report from the National Academies of Science, Engineering, and Medicine, universal child care and education would cost around $140 billion per year. Although Warren painted this as an expansion of existing programs like Head Start, those current programs only cost $29 billion per year, including both federal and state funding.

How did child care get so expensive?

Child care is very expensive in the United States, and the costs aren’t going down. According to the advocacy group Child Care Aware of America, the average cost of child care for American families is $8,700 per year — meaning single parents pay around 36 percent of their income on child care. For married families, that approximates to 10 percent of the household income, according to NBC News.

See how much child care costs in your state, according to the Economic Policy Institute:

Warren is right that families are burdened by child care costs, but she left out a major part of the story: Government regulations are largely responsible for the high costs.

According to George Mason University’s Mercatus Center, a center-right think tank, government regulations have increased the cost of child care and disproportionately harmed low-income families.

One of the main cost drivers for child care is the child-to-staff ratio. Many states regulated how many children can be cared for by one provider. Childcare.gov has proposed the following regulations:

Screenshot/Childcare.gov

These regulations vary in different states and cities, but limiting the ratio of staff-to-children creates a strain on the supply of child care providers. Because demand is relatively steady, the decreased supply results in increased costs.

Following the laws of supply and demand, there are two solutions to this: drop the regulation on the number of children each provider can care for or incentivize more people to become caretakers.

Instead of incentivizing caretakers, many local governments have done the opposite through stringent regulation. Education and licensing requirements, like the one included in Warren’s proposal, exclude caretakers who do not want to pay for an expensive four-year degree. Regulations on the building standards prevent some from opening day care centers in their home. Even nutrition regulations can be a barrier to entry.

At least the high regulations result in better results for the child, right?

Wrong.

According to the Cato Institute, a libertarian think tank, evidence that degree requirements for caretakers as proposed by Warren is “ambiguous” at best. A Mercatus study found that even requiring a high school diploma can result in a cost elevation between 25 and 46 percent.

A report from the American Economic Association also notes that a nationwide education requirement would be especially burdensome in low-income areas where higher education rates are much lower. As the Cato Institute put it, “the real trade-off is not quality versus cost, but better quality for those rich enough to still be able to use formal care versus less accessibility to care and higher prices for the poor.”

Additionally, a study from the Brookings Institute, a left-leaning think tank, found that early childhood education from ages 3 to 4 didn’t result in an increased academic ability down the road, thwarting Warren’s claim that universal early childhood education is needed for a “strong foundation.”

Obviously, some regulations are required to ensure the safety of the children, but the child care industry in the United States would be better served by less government regulation, not more.

Please note: This is a commentary piece. The views and opinions expressed within it are those of the author only and do not necessarily reflect the editorial opinion of IJR.

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James
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Yes siree! GOVERNMENT will take care of all our needs womb to tomb. Only; NO ONE has figured out WHO is going to pay for all the free stuff the Socialists say we are entitled to.

Chief Spreading Bull still shoveling the bovine excrement.

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