The financials of childcare don't really make sense to me. YMMV depending on your situation, but childcare costs are basically equivalent to my wife's teacher salary. And because of our tax bracket, it'd actually be CHEAPER for her to quit her job and take care of 2 kids full time, vs getting paid teach like 20 kids. There's tradeoffs in terms of career progression, but it seems broken that there's a decent financial argument for leaving the workforce.
That either means that childcare is too expensive or teachers don't get paid enough (probably both tbh)
I feel like a lot of folks don't actually do this math, and don't realize that they're essentially just working to pay someone else to watch their kid.
Childcare is expensive because it's an industry captured by PE and in usual fashion they've increased costs while decreasing quality.
The caretaker watching your kid and the 20 other kids certainly isn't making the $20/hr they are charging to watch your kid. Even though they are doing all the work. Even their managers aren't typically making much money. It's the owner of the facilities that's vacuuming up the profits. And because the only other competition is the weirdo lady storing kids in the cellar, it's a lucrative business.
My wife did childcare. It's a major racket. Filled with over worked and underpaid employees and grift at every level. But hey, the owner was able to talk about how hard it was for them and how they actually got a really good deal on their porche (not joking) which is why nobody got raises.
It's a low skill job with a lot of young people that like the idea of playing with kids/babies around.
Seriously. There’s a reason all our kids’ preschool teachers never return from maternity leave. The pay isn’t enough to pay someone else to watch your baby while you work. And this school is already an expensive one and is a nonprofit so the money isn’t going to some Mr. Moneybags investor. The economics of childcare are broken.
The financials of leaving the workforce rarely make sense to me.
> There's tradeoffs in terms of career progression
There's X years of lost income, lost retirement savings, lost raises and bonuses ( depending on career ), lost promotions, lost acquisition of new skills which will keep the stay-home parent up to date with the modern workforce once they leave.
Teaching and nursing are still women dominated and famously supportive of women going back to work or starting work after staying home with the kids. For every other career path, good luck. How many people here would hire someone who'd be out of the workforce for 5, 10, 15 years without a second thought?
This analysis is incomplete for a couple of reasons:
1. any universal childcare scheme will involve groups larger than the median at-home familial group. Avery is watching ~1-2 kids, but if those kids are at creche, they are in a group of (say) ~4-5.
2. In much of the country, a) is financially out of reach for many couples due to cost of living generally being based around two-income households.
> The same total work gets done by the same group of people in both cases, but the second measures as "better" for "the economy".
It's worse than that, because it's not the same work. In Scenario B the person watching the kids isn't their parent so they don't have the same bond or interest in the child's long-term success. It also introduces a lot of additional inefficiencies because now you have trust and vetting issues, either the child or the person watching the child has to commute every day so that they're in the same place because they no longer live in the same house as each other, etc.
My SO spent a few months collecting the neighbour's daughter along with our own from kindergarten and in exchange the neighbour would make dinner for us. This arrangement started because the neighbours' shifts didn't align with kindergarten hours.
At some point it struck me that this is all labour, but there was no money exchanged for the services rendered and certainly no taxes collected. Even worse - without this our neighbours would have to take an inordinate amount of time off, as getting a babysitter was too expensive.
> At some point it struck me that this is all labour, but there was no money exchanged for the services rendered and certainly no taxes collected. Even worse - without this our neighbours would have to take an inordinate amount of time off, as getting a babysitter was too expensive.
How is this bad?
Both your and their family benefited directly in terms of trading responsibilities and indirectly in building relationships between daughters and neighbors.
It’s not measured in GDP but it is measured. For example right now it’s estimated that household production is around 23% of GDP. So quite sizable.
Part of the reason it’s not included in GDP is just that it’s not reliable to measure precisely so it’s not as valuable as a statistic for making monetary and fiscal policy decisions.
I have a suspicion a lot of the “why did wages stop keeping pace with the growth of the economy?” problem is because real productivity hasn’t been growing nearly as fast as our measures of it. But the measures are tied to ways for capitalists to extract more money, so that fake-growth does make line go up for owners. But there’s not nearly as much more actual work getting done as one might think from the numbers.
I mean what, 10ish% of our entire GDP in the US, and IIRC that’s generously low, is being throwing in a fire from excessive spending on healthcare for effectively no actual benefit, versus peer states. And that’s just one fake-productivity issue (though one that affects the US more than most). But our GDP would drop if we fixed that!
