Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 2: I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 1: Tracy, you know, we've spent the last I guess it's
Speaker 1: like three years now, maybe even a little. Actually it's
Speaker 1: been longer than three.
Speaker 2: Years now, feels like a long time talking.
Speaker 1: About many aspects of the sort of physical manufactured economy
Speaker 1: that broke or are broken in some way.
Speaker 3: Yeah, And I think it's because, I mean, obviously, the
Speaker 3: pandemic exposed a lot of these fault lines with global
Speaker 3: supply chains for physical goods, primarily consumer goods, things like
Speaker 3: furniture and food and stuff like that. But on the
Speaker 3: other hand, there was also a lot of disruption to services,
Speaker 3: and we haven't really spoken as much about that, right.
Speaker 1: And the other thing that's really striking with services, So
Speaker 1: actually right now we're in this period where like, for
Speaker 1: the fact, there's a lot of focus on services inflation
Speaker 1: and when is that going to come down, et cetera.
Speaker 1: The other thing with a lot of services, particularly like
Speaker 1: very crucial services, is that to the extent that we
Speaker 1: talk about certain industries being broken or market failures, which
Speaker 1: I think was like a sort of like recurrent theme
Speaker 1: of our work. Many of the was sort of broken,
Speaker 1: it seems in the services space, it just existed long before.
Speaker 1: Like these these problems were actually very evident even prior.
Speaker 2: To COVID no totally.
Speaker 3: There was actually a chart I was looking at just
Speaker 3: last week that showed the long term inflation trends in
Speaker 3: the US broken into sort of components, and if you
Speaker 3: look at it, the highest price increases are all in services,
Speaker 3: so things like healthcare, childcare, while all the consumer goods,
Speaker 3: the durable stuff, has been going down. So it's much
Speaker 3: cheaper to buy a big screen TV than previously, but
Speaker 3: it's much more expensive to have a kid and send
Speaker 3: them to college and things like that.
Speaker 2: Right, and so these are like these sort of like
Speaker 2: deeper things.
Speaker 1: And so we're thinking about, like, okay, what are the bottlenecks,
Speaker 1: what are the you know, the so called market failures,
Speaker 1: et cetera that cause this, And we look at it
Speaker 1: in the manufactured world, but buy and large you know,
Speaker 1: TVs and refrigerators and air conditioning and cars, and they
Speaker 1: get better and better, it seems like over time, and
Speaker 1: buy and large they do get cheaper, even with the
Speaker 1: recent disruptions. But why are the parts of this economy
Speaker 1: that I think everyone considers to be crucial and sort
Speaker 1: of things related to childcare, care work, elder care, which
Speaker 1: is going to become a bigger and bigger crisis or
Speaker 1: issue for the economy, is the baby boomer generation. Ages.
Speaker 1: These have been broken for people for a long time,
Speaker 1: and there's no like end insight, there's no like, oh,
Speaker 1: it's going to finally normalize because the pre COVID trend
Speaker 1: was so bad.
Speaker 3: Yeah, are we pivoting from goods to services? Is that
Speaker 3: what's happening?
Speaker 1: I think we are doing a little pivot. All right, well,
Speaker 1: let us uh but yeah, we need to talk about
Speaker 1: this more. And so I'm very excited about our guest today.
Speaker 1: We're going to be speaking with Nancy Fulbrace. She is
Speaker 1: a Professor Emerit of Economics at UMAs Amhers and director
Speaker 1: of the Program on Gender and Care Work at the
Speaker 1: Political Economy Research Institute. Professor Fulbray, thank you so much
Speaker 1: for coming on odd lots.
Speaker 4: Thank you. I'm really looking forward to it.
Speaker 1: So let's just start with like the premise of this conversation,
Speaker 1: because I know we discussed it as this is a
Speaker 1: care work and that encompasses multiple things. It feels like
Speaker 1: an area that's been broken into some sense for long
Speaker 1: before the pandemic. But I'm curious, like a do you
Speaker 1: accept that premise that broken is a good way to
Speaker 1: think about it, And how would you characterize the sort
Speaker 1: of you know, is what have we seen for years
Speaker 1: in this sector that feels wrong to people?
Speaker 4: You know, I kind of agree with the broken word,
Speaker 4: but I think that analyzing it completely in terms of markets,
Speaker 4: even in terms of market failure, is a little bit misleading,
Speaker 4: because what's really interesting about care provision is it involves
Speaker 4: a lot of paid work, but also a lot of
Speaker 4: unpaid work, and also a lot of government provision. And
Speaker 4: it's the way that all of those sources of provisioning interact.
Speaker 4: I think that give it some very particular characteristics and
Speaker 4: in addition to the kind of characteristics of services in
Speaker 4: general that make it different from manufacturing.
Speaker 3: Well, on that note, maybe talk to us about the
Speaker 3: landscape of childcare in the US and what it looks
Speaker 3: like now, because my impression is, you know, there is
Speaker 3: some government support, some families get subsidies, but for the
Speaker 3: most part, you're talking about a sort of network of
Speaker 3: primarily very small, independent childcare centers and or people who
Speaker 3: are doing this work, you know, for free for their families.
Speaker 3: If you have a family member who's maybe looking after
Speaker 3: your kid or a friend's kid or whatever, So talk
Speaker 3: to us about what it looks like currently well.
Speaker 4: Rang out, it's pretty clear that people are having a
Speaker 4: hard time finding the childcare that they need outside of
Speaker 4: the home, and also that it's become increasingly expensive to
Speaker 4: do it. And it's clearly making life difficult for a
Speaker 4: lot of families and having some adverse effects on children
Speaker 4: as well. I think it's particularly consequential for women, who
Speaker 4: are often more constrained by childcare responsibilities than men are.
Speaker 4: You know, part of this has to do with just
Speaker 4: the nature of services that are different than it's different
Speaker 4: than a producing a good, a physical good. It's long
Speaker 4: been noted that services are not as susceptible to technical change.
