Millions of parents want to work but can't afford child care. Congress must act.

Our nation needs to bring inflation under control, and that won’t come from pretending that only the Federal Reserve has tools to tackle this problem – or that a recession is the only alternative to inflation.

Already, the Biden administration is taking strong steps, working hard to promote competition, stop corporate profiteering and address supply chain challenges – all of which will help bring prices down. But there’s one more step Congress can take to reduce inflation: Expand access to affordable, high-quality child care. By doing so, we can boost labor supply, which would increase workforce participation, increase the supply of goods and services, and immediately lower costs for struggling families. 

For decades, the United States has under-invested in child care, essentially crossing our fingers and hoping that families with small children will somehow work things out. That wishful thinking has held back our economy, driving millions of women out of the workforce and knocking nearly one percentage point off our annual gross domestic product. 

Unfulfilled jobs hurts supply of goods and services

In a year and a half, President Joe Biden's leadership has helped create more than 8 million jobs. And now, even more businesses are looking to hire. As we return to the activities we enjoyed before the COVID-19 pandemic started, like going to restaurants and traveling, businesses are trying to fill positions from servers and line cooks to barbers and bus drivers.

In fact, we have 5 million more job openings than unemployed people. That’s good news for workers negotiating for pay raises, but unfilled jobs means the supply of goods and services is lower than it otherwise would be – and that pushes up prices.  

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Worker shortage is bad news for our economy. Economists have warned that if service-sector businesses can’t find the workers they need, the impact on inflation could be "devastating." They note that Congress’ failure to invest in affordable child care in the wake of the pandemic could have long-term negative effects on “the rate of growth we can have and the size of our economy.” 

While employers search for workers, millions of parents are sidelined. About 5 million Americans have cited child care as their primary reason for not working. 

Small businesses hurting from parents staying home

Employers have taken note. A recent national survey found that a lack of child care is hurting over half of small businesses.

Millions of parents across the country are ready to work, but they can’t without reliable, affordable child care. Even before the pandemic, more than half of families with young kids lived in “child care deserts,” areas where there simply aren’t enough open slots with licensed child care providers. Then COVID-19 hit, and thousands of child care providers were forced to close their doors – many for good.

Even if families find child care, it’s often too far away, costs more than in-state college tuition or has a years-long waiting list. 

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Child care providers want to meet that need, but they can’t make the math work.

Take Melissa Colagrosso, who runs a child care center in West Virginia and recently testified at a Senate hearing that I chaired. Melissa is like so many providers, doing everything she can for families in her community but operating on razor-thin profit margins, with barely enough revenue to cover basic costs. She explained that she can only pay her workers the rock bottom minimum, less than Sheetz, the convenience store down the street. That means she struggles to retain staff, much less hire new staff.

Colagrosso said she’d love to raise wages and knows her staff deserve more, but she can’t increase her fees because families can barely afford the current rate. She has a long waiting list of parents hoping for child care, but without enough workers, her child care center – and so many others – can’t take in more kids, and this translates to fewer working parents.

Make billionaire corporations pay their fair share

Giant corporations like Amazon can afford to open day care centers for their office workers, but this option is out of reach for most businesses and most workers. That’s why federal investments are so critical – and the good news is we can fund them by making Amazon and other giant corporations pay their fair share in taxes.

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Right now, many of the largest companies are reporting high profits, but using loopholes to pay little to nothing in taxes. In fact, 19 Fortune 100 companies – including Amazon, Exxon and AT&T – reported billions of dollars in profits last year and paid next to nothing, or nothing at all, in taxes, which gives them an advantage over every small business in America that actually paid to help keep this country going.

With my plan for a 15% minimum tax on billionaire corporations, plus closing loopholes that reward multinationals for offshoring jobs and profits, we can fully pay – 100% – for investments in child care that will help families and employers.  

Federal investments in child care would make it possible for millions of caregivers – women in particular – to go to work, boosting our economy and helping fight inflation. According to two former Treasury secretaries, this type of legislation would “make child care affordable” and “on net, tamp down inflationary pressure.”

Investing in quality, affordable child care will help working families and small businesses. It will unlock jobs for millions of Americans, support economic growth and fight inflation – both in the short term and long term. It’s win-win-win, and it’s past time we get it done. 

Elizabeth Warren represents Massachusetts in the U.S. Senate. Follower her on Twitter: @SenWarren