It's inflation IMO. Wages started stagnating in the 70s which is exactly when the USD became completely unbacked (due to the end of Bretton Woods), enabling the government to go endlessly deep into debt, which we proceeded to do with gusto, sending inflation skyrocketing.
Somebody who's earning 20% more today than they were 5 years ago would probably think they're on, at least, a reasonable career trajectory. In reality they would be earning less in real terms than they were 5 years ago, thanks to inflation.
In times of low or no inflation it's impossible for this happen. But with inflation it becomes very difficult for workers to really appreciate how much they're earning, and it enables employers to even cut wages while their employees smile about receiving a 2% 'pay raise' when they should be raging about the pay cut they just took.
It's not just about the economy, it is about freedom of choice. What does Max and Avery feel about their careers? Would they rather be working or watching kids? If one parent has to stay home, that might mean having to give up a good career.
No one should be forced to choose between a career and kids, unless the goal is falling birthrates.
In Scenario B the government gets to collect more tax revenues, and also has additional levers to influence certain behaviour (the government will tax you, but give you a tax break if you do Y). Also, the government can make your labor worth less by printing money and increasing inflation.
Child rearing is the most economically important task a mother can do, it's just not compensated for fairly. The wrong thing to do is ensure the parents are working for low wages + have children raised by low wage workers.
“Oh, certainly, you could produce quantities of infants — although it would take enormous resources to do so. Highly trained techs, as well as equipment and supplies. But don’t you see, that’s just the beginning. It’s nothing, compared to what it takes to raise a child. Why, on Athos it absorbs most of the planet’s economic resources. Food, of course — housing — education, clothing, medical care — it takes nearly all our efforts just to maintain population replacement, let alone to increase. No government could possibly afford to raise such a specialized, nonproductive army.”
Elli Quinn quirked an eyebrow. “How odd. On other worlds, people seem to come in floods, and they’re not necessarily impoverished, either.”
Ethan, diverted, said, “Really? I don’t see how that can be. Why, the labor costs alone of bringing a child to maturity are astronomical. There must be something wrong with your accounting.”
Her eyes screwed up in an expression of sudden ironic insight. “Ah, but on other worlds the labor costs aren’t added in. They’re counted as free.”
Ethan stared. “What an absurd bit of double thinking! Athosians would never sit still for such a hidden labor tax! Don’t the primary nurturers even get social duty credits?”
“I believe” — her voice was edged with a peculiar dryness — “they call it women’s work. And the supply usually exceeds the demand — non-union scabs, as it were, undercutting the market.”
Right, and that's exactly the point. It was extended family and close community, not institutional strangers. Grandma watching the kids while mom works the fields is completely different from dropping an infant at a commercial daycare center with a 1:6 caregiver ratio. The "it takes a village" argument doesn't support modern daycare, it actually undermines it. Those historical models were built on trusted relationships and continuity of care, not economic transactions with rotating staff.
We've strayed pretty far from the original topic here, but the reality is that the US military is literally running out of working aircraft because they're so old. The average age of USAF aircraft is now about 28 years. The fleet was allowed to decay and not substantially recapitalized during the GWOT. Many of the fighters in the combat coded inventory aren't even allowed to hit their original 9G maneuvering limit any more due to accumulated airframe fatigue. Now we're paying an overdue bill.
And let's please not have any uninformed claims that somehow cheap "drones" will magically make large, expensive manned aircraft obsolete. Small, cheap drones are effective in a trench warfare environment like the current conflict in Ukraine but they lack the range, speed, and payload necessary to be useful in a potential major regional conflict with China. And the notion of relying on AI for any sort of complex mission in a dynamic environment remains firmly in the realm of science fiction: maybe that will be feasible in a few decades but for now any really complex missions still rely on humans in the loop to execute effectively.
Main battle tanks are probably less useful in the future of armed conflict due to the effectiveness of drones.
Spending on childcare means we need to offset those debts with other revenues.
We have close to full employment, so I'd argue that freeing up labor isn't as strategic as other categories of spending.
It all depends on what you want to prioritize. For the long term health of the nation, these areas seem key for continued economic resiliency:
- pay down the debt so it doesn't spiral out of control (lots of strategies here, some good, some bad: higher taxes, lower spending, wanton imperialism, inflation, etc.)