Speaker 4: The very nature of care means you've got to have
Speaker 4: some face to face, hands on interaction. Maybe technology is
Speaker 4: going to improve the quality or change the nature of it,
Speaker 4: but it's basically a pretty labor intensive and emotionally intensive
Speaker 4: kind of provision. It's one that people really value, that's
Speaker 4: really important in terms of their quality of life and
Speaker 4: child outcome. But it's not easy to put it together
Speaker 4: with a world in which most families have to need
Speaker 4: to income earners, so they need some help with childcare
Speaker 4: outside the home. Another thing I think it's worth mentioning
Speaker 4: is that it used to be that parents could rely
Speaker 4: on a pretty large network of neighbors and ken to
Speaker 4: help them out with childcare. That's much less true than
Speaker 4: it used to be. College educated workers in particular are
Speaker 4: pretty unlikely now to live in the same area as
Speaker 4: their parents. A lot of job requirements mean that people
Speaker 4: have to be willing to move, so you know, there's
Speaker 4: just less available ken nearby compared to what there used
Speaker 4: to be, especially in large cities. And you know the
Speaker 4: fact that more women are working means that more sort
Speaker 4: of potential grandmothers are also working as well, so that's
Speaker 4: another constriction. And the kind of supply of informal care,
Speaker 4: so that's one of the things that's driving the problem.
Speaker 1: So one of the things that's really striking, and you mentioned,
Speaker 1: you know, particularly say in New York City, there's so
Speaker 1: many people face childcare stress. People are tearing their hairs
Speaker 1: out trying to find someone to watch their baby or
Speaker 1: a young child and we see these charts of the
Speaker 1: price is going crazy and the numbers that people have
Speaker 1: to pay are pretty astronomical. And yet my impression is
Speaker 1: that the actual wages of the people who work in
Speaker 1: daycare centers or childcare centers are low, and so there
Speaker 1: is seems to be you know, I know, you're sort
Speaker 1: of the idea of a market failure is it. Maybe
Speaker 1: perhaps not the best way of framing it, but this
Speaker 1: does feel very intuitively like how people think of a
Speaker 1: market failure. Why are the costs for the end consumer
Speaker 1: surging at the same time the workers do not seem
Speaker 1: to be reaping much of the benefit from it in
Speaker 1: terms of rapid wage games.
Speaker 4: You know, one of the most basic market failures that
Speaker 4: often gets left out the discussion of market failure is
Speaker 4: that people can't participate in a market unless they have
Speaker 4: enough money. So what's happened with childcare is as inequality
Speaker 4: has increased, the demand for childcare has gone up, and
Speaker 4: the price of it has gone up. And what's happened
Speaker 4: is a lot of low income families have been just
Speaker 4: priced out of the market, so they're unable to buy it.
Speaker 4: So it's kind of like the housing market, which tilted
Speaker 4: very much towards high end housing and left US with
Speaker 4: a huge growing population of homeless people that can't afford
Speaker 4: housing because low income housing is so hard to find.
Speaker 4: So I think that's one of the factors that's driving
Speaker 4: the problem. But another one in New York City in particular,
Speaker 4: is that for a long time, the kind of safety
Speaker 4: valve was low age immigrants who were willing to work
Speaker 4: under the table as nannies or as occasional babysitters or childcare.
Speaker 4: We don't have very good statistics on what's happened to
Speaker 4: that supply, but it's pretty clear that the combination of
Speaker 4: the pandemic and immigration policy and cultural change in the
Speaker 4: US has kind of reduced that that informal supply that
Speaker 4: was once kind of helping lubricate the market. But you know,
Speaker 4: another factor is that is that the way the labor
Speaker 4: market's supposed to work is that when there's a shortage
Speaker 4: of labor, wages go up very rapidly. But it's really
Speaker 4: hard to raise wages in the childcare industry for a
Speaker 4: couple of reasons. One is a lot of it at
Speaker 4: the lower end relies on government subsidies and government you know,
Speaker 4: regulated rates and also on funding, and so if the
Speaker 4: funding stream doesn't increase, those subsidized centers can't pay higher wages. Right.
Speaker 4: So that's one kind of sticky point in the whole
Speaker 4: you know, in the whole process. But then another one
Speaker 4: is the example that I was you know, the point
Speaker 4: that I was making is that if you have enough
Speaker 4: money and there's a lot of scarcity, you can you
Speaker 4: can bid up the prices for kind of individual providers
Speaker 4: like nannies, right without really necessarily going through the daycare
Speaker 4: center care system. So it's not you know, I guess
Speaker 4: maybe a way to think about it is it's not
Speaker 4: a homogeneous product. You know, it's coming from all these
Speaker 4: different sources. And yeah, the market failure that you're referring
Speaker 4: to is kind of a function of a more complex
Speaker 4: institutional failure. I guess that's that's aggravating things.
Speaker 3: So I definitely want to talk about inequality, inflation or
Speaker 3: this idea that you have, you know, more price in
Speaker 3: elastic consumers who might be driving up prices for other people.
Speaker 3: But just before we do in terms of this idea
Speaker 3: of childcare is expensive and you might have someone who's
Speaker 3: paying two or three thousand dollars a month in New York.
Speaker 2: City or elsewhere.
Speaker 3: Where is that money going to If it's not going
Speaker 3: to the wages of the workers. And if you know,
Speaker 3: we were doing some prep on this before the episode,
Speaker 3: if profit margins for a lot of these childcare centers
Speaker 3: are relatively low, where does all that money go?
Speaker 1: Yeah?
Speaker 4: Well, yeah, it's always a good idea to follow the money,
Speaker 4: isn't it. But I guess one of the points I'm
Speaker 4: trying to make is that, you know, buying talker services
Speaker 4: on the informal market, like paying a nanny, probably those
Speaker 4: rates are going up a lot. Those aren't really part
Speaker 4: of the establishment you know, Bureer of Labor Statistics, establishment survey.
Speaker 4: So what we're seeing with kind of low and stagnant
Speaker 4: wages is childcare centers, right, including some that are subsidized
Speaker 4: through state and local funding. And you know, and yet
Speaker 4: there's this, you know, there's this kind of boutique market
Speaker 4: where people are really really paying super high prices and
Speaker 4: that's not necessarily reflected in the aggregate statistics.
