Childcare has become unsustainable burden on families

Philly Fed Chief Patrick Harker provides update to business community April 6
April 14, 2022

According to Patrick Harker, president and CEO of the Federal Reserve Bank of Philadelphia, the cost of childcare before the COVID-19 pandemic was already forcing some women to leave the workforce to care for their families. Two years later, he said, an additional 2.3 million women have left the workforce because they took on the brunt of the family responsibilities.

The cost of childcare was already a problem, but the pandemic accelerated the issue, Harker said during an online discussion April 6 hosted by the Delaware State Chamber of Commerce. Describing childcare as an unsustainable burden, Harker said 20 percent of the median household income is spent on one child attending childcare.

The workforce participation rate for women sits slightly above 58 percent, but before the pandemic, the rate for women was a little over 59 percent. At the height of the pandemic, he said, the participation rate dropped to just above 56 percent.

One of the biggest problems is availability. For children under the age of 5, Harker said, childcare providers across the state are licensed to serve roughly 35,000 children. There are nearly 55,000 children in Delaware under the age of 5, he said.

Twenty-five percent of the state is what Harker described as a childcare desert, much of which is in the southern part. It’s not just the availability of childcare that’s a problem, he said; employers are also having trouble finding employees. Workers are going elsewhere in a tight labor market, which means providers have to turn away families and limit hours, he said.

It’s a real problem that's only going to be solved with a public/private partnership, said Harker, who began his second five-year term as federal bank president in March 2021 and is a former University of Delaware president.

In other areas of concern: The housing market was generally healthy, but not keeping up with demand, Harker said. In many places, he said, people cannot afford to live where the jobs are.

He doesn’t see inflated fuel prices going away anytime soon. Until the supply chain straightens out, this is going to be with us for a while, he said.

Inflation is running far too high, but it could encourage some people to return to the workforce, he said.

In 2021, U.S. GDP growth was 5.7 percent, and for 11 straight months, new job creation has topped 400,000, he said.

“That this occurred in the midst of a deadly pandemic is quite a testament to the underlying strength of our economy,” he said.

On a positive note, Harker said, there are good-paying jobs available that don’t require a four-year degree. There are a lot of opportunities out there, he said, pointing to the Philadelphia Federal Reserve Bank’s Occupational Mobility Explorer as a tool that can be used to find those opportunities.


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