Letter to the Editor: Hillary Clinton’s Plan to Help Families
Hillary Clinton is right that American parents are under strain. But her essay confuses making child care more affordable with changing who pays for it.
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Tax credits, cash transfers and larger subsidies can reduce some families’ out-of-pocket bills. They do not, by themselves, make child care cheaper to provide.
In fact, in a sector constrained by rigid staffing ratios, credential mandates and facility rules, more demand-side subsidies are likely to push market prices higher. The result is often fewer informal options for parents and a larger bill for taxpayers.
A better affordability agenda would make it easier to supply care to begin with. States could relax one-size-fits-all staff-to-child ratios and caps on group size, which evidence suggests can materially lower prices by increasing supply in poorer areas.
They could also repeal credential mandates for child care workers and allow home-based care by right, rather than forcing providers through zoning and permitting barriers. Washington could also expand the caregiver work force by liberalizing the au pair program and other visa routes.
In such a labor-intensive industry without automation, rising prices are perhaps unsurprising. But shifting that burden from the child care bill to the tax bill doesn’t solve the affordability problem. It just displaces it.
Source: https://www.cato.org/commentary/letter-editor-hillary-clintons-plan-help-families
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