- remain competitive in key industries, including some catch-up: robotics, batteries, solar, chip manufacture
- if we're going for a multipolar world / self-sufficiency play, we need to rebuild the supply chain by onshoring and friendshoring. This means the boring stuff too, like plastics and pharmaceutical inputs.
I'd argue that that's the wrong goal. Ideally, families can afford to live off of one salary so that mothers could choose to continue to care for their children if they wanted to do so.
Currently, very few families are privileged enough to live off of one salary. Both parents need to work in order to make ends meet.
I'm not saying it's an easy problem to solve, or that free childcare isn't a good interim solution. But important to keep the end goal in mind.
Yeah, that's why I said it wasn't an easy problem to solve. No need to let the infeasibility of a perfect solution get in the way of a possible, yet however unideal solution.
I mean, a lack of cheap housing is also a policy failure.
Also, there's already massive interference with the economy, all the time, every day. It's just hard to see, and the working class doesn't benefit from it. Housing isn't just magically expensive by some law of nature.
Sure it goes to everyone, but I think that's okay. Some parents would still choose to both work, and use their monthly check to pay for daycare. I think the important thing is freedom to choose.
If the tax man can't see it, it doesn't exist.
.
Scenario A: Max and Alex are a couple and have kids. Max stays home with them, and Alex has a job with a coworker named Avery.
Scenario B: Max and Alex are a couple and have kids. They both work, and hire Avery to watch the kids.
The same total work gets done by the same group of people in both cases, but the second measures as "better" for "the economy".
The financials of childcare don't really make sense to me. YMMV depending on your situation, but childcare costs are basically equivalent to my wife's teacher salary. And because of our tax bracket, it'd actually be CHEAPER for her to quit her job and take care of 2 kids full time, vs getting paid teach like 20 kids. There's tradeoffs in terms of career progression, but it seems broken that there's a decent financial argument for leaving the workforce.
That either means that childcare is too expensive or teachers don't get paid enough (probably both tbh)
I feel like a lot of folks don't actually do this math, and don't realize that they're essentially just working to pay someone else to watch their kid.
8 replies →
Behold the glory of private equity.
Childcare is expensive because it's an industry captured by PE and in usual fashion they've increased costs while decreasing quality.
The caretaker watching your kid and the 20 other kids certainly isn't making the $20/hr they are charging to watch your kid. Even though they are doing all the work. Even their managers aren't typically making much money. It's the owner of the facilities that's vacuuming up the profits. And because the only other competition is the weirdo lady storing kids in the cellar, it's a lucrative business.
My wife did childcare. It's a major racket. Filled with over worked and underpaid employees and grift at every level. But hey, the owner was able to talk about how hard it was for them and how they actually got a really good deal on their porche (not joking) which is why nobody got raises.
It's a low skill job with a lot of young people that like the idea of playing with kids/babies around.
My kids were young 25 years ago but the same was true for us then.
Seriously. There’s a reason all our kids’ preschool teachers never return from maternity leave. The pay isn’t enough to pay someone else to watch your baby while you work. And this school is already an expensive one and is a nonprofit so the money isn’t going to some Mr. Moneybags investor. The economics of childcare are broken.
1 reply →
The financials of leaving the workforce rarely make sense to me.
> There's tradeoffs in terms of career progression
There's X years of lost income, lost retirement savings, lost raises and bonuses ( depending on career ), lost promotions, lost acquisition of new skills which will keep the stay-home parent up to date with the modern workforce once they leave.
Teaching and nursing are still women dominated and famously supportive of women going back to work or starting work after staying home with the kids. For every other career path, good luck. How many people here would hire someone who'd be out of the workforce for 5, 10, 15 years without a second thought?
This analysis is incomplete for a couple of reasons:
1. any universal childcare scheme will involve groups larger than the median at-home familial group. Avery is watching ~1-2 kids, but if those kids are at creche, they are in a group of (say) ~4-5.
2. In much of the country, a) is financially out of reach for many couples due to cost of living generally being based around two-income households.
4.5? At a US daycare those kids will be in a group of 20-40, with one or two adults supervising.
5 replies →
> The same total work gets done by the same group of people in both cases, but the second measures as "better" for "the economy".