Speaker 1: So so I mean, and you're sort of just putting
Speaker 1: together what you're saying. Part of the problem is to
Speaker 1: even talk about this as a market is there's so
Speaker 1: many different markets. So you have some people who work
Speaker 1: as nanni's and probably getting paid very well. You have
Speaker 1: a lot of people who are not getting paid any
Speaker 1: nominal wage because they're taking care of their child or
Speaker 1: they're taking care of their grandchild or something in the family.
Speaker 1: And then you have daycare or childcare workers. And so
Speaker 1: to even talk about this as like a market or
Speaker 1: to say, well, we know that the average wage of
Speaker 1: a childcare worker it's x is a flaw right from
Speaker 1: the beginning, because there are just so many different types
Speaker 1: of ways with which childcare is provisioned.
Speaker 4: Yeah, I think that's a really good summary.
Speaker 2: Thank you.
Speaker 1: I want to go back to the inequality aspect because
Speaker 1: I think I find that really interesting. And do we
Speaker 1: have any sense of like the distribution or the distribution
Speaker 1: like how many workers are moving from say working might
Speaker 1: have been working at a daycare or childcare center and
Speaker 1: now working getting paid much more as a very rich
Speaker 1: families nanny. Like what does the distribution there and that
Speaker 1: flow of workers look like, And how much does the
Speaker 1: sort of extreme wealth of some people in the ability
Speaker 1: to hire a nanny or obviously, in many cases or
Speaker 1: at least some cases, multiple nannies, Like, how much does that,
Speaker 1: in your view, sort of affecting the industry overall.
Speaker 4: Well, first of all, it's a really interesting empirical question.
Speaker 4: To answer it, you need, basically, you need some administrative
Speaker 4: data that follows people longitudinally, and there's often a lag
Speaker 4: in our access to that kind of longitudinal data. I
Speaker 4: recently worked on a study of human service workers in
Speaker 4: the city of Seattle, and we were able to get
Speaker 4: some administrative data showing that when people left human service jobs,
Speaker 4: including childcare, for another job, they got a really big
Speaker 4: pay increase. But that was you know, pre pandemic and
Speaker 4: not really very up to date. But you know, another
Speaker 4: way to think about it is the issue is that
Speaker 4: there's some selection bias. That is, like, when you see
Speaker 4: the what's happening to prices and wages, there's a lot
Speaker 4: you're you know, you're not seeing the people that cannot
Speaker 4: afford to buy childcare anymore, right, So some people are
Speaker 4: paying a whole lot more for childcare, but some people
Speaker 4: can't buy it at all. So what you're seeing is, yes,
Speaker 4: the price is going up because poor people can no
Speaker 4: longer afford to buy it. So that's why I think
Speaker 4: the analogy to housing is kind of is kind of helpful.
Speaker 4: You can actually make you know, affluent families are willing
Speaker 4: and able to pay a lot a lot of money
Speaker 4: for childcare and for other care services, right, But families
Speaker 4: at the bottom are not earning a wage that's sufficiently
Speaker 4: high to hire somebody to help them with that work
Speaker 4: and still be able to pay their other bills. So
Speaker 4: it's really kind of about a selection bias in the
Speaker 4: in the in the market. That's why I think the
Speaker 4: housing analogy, you know, kind of works. I mean, how
Speaker 4: could we how can we have a shortage of housing
Speaker 4: in a country where we have actually pretty pretty successful
Speaker 4: and efficient housing industry, but it's building homes for the
Speaker 4: affluent because the profit mersions hi are there?
Speaker 3: Right, And both of these things, I mean, housing and
Speaker 3: childcare would be considered essential services or things to have
Speaker 3: in order to live a full, normal economic life.
Speaker 2: And human life. But talk to us a little bit
Speaker 2: about how we got here.
Speaker 3: What are the choices that the US specifically made in
Speaker 3: order to create a sort of private childcare industry or
Speaker 3: I guess informal economy network.
Speaker 4: You know, I don't think there were explicit choices. I
Speaker 4: think it's kind of the chaotic result of a process
Speaker 4: of kind of collective bickering and negotiation over who should
Speaker 4: pay the cost of rearing the next generation. That's why
Speaker 4: I think it's really important to think about the big picture,
Speaker 4: like who should pay those costs. And the economics profession,
Speaker 4: like the social sciences in general, has kind of treated
Speaker 4: child rearing as though it's sort of a you know,
Speaker 4: a luxury good. It's a consumption good. You know, having
Speaker 4: a child is like having a pet. It's your pet.
Speaker 4: You should take care of it. It's your business. And
Speaker 4: now we're beginning to realize that that's a terrible metaphor
Speaker 4: because raising children is actually a really important component of
Speaker 4: economic sustainability, the future labor force, the people who are
Speaker 4: going to pay the taxes that are going to support
Speaker 4: us in our old age. So I think it's sort
Speaker 4: of coming, you know, I think this is becoming. There's
Speaker 4: more realization about this, looking at kind of the future
Speaker 4: of medicare and social security, the implications of a below
Speaker 4: replacement fertility rate. It's like, oh, gee, you know, it's
Speaker 4: going to be a problem if we don't have a
Speaker 4: working age population that's big enough to help us meet
Speaker 4: our names as we grow older.
Speaker 1: Can you talk through Suppose a family that cannot afford childcare,
Speaker 1: either a private NANU or even a sort of a
Speaker 1: more public option by public, I mean, or a sort
Speaker 1: of commercially available option at like a childcare or daycare center.
Speaker 1: What happens? I assume the burden of that in many families,
Speaker 1: you know, overwhelmingly falls on the mother. But what is
Speaker 1: the sort of the cost of that in terms of Okay,
Speaker 1: you have one mother who is able to find childcare,
Speaker 1: another mother who can't find it or can't afford it
Speaker 1: in terms of what is the cost to them in
Speaker 1: terms of their life, in terms of earnings and so
Speaker 1: forth from that unequal distribution of available childcare.
Speaker 4: Well, I mean, first, one big manifestation of it is
Speaker 4: resorting to part time or temporary work, you know, cycling
Speaker 4: in and out of the labor force. Like maybe you
Speaker 4: have an informal childcare arrangement COB together with a working schedule,
Speaker 4: and then your child gets sick. What do you do?
