The shock of the Covid pandemic and the ensuing period of unusually high inflation have led to serious labor shortages child care, and elder care in the U.S., intensifying “care stress” for employed family members. The costs of care services have risen much faster than the overall rate of inflation, and even those able to pay have found it difficult to find the services they need. Yet over-confidence in the forces of supply and demand has discouraged attention to the measurement of unmet needs. For instance, plenty of local newspapers run heart-rending stories about closings of family daycare businesses, but no national survey regularly assesses the number of families with small children who are unable to find or afford the child care services that they seek. Regular labor force surveys make it difficult to statistically analyze the economic effects of such shortages.

Both child care and elder care services are characterized by a large informal “gray market” that includes small family day care businesses, informal employment arrangements for elder care, and reliance on undocumented workers. Extended family members, friends, and neighbors often provide unpaid back-up care. However, this unpaid buffer contracts when the unemployment rate is low and more people move into paid employment. Rapid inflation has particularly adverse impacts on paid child care and elder care services, because wages in these occupations are slow to adjust. Businesses serving the low-income population find it difficult to pass on wage increases without pricing many consumers out of the market. Both child care and elder care are heavily subsidized by federal and state programs such as Head Start and Medicaid, whose  budget allocations and reimbursement rates seldom keep pace with inflation. Many public services such as drug rehabilitation programs and domestic violence shelters have been contracted out to non-profit organizations on long-term contracts without inflation adjustments. Many low-wage earners without high levels of education have been sucked out of care services into more rapidly expanding industries such as transportation and warehousing that can offer them significantly higher wages.

 Little accurate data is available regarding the hours that beneficiaries of paid family and sick leave devote to family members in need of care, what it would cost to purchase substitutes for that unpaid time, or the extent to which substitutes are available or affordable. It is also empirically difficult to link inputs of family care to economic outputs (such as improved health and education outcomes) or reduced social costs on the community level (such as lower rates of suicide, drug addiction, alcoholism, and crime). Short-term thinking predominates in public policy debates in part because Congressional Budget Office rules dictate a ten-year time horizon, explicitly excluding consideration of the longer-term payoffs that are typical in care provision.

While more information about “payoffs” to greater public support for care provision is critical, more numbers alone won’t have much impact. The information needs to be conveyed in terms that

make sense to ordinary people, becoming part of a larger story of how we can better ourselves and our families and communities. This larger story must challenge conventional economic thinking, which still defines “the economy” in terms of money and the market. As a result, politicians opposed to an expanded  Child Tax Credit get away with the preposterous claim that it will “discourage work.” What they really mean is that it might allow some families to temporarily reduce their hours of paid employment to care for young children who, after all, are crucial to our future labor force.

Americans have been hoodwinked into thinking that measures of economic growth based on Gross Domestic Product or on stock market indices like the Dow Jones are indicators of our collective success. What matters more for more people are their paychecks and the time they have available to care for themselves, their families and their communities. Both greater public support for family care and greater public provision of care services would improve living standards and increase the productivity of the economy as a whole. A better understanding of the care economy could strengthen the political will to improve it.

These are the issues I emphasized in writing a proposal to the Alfred P. Sloan Foundation for support improving the accuracy and accessibility of care data, and I’m happy to report that it has awarded $2.7 million to the Political Economy Research Institute at the University of Massachusetts Amherst, to support two specific projects: 1) The Committee on National Statistics (CNSTAT) of the National Academy of Science will  convene an interdisciplinary panel of experts to critically examine existing national surveys relevant to care provision and reach a consensus on recommendations for improvement. 2) The Care Board directed by economist Misty Heggeness at the University of Kansas (described in an earlier Care Talk  post) will expand its efforts to present data on the care economy in a user-friendly format that encourages public engagement. As the Principal Investigator for this Sloan grant, I hope to improve communication among researchers, policymakers, activists, care providers, and care recipients. We need to brainstorm creative ways of communicating the importance of the care economy.