It's worse than that, because it's not the same work. In Scenario B the person watching the kids isn't their parent so they don't have the same bond or interest in the child's long-term success. It also introduces a lot of additional inefficiencies because now you have trust and vetting issues, either the child or the person watching the child has to commute every day so that they're in the same place because they no longer live in the same house as each other, etc.
My SO spent a few months collecting the neighbour's daughter along with our own from kindergarten and in exchange the neighbour would make dinner for us. This arrangement started because the neighbours' shifts didn't align with kindergarten hours.
At some point it struck me that this is all labour, but there was no money exchanged for the services rendered and certainly no taxes collected. Even worse - without this our neighbours would have to take an inordinate amount of time off, as getting a babysitter was too expensive.
> At some point it struck me that this is all labour, but there was no money exchanged for the services rendered and certainly no taxes collected. Even worse - without this our neighbours would have to take an inordinate amount of time off, as getting a babysitter was too expensive.
How is this bad?
Both your and their family benefited directly in terms of trading responsibilities and indirectly in building relationships between daughters and neighbors.
Is your concern that neither of you paid taxes?
2 replies →
It’s not measured in GDP but it is measured. For example right now it’s estimated that household production is around 23% of GDP. So quite sizable.
Part of the reason it’s not included in GDP is just that it’s not reliable to measure precisely so it’s not as valuable as a statistic for making monetary and fiscal policy decisions.
I have a suspicion a lot of the “why did wages stop keeping pace with the growth of the economy?” problem is because real productivity hasn’t been growing nearly as fast as our measures of it. But the measures are tied to ways for capitalists to extract more money, so that fake-growth does make line go up for owners. But there’s not nearly as much more actual work getting done as one might think from the numbers.
I mean what, 10ish% of our entire GDP in the US, and IIRC that’s generously low, is being throwing in a fire from excessive spending on healthcare for effectively no actual benefit, versus peer states. And that’s just one fake-productivity issue (though one that affects the US more than most). But our GDP would drop if we fixed that!
It's inflation IMO. Wages started stagnating in the 70s which is exactly when the USD became completely unbacked (due to the end of Bretton Woods), enabling the government to go endlessly deep into debt, which we proceeded to do with gusto, sending inflation skyrocketing.
Somebody who's earning 20% more today than they were 5 years ago would probably think they're on, at least, a reasonable career trajectory. In reality they would be earning less in real terms than they were 5 years ago, thanks to inflation.
In times of low or no inflation it's impossible for this happen. But with inflation it becomes very difficult for workers to really appreciate how much they're earning, and it enables employers to even cut wages while their employees smile about receiving a 2% 'pay raise' when they should be raging about the pay cut they just took.
But what if Avery has the skills and training to watch 5 kids at once in a group?
How do you "skill" yourself more attention to give?
What age?
0-18 months, there is no skill other than being the parent(s).
They are very different.
In scenario A, the labor of watching the kids is untaxed.
In Scenario B is Avery watches many kids and the effort per kid is reduced, but you get taxed.
Interesting game engine:
1. Each sim gets a minimum wage of $childcare dollars
2. Each sim gets a maximum wage of $childcare dollars
It's not just about the economy, it is about freedom of choice. What does Max and Avery feel about their careers? Would they rather be working or watching kids? If one parent has to stay home, that might mean having to give up a good career.
No one should be forced to choose between a career and kids, unless the goal is falling birthrates.
In Scenario B the government gets to collect more tax revenues, and also has additional levers to influence certain behaviour (the government will tax you, but give you a tax break if you do Y). Also, the government can make your labor worth less by printing money and increasing inflation.
Child rearing is the most economically important task a mother can do, it's just not compensated for fairly. The wrong thing to do is ensure the parents are working for low wages + have children raised by low wage workers.
It reminds me of Bujold.
“Oh, certainly, you could produce quantities of infants — although it would take enormous resources to do so. Highly trained techs, as well as equipment and supplies. But don’t you see, that’s just the beginning. It’s nothing, compared to what it takes to raise a child. Why, on Athos it absorbs most of the planet’s economic resources. Food, of course — housing — education, clothing, medical care — it takes nearly all our efforts just to maintain population replacement, let alone to increase. No government could possibly afford to raise such a specialized, nonproductive army.”