Speaker 4: You figure out a way? You know, you basically have
Speaker 4: to quit your job. You might hope that you get
Speaker 4: unemployment insurance. Then you have to kind of rely on
Speaker 4: friends and family, and then you go out and try
Speaker 4: and find another job where you can actually combine that
Speaker 4: with responsibilities for looking after your kids, or you look
Speaker 4: for neighbors or can you're willing to trade or exchange
Speaker 4: services for that. That's kind of a stressful and time
Speaker 4: consuming process, and you know, it has pretty significant consequences
Speaker 4: for lifetime earnings because anybody in the labor market who
Speaker 4: doesn't have a sort of consistent record of full time
Speaker 4: job tenure, it gets stuck at the bottom and it's
Speaker 4: not a real candidate for moving up the patiental ladder.
Speaker 4: So I think it really contributes a lot to the
Speaker 4: you know, kind of a serious lack of income mobility
Speaker 4: for mothers. I mean, the paradox is that there's a
Speaker 4: lot of evidence that high earning mothers actually pay a
Speaker 4: bigger quote unquote cost for motherhood because when they take
Speaker 4: time out from their careers, the penalty is very high
Speaker 4: because their earnings are very high, so they're taking a
Speaker 4: bigger hit in terms of earnings. But almost all of
Speaker 4: those women are also married to high earners and that
Speaker 4: provides a kind of buffer or safety net that reduces
Speaker 4: the impact of the motherhood penalty. Whereas women who are
Speaker 4: stuck in very part time kind of secondary labor market
Speaker 4: jobs are basically stuck there for life without much opportunity
Speaker 4: to you know, once their kids grow up and leave home,
Speaker 4: they could look for a better job, but they have
Speaker 4: no employment. You know, their employment history and their employment
Speaker 4: record kind of condemns them to it. Pretty low trajectory.
Speaker 3: So just on this note, you know, Joe and I
Speaker 3: started the conversation talking about the supply chain disruptions that
Speaker 3: we saw during the pandemic, and of course the pandemic
Speaker 3: was also extremely disruptive for the childcare industry and for
Speaker 3: anyone who had you know, younger children and suddenly had
Speaker 3: to figure out what to do with them while they
Speaker 3: were perhaps working from home and.
Speaker 2: Things like that. Talk to us about what.
Speaker 3: The pandemic showed about this sort of economic trajectory, because
Speaker 3: I remember, there's been a lot of high profile research saying,
Speaker 3: for instance, that the gender wage gap went up during
Speaker 3: the pandemic because a lot of women had to reduce
Speaker 3: their hours in order to look after their children and
Speaker 3: things like that.
Speaker 4: Yeah, what we know from Timyus research is that women
Speaker 4: increased their hours of childcare and house work significantly. I
Speaker 4: mean men did too, partly because of working of you know,
Speaker 4: being home work right, but women's the increase in women's
Speaker 4: workload was clearly bigger than that of men. I think
Speaker 4: there's another finding from time use research. You know, most
Speaker 4: of most time use research is based on the American
Speaker 4: Time Youse Survey, which is a really interesting representative sample
Speaker 4: of the US population that just asks people, you know,
Speaker 4: what did you do when you woke up? What did
Speaker 4: you do after that? What did you know? What did
Speaker 4: you do then? What did you do? So it gives
Speaker 4: us a real sense of how much unpaid work was
Speaker 4: being performed, both before and after the pandemic. And the
Speaker 4: survey asked the question a bunch of questions about active childcare,
Speaker 4: like how much time did you spend? Well, it's not
Speaker 4: asking these questions directly, but it's taking the responses that
Speaker 4: people give to the survey and then it's coding them
Speaker 4: into categories like here's the time that people respond reported
Speaker 4: feeding their children, Here's the time that people reported on
Speaker 4: average transporting their children. Here's the time that parents were
Speaker 4: on average reading aloud to their children. And those active
Speaker 4: childcare responsibilities are pretty they're pretty binding, but they're not
Speaker 4: really great that they're not really that high in terms
Speaker 4: of hours average hours per day. What's really much greater,
Speaker 4: for a much greater temporal demand for parents of young
Speaker 4: children is what's called supervisory time or in your care time,
Speaker 4: the fact that somebody has to be home and available
Speaker 4: or on call with children. And so this difference really
Speaker 4: explains a lot. For instance, when parents utilize paid childcare services,
Speaker 4: they're not really reducing their active childcare that much. They're
Speaker 4: coming home from work and they're engaging with their kids,
Speaker 4: they're getting their kids ready to go to school in
Speaker 4: the morning. There's still a lot of active care. What
Speaker 4: childcare really reduces out of home childcare really does for
Speaker 4: parents is it reduces supervisory constraints. Okay, it's literally against
Speaker 4: the law in most states to leave a child under
Speaker 4: the age of nine or even under the age of
Speaker 4: twelve alone in a house. So during the pandemic, here's
Speaker 4: what's interesting, a lot of people were working at home.
Speaker 4: What the time you survey shows is that supervisory time
Speaker 4: went way up, active childcare actually went down. Why is that, Well,
Speaker 4: I think it's because there's kind of a quantity quality
Speaker 4: trade off, and if you spend all of your day
Speaker 4: with kids around and being available or on call. Right,
Speaker 4: a lot of little small interruptions and a lot of interactions. Right,
Speaker 4: maybe you feel less need to dedicate two hours to
Speaker 4: them in the evening, reading aloud or playing games or
Speaker 4: something like that. It's sort of like childcare kind of
Speaker 4: spreads out into more diffuse activities. Then, you know, when
Speaker 4: they're working parents, the schedule is kind of like this
Speaker 4: huege bustle in the morning to get the kids off
Speaker 4: and then this pressure to pick them up after school,
Speaker 4: which is a pretty big temporal demand on working parents schedules.
Speaker 4: But then in the evenings there's this very concentrated peak
Speaker 4: of time feeding the child, bathing the child, reading aloud
Speaker 4: to the child, and sort of like baking up for
Speaker 4: not having seen the child during the day. There's this
Speaker 4: very concerted cultivation that takes place.
