Democrats and the Biden administration have attributed the blunted economic recovery, in part, to a lack of child care services for working parents. They have used the problem to push support for President Joe Biden’s American Families Plan, a massive legislative proposal that would cost taxpayers $1.8 trillion.
However, new analysis released by economic experts including Harvard professor Jason Furman, whom Politico described as a “prominent White House ally” and “Biden-friendly economist,” severely undercuts the Democratic narrative.
Jason Furman. (Andrew Harrer/Bloomberg via Getty Images)
After April’s shockingly disappointing job’s report showed the U.S. economy stalled last month — adding only about one-quarter of the 1 million jobs experts predicted — Democrats have called for Congress to act on Biden’s plan, and the White House has said lack of child care access is preventing parents from rejoining the workforce.
Democratic officials have used the jobs report to call on Congress to urgently approve hundreds of billions of dollars in child care aid that Biden has proposed under the American Families Plan, which also includes two free years of universal pre-K. “If we don’t solve our child care crisis, there isn’t going to be an economic recovery,” Sen. Patty Murray (D-Wash.), who chairs the Health, Education, Labor and Pensions Committee, said at a Thursday press conference.
White House press secretary Jen Psaki told reporters earlier this month that passing the Families Plan “would have a huge benefit in addressing some of the impacts of child care, on educational needs … that is preventing women from rejoining the workforce.”
What did Furman discover?
The economic analysis co-authored Furman, who served as chairman of former President Barack Obama’s Council of Economic Advisers, found that child care challenges are not contributing to the stalled economic recovery.
“School closures and lack of child care are not holding back the recovery,” Furman said, Politico reported. “And conversely, we shouldn’t expect a short-term economic bump from reopening schools and making child care more available.”
In fact, the analysis discovered the employment rate for parents with young children decreased at a lower rate than the unemployment rate for people without young children, yet another indicator that child care challenges are not contributing to the stalled jobs recovery.
Instead, the analysis concluded that enhanced unemployment benefits is partly behind the disappointing economic numbers from April.
While school closures and ongoing childcare challenges have substantially burdened parents and children alike, they do not appear to be a meaningful driver of the slow employment recovery. This means that the factors responsible for the slow employment recovery and depressed labor supply are issues that are not exclusively related to the struggles of working parents, such as the continued concern about the threat of getting COVID-19 at work or expanded unemployment insurance benefits and eligibility.
Furman had said previously child care challenges and closed schools were contributing to poor economic recovery numbers.
How did the White House respond?
Jared Bernstein, a member of Biden’s Council of Economic Advisers, essentially dismissed the analysis, saying it “doesn’t obviate our concerns about the child care barrier either in the near-term or the long-term.”
“Many factors remain in play: fear of the virus, barriers to child care, school closures, concerns about the vaccination rates for working-age people,” Bernstein told Politico. “All of these factors are in the mix, and I don’t think you can find one piece of research that says, ‘Aha, here is the main factor or the sole factor.’ These factors are all interacting with each other as we continue making a gradual return back to pre-crisis conditions.”