Elli Quinn quirked an eyebrow. “How odd. On other worlds, people seem to come in floods, and they’re not necessarily impoverished, either.”
Ethan, diverted, said, “Really? I don’t see how that can be. Why, the labor costs alone of bringing a child to maturity are astronomical. There must be something wrong with your accounting.”
Her eyes screwed up in an expression of sudden ironic insight. “Ah, but on other worlds the labor costs aren’t added in. They’re counted as free.”
Ethan stared. “What an absurd bit of double thinking! Athosians would never sit still for such a hidden labor tax! Don’t the primary nurturers even get social duty credits?”
“I believe” — her voice was edged with a peculiar dryness — “they call it women’s work. And the supply usually exceeds the demand — non-union scabs, as it were, undercutting the market.”
> Child rearing is the most economically important task a mother can do
This is really only true in the post-WWII Western nuclear family. Most cultures historically and today have group elements to childbearing.
Right, and that's exactly the point. It was extended family and close community, not institutional strangers. Grandma watching the kids while mom works the fields is completely different from dropping an infant at a commercial daycare center with a 1:6 caregiver ratio. The "it takes a village" argument doesn't support modern daycare, it actually undermines it. Those historical models were built on trusted relationships and continuity of care, not economic transactions with rotating staff.
They would need to be building tanks and airplanes.
Why?
We don’t need tanks and planes. We have plenty.
We've strayed pretty far from the original topic here, but the reality is that the US military is literally running out of working aircraft because they're so old. The average age of USAF aircraft is now about 28 years. The fleet was allowed to decay and not substantially recapitalized during the GWOT. Many of the fighters in the combat coded inventory aren't even allowed to hit their original 9G maneuvering limit any more due to accumulated airframe fatigue. Now we're paying an overdue bill.
And let's please not have any uninformed claims that somehow cheap "drones" will magically make large, expensive manned aircraft obsolete. Small, cheap drones are effective in a trench warfare environment like the current conflict in Ukraine but they lack the range, speed, and payload necessary to be useful in a potential major regional conflict with China. And the notion of relying on AI for any sort of complex mission in a dynamic environment remains firmly in the realm of science fiction: maybe that will be feasible in a few decades but for now any really complex missions still rely on humans in the loop to execute effectively.
7 replies →
Main battle tanks are probably less useful in the future of armed conflict due to the effectiveness of drones.
Spending on childcare means we need to offset those debts with other revenues.
We have close to full employment, so I'd argue that freeing up labor isn't as strategic as other categories of spending.
It all depends on what you want to prioritize. For the long term health of the nation, these areas seem key for continued economic resiliency:
- pay down the debt so it doesn't spiral out of control (lots of strategies here, some good, some bad: higher taxes, lower spending, wanton imperialism, inflation, etc.)
- remain competitive in key industries, including some catch-up: robotics, batteries, solar, chip manufacture
- if we're going for a multipolar world / self-sufficiency play, we need to rebuild the supply chain by onshoring and friendshoring. This means the boring stuff too, like plastics and pharmaceutical inputs.
- lots of energy expansion and infrastructure
7 replies →
Everyone should learn how to build drones.
I'd argue that that's the wrong goal. Ideally, families can afford to live off of one salary so that mothers could choose to continue to care for their children if they wanted to do so.
Currently, very few families are privileged enough to live off of one salary. Both parents need to work in order to make ends meet.
I'm not saying it's an easy problem to solve, or that free childcare isn't a good interim solution. But important to keep the end goal in mind.
The government can set up free child care as it has already set up other similar programs.
How would the government make it so that a single salary can provide for a family? Wouldn't this require massive interference with the economy?
Yeah, that's why I said it wasn't an easy problem to solve. No need to let the infeasibility of a perfect solution get in the way of a possible, yet however unideal solution.
I mean, a lack of cheap housing is also a policy failure.
Also, there's already massive interference with the economy, all the time, every day. It's just hard to see, and the working class doesn't benefit from it. Housing isn't just magically expensive by some law of nature.
Raising children is basically a full time job. Why not compensate it as such?
I'd be on board with that. That was Andrew Yangs whole proposition with UBI. https://2020.yang2020.com/policies/the-freedom-dividend/
Sure it goes to everyone, but I think that's okay. Some parents would still choose to both work, and use their monthly check to pay for daycare. I think the important thing is freedom to choose.
1 reply →