Speaker 1: Definitely relate to everything you just said there. Now I'm curious, though,
Speaker 1: the value of unpaid childcare, and I'm curious, like, a,
Speaker 1: how do you go about trying to put a number
Speaker 1: on that and be like, how useful in terms of
Speaker 1: your analytical framework is trying to put some sort of
Speaker 1: dollar amount on how much of that exists in the economy.
Speaker 4: Yeah, I think it's really important because it kind of
Speaker 4: reveals the significance of the care sector of the economy
Speaker 4: as a whole, taking reports of the number of hours
Speaker 4: spent an activity and multiplying them times a replacement wage cost,
Speaker 4: like what you would pay to hire someone to do
Speaker 4: that work. But obviously there are a lot of decisions
Speaker 4: to make about how to define the time and what
Speaker 4: replacement wage to choose for that calculation. You know, what
Speaker 4: you get is not really an accurate estimate, but it's
Speaker 4: a kind of a lower bound estimate. It's sort of saying,
Speaker 4: at the very least, if parents withdrew their services and
Speaker 4: we had to pay somebody to take their place, what
Speaker 4: would we have to pay. So I think it's really careful.
Speaker 4: I mean, I think it's really important not to suggest
Speaker 4: that it's you know, you're capturing the value of parenting. No, no, no,
Speaker 4: you're just you're capturing some kind of counterfactual question about
Speaker 4: what it would cost to replace the time that parents provide,
Speaker 4: And it just gives well, one thing that it shows,
Speaker 4: I think is that really the market economy is a
Speaker 4: pretty pretty you know, big but not that huge chunk
Speaker 4: of the total economy.
Speaker 1: So what do we talk about in terms of numbers
Speaker 1: or like sort of like what does it look like?
Speaker 4: Well, a lot of the estimates are kind of all
Speaker 4: over the place because they're using different wage rates and
Speaker 4: different definitions of time. But they it's kind of from
Speaker 4: between twenty five percent and forty percent of GDP is
Speaker 4: what a measurement of unpaid work comes to in my work.
Speaker 4: I mean, I've actually spent a lot of time working
Speaker 4: with the American Time Youth Survey on exactly this question.
Speaker 4: And what I've found is that a lot of estimates
Speaker 4: only counted active childcare, and they basically ignored time that
Speaker 4: children were reported as being in my care, the supervisory
Speaker 4: constraints and if you include I mean, which doesn't make sense.
Speaker 4: That's what do you hire a babysitter for. You don't
Speaker 4: hire a babysitter to you know, provide developmental care. And
Speaker 4: they're usually sitting there watching TV while or playing the
Speaker 4: video games while they're supervising kids. So if you include
Speaker 4: that supervisory time, it really increases the total value of
Speaker 4: unpaid work. Or here's a really interesting just to step
Speaker 4: step back from childcare a minute and just ask the
Speaker 4: question of all of the hours that people spend doing
Speaker 4: work in the United States today, how much of that
Speaker 4: happens in the labor market, how much of it is paid?
Speaker 4: And here for this, for this little mental exercise, we're
Speaker 4: just going to say, we're going to define work is
Speaker 4: anything you could pay somebody else to do for you.
Speaker 4: So it doesn't include leisure. You can't pay somebody to
Speaker 4: have a good time for you. It doesn't include sleep,
Speaker 4: you know, it doesn't include bathing or a.
Speaker 3: Lot of personal curtaining, gardening.
Speaker 4: It's cleaning, it's gardening, it's managing, it's shopping. Right, it's
Speaker 4: fifty percent of all labor hours in the US.
Speaker 2: Wow.
Speaker 3: So just on this note, you know, you made the
Speaker 3: point earlier that having children is important for both the
Speaker 3: economy and humanity.
Speaker 2: I believe for a while. But the children are our future?
Speaker 2: Is that what they said?
Speaker 4: Yes, so supposed to see it.
Speaker 3: So I won't subject all of our listeners to me singing.
Speaker 3: But just on that note, who should bear the cost
Speaker 3: of childcare? I mean, this seems to be the ultimate question.
Speaker 4: Yes it is. It is ultimate question, and it's so
Speaker 4: seldom that anyone ever asks it outright, So I'm really
Speaker 4: glad and I wish I could give you like a
Speaker 4: really specific answer, but I think it's sort of a
Speaker 4: matter of kind of democratic deliberation. I mean, certainly parents
Speaker 4: should pay a very significant share of the cost of
Speaker 4: raising children, because they're deriving a lot of satisfaction and
Speaker 4: enjoyments and a lot of i think improvement in their
Speaker 4: own kind of capabilities as a result of being a parent. Right.
Speaker 4: But it's also true that fellow citizens and tax payers
Speaker 4: and benefits recipients are also getting some really important benefits
Speaker 4: from kids. And there's some really interesting efforts to look
Speaker 4: at this what's called a fiscal externality. You know, like, okay,
Speaker 4: you're raising a child. We can project what that child
Speaker 4: is going to pay in taxes over their lifetime, and
Speaker 4: then we could subtract what we think that child is
Speaker 4: going to get in benefits over their lifetime. Right, and
Speaker 4: that net fiscal benefit in the US is pretty high. So, Joe,
Speaker 4: if you're a parent, you're creating probably a fiscal a
Speaker 4: fiscal externality that in the sense that your child is
Speaker 4: going to grow up to pay more in taxes than
Speaker 4: they get in benefits.
Speaker 1: Sitting aside parents versus nonparents, or what about you know, like,
Speaker 1: how much of the answer is to put, crudely sitting
Speaker 1: aside the specific design higher taxes on the rich to
Speaker 1: fund the provision of public childcare for everyone else, especially
Speaker 1: when talking about the fact that there's a number more
Speaker 1: and more people who are priced out of childcare overwhelmingly.
Speaker 1: You obviously have a growing but small percentage of the
Speaker 1: people that can afford one or multiple nannies. How much
Speaker 1: of that is as simple on some level choice of
Speaker 1: like progressive taxation either through income or the consumption of
Speaker 1: childcare services to fund it on a more broad scale basis.
