Low pay, child care and the labor shortage

U.S. Sen. Todd Young lamented the current “massive labor shortage” last week in a discussion hosted by the Ellettsville, Indiana, Chamber of Commerce.

“We had 120,000 available jobs in August; we’re up to 150,000 right now,” Young said, according to the Bloomington Herald-Times. “I don’t know where everyone is. What do they do with their time?”

Maybe they’re busy looking for jobs that pay enough for them to live on. Or maybe they’re tried to find jobs like that and concluded they aren’t available.

As Ball State economist Michael Hicks has observed, too many employers think they can still attract workers by paying $10 to $12 an hour. Hicks also notes that millions of Americans have left the workforce during the COVID-19 pandemic, many of them for good reasons.

Young used the worker shortage to criticize vaccine mandates, suggesting workers will leave their jobs rather than get vaccinated. It’s true that some mandate opponents have made a lot of noise, but the evidence suggests most people will get the shot rather than lose their jobs.

IU Health, for example, terminated only 125 of its 36,000 employees for refusing to get vaccinated. That about 0.3%, no more than you’d expect for normal job turnover.

Young rightly pointed to child care as an issue affecting the jobs situation. A series of stories in the Herald-Times shows how families in the Bloomington area struggle to find reliable, affordable and high-quality care, and how the pandemic has made the situation worse. Part of the problem is a shortage of child-care workers.

It’s no mystery why there’s a shortage. “According to the U.S. Bureau of Labor Statistics, the average hourly wage for child care workers in Indiana is $10.96 and the average annual wage is $22,790,” the Herald-Times reports. More than one in five early Indiana childhood educators earn less than a poverty-level wage.

Low wages and child-care issues are a one-two punch for many families. Imagine you’re a parent of two preschool-age children and you need a job. You find a job that pays $12 an hour, but that means you need care for your kids. You get lucky and find a program that has space for both. It charges $200 a week for your infant and $150 for your toddler, cheap by local standards. But that reduces your net pay to $3.25 an hour. Is it worth it?

Young suggested that child-care shortages may be tied to the misperception that early childhood education is just baby-sitting, not a profession. He said more training and certification could draw more workers, improving access for parents. But many programs already require training and certification for teachers; some require two-year or four-year degrees. Under Indiana’s Paths to Quality program, providers at levels 2, 3 and 4 must employ lead teachers with a Child Development Associate certificate.

There’s a fundamental problem: Child care costs too much, and workers are paid too little. Raise pay and costs go up. Cut costs and pay goes down.

We American are uniquely stingy in our support for families and children. According to data from the Organization for Economic Cooperation and Development, developed countries spend an average of $14,000 per child on early childhood education. The United States spends $500.

As a U.S. senator, Todd Young could do something about that.


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