Speaker 4: Oh, I think that's you know, a very clear strategy,
Speaker 4: and it's one that I completely support and arguing for
Speaker 4: more basically more public revision of care services and more
Speaker 4: support for unpaid care by increasing progressive taxes. And you know,
Speaker 4: I think that was kind of the motivating force behind
Speaker 4: the Build Back Better legislation that was the Democrats proposed
Speaker 4: in the fall, And I think we can push for
Speaker 4: that without you know, having a specific estimate. But there's
Speaker 4: also this kind of interesting, I think, philosophical question, which is, well,
Speaker 4: just how much should the cost of raising children be socialized? Right,
Speaker 4: we've already socialized them to some extent. The problem is
Speaker 4: we've we've socialized the benefits of raising children more than
Speaker 4: we've socialized the costs. Okay, so the social security system
Speaker 4: in Medicare has socialized the benefits. So your children aren't
Speaker 4: going to support you in your old age, but the
Speaker 4: younger generation as a whole is going to do that. Right,
Speaker 4: So it has literally created a redistribution from parents to
Speaker 4: non parents. And by non parents, I don't mean, you know,
Speaker 4: biologically nonparents. I'm defining parents as people who devote a
Speaker 4: lot of money and time and effort to raising kids.
Speaker 4: They're you know, they're creating a public, you know, a
Speaker 4: fiscal externality, and I think that that provides a kind of,
Speaker 4: I think an additional argument for more public support for parenting.
Speaker 2: Right just on this notion.
Speaker 3: I mean, my my impression of the existing system is
Speaker 3: that there are subsidies for low income families for some
Speaker 3: childcare services, but there aren't a lot. And again, correct
Speaker 3: me if I'm wrong. I don't think there are a
Speaker 3: lot of government run childcare centers. And I'm wondering, like
Speaker 3: what form should government support for childcare services actually come in,
Speaker 3: because again in America, I can imagine, you know, if
Speaker 3: you put a proposal on the table saying we're going
Speaker 3: to have government daycare centers. I feel like there is
Speaker 3: there is a portion of the population who would instinctively
Speaker 3: find that dystopian or sinister in some way.
Speaker 1: And if I could just tack onto that question, why
Speaker 1: is it that from your view, we've sort of accepted
Speaker 1: this idea of like, we do have government childcare basically
Speaker 1: starting at the age five, and so it's like once
Speaker 1: you hit kindergarten or whatever, like, there is public school
Speaker 1: that goes through the end of high school, which yes,
Speaker 1: of course there is an educational component, but every parent, no,
Speaker 1: it is a big part of the value is that
Speaker 1: childcare services. So just to tack on, why would it
Speaker 1: be so controversial to say, okay, we're going to have
Speaker 1: the equivalent of public school from birth or from three
Speaker 1: months or whatever.
Speaker 4: Well, I mean, I think that's a question kind of
Speaker 4: about the political and cultural climate and the divisions that
Speaker 4: have emerged, you know, partly as a result of the
Speaker 4: very transit inequality that we started out kind of emphasizing.
Speaker 4: I think it's pretty clear from international comparisons that integrating
Speaker 4: childcare into the public school system is a really good idea.
Speaker 4: And if we think that the public school system is
Speaker 4: too inflexible or not responsive to the needs of parents,
Speaker 4: we should that should be part of our process of
Speaker 4: changing the whole thing. I mean, one issue that often
Speaker 4: gets left out in this discussion is that, you know,
Speaker 4: ending the public school day at three o'clock in the
Speaker 4: afternoon is a tremendous inefficiency and anachronism as our long
Speaker 4: summer vacations. And so I think what we should be
Speaker 4: pushing for is kind of a bigger rethink of public
Speaker 4: education and childcare that is more kind of in keeping
Speaker 4: with the technological and economic changes that have occurred over
Speaker 4: the last fifty years.
Speaker 3: Or hear me out, we reduce working hours to match
Speaker 3: school times.
Speaker 4: Yes, that should be part of it.
Speaker 2: And we all have summer vacation. I prefer that solution.
Speaker 2: Well we just take off all.
Speaker 4: Yeah.
Speaker 1: I like the idea of everyone just getting it. I
Speaker 1: grew up with both of my parents were teachers, so
Speaker 1: it's like they had summer vacation.
Speaker 2: But yeah, I like this idea.
Speaker 1: It is crazy too, that like this major childcare service
Speaker 1: that the government provides, like we're just gonna take four
Speaker 1: months off parents, good luck, deal with it, find a
Speaker 1: camp if you can afford it. It really is crazy.
Speaker 4: And you know, yeah, children need time off, but why
Speaker 4: not give them time off in a different way than
Speaker 4: you know, three and a half uninterrupted months. I think
Speaker 4: there's a lot of hope we're thinking about that. And
Speaker 4: I totally agree with Tracy's point about reducing the paid
Speaker 4: work making it easier for people to choose a lower,
Speaker 4: lower working hours. And here again, this is why I
Speaker 4: think emphasizing the value of unpaid work helps that argument,
Speaker 4: because when you reduce pressure for increased hours of employment,
Speaker 4: people aren't using that time to goof off or couch surf.
Speaker 4: A lot of times, they're using that time to take
Speaker 4: care of their family, to take care of their communities,
Speaker 4: to volunteer, and you know, and really for really good
Speaker 4: activities and sort of this notion that any reduction in
Speaker 4: hours of employment is a kind of quote unquote loss
Speaker 4: of output is just camouflage.
Speaker 1: Can ask you mentioned international comparisons about merging the sort
Speaker 1: of childcare and daycare system with the public school. Who
Speaker 1: stands out to you when you look around the world,
Speaker 1: where is it being done right or where is it
Speaker 1: being done more equitably.
Speaker 4: Well, the Scandinavian countries have a very integrated system, but
Speaker 4: the French system is also very appealing because it includes
Speaker 4: not just a system where preschool teachers earn the same
Speaker 4: as regular teachers and universal, it also includes all these
Speaker 4: things like summer camp experiences are built into the school system,
Speaker 4: and medical care and health checkups are kind of integrated
Speaker 4: with the school system. So it's kind of a particular
Speaker 4: triumph of the French system. But you know, there's also
Speaker 4: a lot to learn from what's happened in New York
Speaker 4: City with Deblasio's expansion of childcare, which has raised a
Speaker 4: lot of interesting questions and points a really valuable lesson
Speaker 4: for the rest of the country. I'm not an expert
Speaker 4: on the particular features of it, but I know that
Speaker 4: it's contributed significantly to increasing the wages of chalk care
Speaker 4: workers in the city, and that there's been sort of
Speaker 4: it's been easier for them because it's now a city
Speaker 4: mandated you know, it's now part of the public sector.
Speaker 4: In a sense, it's made it easier for those daycare
Speaker 4: workers to bargain for higher wages.
Speaker 3: Interesting this is the universal preschool program. Although I think
Speaker 3: there was some criticism of it that it actually ended
Speaker 3: up with some preschool businesses closing because it's sort of
Speaker 3: sucked away a lot of the older kids that preschools
Speaker 3: actually make money on.
Speaker 4: Yeah, it's you know, it's not a total success story,
Speaker 4: but it is like a really important learning experience. I mean,
Speaker 4: I think they've also had they in some ways seem
Speaker 4: to have overestimated the constituency for all day childcare and
Speaker 4: so they have a little bit of an idle capacity
Speaker 4: right now. So yeah, but you know, we should be
Speaker 4: you know, talk about a really good theme for a podcast.
Speaker 4: That would be a really great one, right Just what
Speaker 4: what has happened in the city. What have people learned
Speaker 4: in the city from this really important experiment.
Speaker 3: So just going back to the premise of this conversation
Speaker 3: and the intro where we were talking about, you know,
Speaker 3: inflation and services versus inflation and consumer goods and things
Speaker 3: like that in wages as well, what do you think
Speaker 3: childcare says about the overall direction of the economy or
Speaker 3: can you sort of draw out some big picture economic
Speaker 3: points based on the childcare example.
Speaker 4: Well, I think we should direct more attention to what
Speaker 4: I would call the care sector, not just childcare. But
Speaker 4: see what childcare and elder care and healthcare all have
Speaker 4: in common and how important they are to the economy.
Speaker 4: And all three of those sectors involve collaboration between family
Speaker 4: members and paid workers for private businesses and government, and
Speaker 4: they've all evolved in this very ad hoc way that
Speaker 4: often kind of you know, rigidifies into kind of institutional
Speaker 4: inertia that makes them very difficult to change. But one
Speaker 4: of the things that's been happening, for instance, in the
Speaker 4: in the healthcare industry, is that hospitals and doctors have
Speaker 4: begun paying a lot more attention to who the at
Speaker 4: home caregiver is and when they send somebody home from
Speaker 4: the hospital, who is the person who's going to be
Speaker 4: helping with medication, who is the person who's going to
Speaker 4: be organizing the you know, uh, post operative care and
Speaker 4: so forth. They have have really realized that this is
Speaker 4: a crucial part of the overall landscape of care provision.
Speaker 4: That you know, you can you can do a really
Speaker 4: great surgery on somebody, and if they go home to
Speaker 4: a situation where there's nobody there to be helping them
Speaker 4: figure out how to take care of themselves and to
Speaker 4: kind of meet their needs, then they're back in the
Speaker 4: hospital the next day. So just there's so many different synergies, right,
Speaker 4: and there's so little, relatively little attention to the care
Speaker 4: sector and what it means. You know, we know that
Speaker 4: there are these really significant changes in mortality in the US,
Speaker 4: the so called deaths of despair, deaths from suicide, deaths
Speaker 4: from drug overdose, deaths from alcoholism, and it's such a
Speaker 4: it's so indicative of a kind of toxic effects as
Speaker 4: something that's going on in the economy, and you know,
Speaker 4: it's very consequential. It's not just a huge loss of
Speaker 4: human life, it's also you know, just a tremendous loss
Speaker 4: to families and communities. To have this kind of I
Speaker 4: think I would describe it as a destruction of the
Speaker 4: social climate. There's something about the social climate that's just
Speaker 4: creating a lot of stress and mental illness. And I
Speaker 4: think care provision, you know, ineffective care provision is part
Speaker 4: of that. Part of it is that families are less stable.
Speaker 4: Part of it is that families get less support. Part
Speaker 4: of it is that people are just very much isolated
Speaker 4: and you know, disembedded from their families and communities. And
Speaker 4: so it's so important to see that as an economic
Speaker 4: as well as a social problem.
Speaker 1: I just have one last question. You said something interesting
Speaker 1: about workers with public provision of childcare, workers able to
Speaker 1: gain more bargaining power. And a theme that we've talked
Speaker 1: about recently is that bargaining power sometimes comes with when
Speaker 1: you have a sort of single purchaser of the labor.
Speaker 1: And so whether it's workers in Amazon warehouses being able
Speaker 1: to organize the warehouse sector because they can point to Amazon,
Speaker 1: or even tenants being able to organize because of institutional
Speaker 1: landlords on Wall Street, the fact that childcare is so fragmented,
Speaker 1: the fact that many of them are in people's living
Speaker 1: rooms or small businesses with five employees or so forth.
Speaker 1: How much does that make it harder for workers to
Speaker 1: organize and sort of whether it's collectively bargain or just
Speaker 1: push for higher wages into some manner because the because
Speaker 1: the industry is just so fragmented.
Speaker 4: See, that's a good question. I don't really know exactly
Speaker 4: how to person I mean, I would say first that
Speaker 4: there is some evidence that public schools are kind of
Speaker 4: a monopsogy. And then one reason that teachers are so
Speaker 4: poorly paid overall in the US and their pay has
Speaker 4: declined in relative terms recently. It's partly that, you know,
Speaker 4: political the political climate has led to cuts and funding
Speaker 4: that have made it very difficult for them to bargain,
Speaker 4: even though they're very effectively unionized, and even though they've
Speaker 4: had a few kind of union successes. So I think,
Speaker 4: you know, there's sort of a big question mark about
Speaker 4: the efficacy of public sector unionism if voters and if
Speaker 4: you know, people in general don't, you know, aren't convinced
Speaker 4: that spending on care provision is going to pay off
Speaker 4: for them and for the economy as a whole. So
Speaker 4: I think that's why i'm you know, I tend to
Speaker 4: hammer on the look like everybody would benefit, everybody wh
Speaker 4: would benefit. But I think the biggest for people for
Speaker 4: workers in small childcare or family daycare centers, I think
Speaker 4: a bigger obstacle for them is that they know that
Speaker 4: the demand is very elastic. If they know that if
Speaker 4: they ask for wages that the company for higher wages,
Speaker 4: that the center they're working for is going to lose
Speaker 4: clients or lose customers. And a lot of studies of
Speaker 4: the childcare workforce show that they feel very caught by
Speaker 4: this dilemma like, Gosh, I really need higher wages, but
Speaker 4: if if they paid us higher wages, these families wouldn't
Speaker 4: be able to afford to pay to pay for these services.
Speaker 4: And I think that's a particular dilemma of providing services
Speaker 4: for a you know, a load to middle income population.
Speaker 1: Well, Nancy fall Bray, thank you so much for coming
Speaker 1: on the podcast. Fascinating discussion, huge topic that I'm sure
Speaker 1: we will revisit, and yeah, I appreciate you joining us.
Speaker 4: Yeah, it was fun to talk.
Speaker 2: Thanks, thank you, Thanks so much, Nancy. That was great, Tracy.
Speaker 1: I thought there were a number of really interesting themes
Speaker 1: from that. I mean, one is, I think just simply
Speaker 1: this idea of like how hard it is even to
Speaker 1: talk about like a childcare market or a childcare wage
Speaker 1: or a price that people pay for childcare, just given
Speaker 1: the plethora of different options available, whether it's nannies, public centers,
Speaker 1: private centers, you know, subsidized centers, family work, et cetera.
Speaker 1: Just like even just describing what the industry is clearly
Speaker 1: a challenge.
Speaker 3: Totally, And I feel like we actually need to speak
Speaker 3: to a preschool manager or something because I'm still going.
Speaker 2: To really yeah, I think we have a guess.
Speaker 3: I'm still confused about where the money is going. You know,
Speaker 3: people are paying thousands a month, where is that actually going,
Speaker 3: if not to the wages of the carers. I suspect
Speaker 3: it's going on things like rent and maybe like regulations
Speaker 3: and things like that, but I would love to talk
Speaker 3: more about it. And then the other thing that stood
Speaker 3: out to me was this idea of inflation inequality, which
Speaker 3: is something that's been coming up a lot recently. I
Speaker 3: think the New York Times called it the gentrification of
Speaker 3: the economy. So this idea that you know, businesses are
Speaker 3: increasingly catering to as the wealth gap gets bigger, a
Speaker 3: portion of the population that is more price inelastic and
Speaker 3: that can afford these services. And that kind of gets
Speaker 3: to Nancy's point as well, about how we're only really
Speaker 3: seeing part of the data set right because people who
Speaker 3: cannot afford these prices are just not paying for childcare.
Speaker 1: Nancy brought up the comparison, but the comparison to housing
Speaker 1: seems really acted. We've done episodes. It's like, no one
Speaker 1: wants to build this quote starter home unquote because there's
Speaker 1: just so much more money to build premium houses to
Speaker 1: build you know, premium multi family apartments and so things
Speaker 1: like that, and so you know, one of the things
Speaker 1: is that it sort of drives home like inequality is costly.
Speaker 1: It's costly for society, and you know, people like I think,
Speaker 1: you know, in our system, we sort of celebrate getting rich,
Speaker 1: et cetera. And probably you know that seems fine, but
Speaker 1: like there is a cost to having so much concentration
Speaker 1: of wealth in certain hands such that it, you know,
Speaker 1: can diminish the pool of available childcare, which then gets
Speaker 1: to Nancy's other key point, which is, like part of
Speaker 1: the reasons is that a market is because there is
Speaker 1: like a social positive externality towards like raising children that,
Speaker 1: like any everyone benefits from. I think she called it
Speaker 1: a fiscal.
Speaker 2: Surplus, was fiscal externality.
Speaker 1: Fiscal externality that is like just sort of not there
Speaker 1: in most things that we call like a market.
Speaker 3: The other thing I wish we'd been able to talk
Speaker 3: a little bit more about, but the choices that go
Speaker 3: into the current system. And I totally take Nancy's point
Speaker 3: that probably there wasn't anyone you know, thinking about this
Speaker 3: specifically over the course of fifty years and coming up
Speaker 3: with the coordinated, holistic approach. But I do also think
Speaker 3: one of the reasons we got to the current system
Speaker 3: is because of let's say, complicated attitudes towards women actually
Speaker 3: working you know, thirty or forty or fifty or sixty
Speaker 3: years ago.
Speaker 1: Yeah, there's so much just even this question of like,
Speaker 1: well is what con said labor, which I thought was
Speaker 1: an interesting sort of discussion that I hadn't really thought
Speaker 1: of in terms of like, Okay, there are things that
Speaker 1: we call like active childcare parents, and then there are
Speaker 1: things it's like were you're just there to like sort
Speaker 1: of supervise them, pretty like deep questions that are sort
Speaker 1: of intensely cultural that sort of perhaps inform like how
Speaker 1: these how the how the system evolved in the way
Speaker 1: it did.
Speaker 2: Absolutely, shall we leave it there? Let's leave it there,
Speaker 2: all right?
Speaker 3: This has been another episode of the Odd Loots Podcast.
Speaker 3: I'm Tracy Alloway. You can follow me on Twitter at
Speaker 3: Tracy Alloway.
Speaker 1: And I'm Joe Wisenthal. You can follow me on Twitter
Speaker 1: at the Stalwart. Follow our guest Nancy Fulbray. She's at
Speaker 1: en Fulbray. Follow our producers Carman Rodriguez at Carmen Arman
Speaker 1: and dash Ol Bennett at Dashbot and check out all
Speaker 1: of our podcasts at Bloomberg under the handle at podcasts.
Speaker 1: And for more odd Lots content, go to Bloomberg dot
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Speaker 1: Really fun conversations there. Thanks for listening
Speaker 4: In