Vermont and New Jersey are at the forefront of policies designed to benefit working families and the economy.
By Kelly Burch, Granite State News Collaborative
A year ago, most working parents — particularly mothers — would have said that it was difficult to balance the demands of home life and work. That’s before the coronavirus hit, shutting down schools and daycares, disrupting routines, and forcing more than 1 million people from the workforce in September alone. Most of the people who left the workforce were women, who were twice as likely as men to blame their departure on lack of childcare.
The pandemic has exacerbated existing challenges for working families, and also opened up new discussions about the public policies that might alleviate their burden. A mom and toddler participate in a pod playgroup at Thrive Family Resources in Hooksett (courtesy photo).
The pandemic has exacerbated existing challenges for working families, and also opened up new discussions about the public policies that might alleviate their burden.
“It’s unfortunate that it takes a pandemic to get us talking about women’s roles in caregiving, how to assist caregivers and workers,” said Kristin Smith, a visiting associate professor of sociology at Dartmouth College, who studies labor markets and work and family policy. “The pandemic is making this a much more talked about issue than it has been in the past.”
While these challenges affect most families, they have a disproportionate impact on families of color. Nationally, families of color are more likely to experience child-care related job disruptions that impact their finances, and are less likely to have access to and use paid family and medical leave. There is not data specific to the experience of people of color in New Hampshire with regards to these issues, Smith said, adding that she imagines the national trends would hold true.
Smith and other experts agree that instituting public policies including paid sick leave, paid family leave and strengthening childcare would help alleviate the burdens that working families face. As the country and the state search for solutions, policy makers can learn from efforts that are already in place across the country.
The childcare crisis
Since the pandemic, 52% of parents say that it’s been difficult to handle childcare responsibilities, up from just 38% pre-pandemic, according to the Pew Research Center. The same study found that 65% of parents who work at home are caring for their kids while they work. When schools closed for in-person learning, many parents lost a critical part of their child-care plan.
The pandemic has highlighted how frail the childcare infrastructure is in the United States. The current each-family-for-themselves model is built on the historical premise that women will provide unpaid childcare, said Jess Carson, a research assistant professor of public policy at the University of New Hampshire’s Carsey School of Public Policy. But with 72% of mothers employed, the childcare system needs to catch up.
“It’s our biggest emergency in the pandemic and it was the biggest emergency before the pandemic,” said Carson.
The childcare industry suffers from a dual problem: the high cost of care, and the low pay for workers.
“Parents are paying too much, and providers are paid too little,” said Carson.
The federal government defines affordable childcare as that which takes up 7% or less of a family’s income. But in the Granite State, where a year of full-time infant care costs $12,971, childcare takes up more than 15.3% of the median family’s income, according to the Economic Policy Institute. For childcare workers — who often have low wages — having one infant in full-time care would take up more than half of their pay.
From a business standpoint, childcare doesn’t make sense, Carson said. The cost of providing care is high, while there’s a cap on how much families are able to pay.
“The math just doesn’t work out,” Carson said.
That’s why the United States needs policies that reframe childcare as a public good — just like public education, Carson said. We would never expect each parent to pay for their child’s schooling, it’s not feasible to expect parents to shoulder the burden of childcare, she said.
A nearby solution
One of the leaders in childcare policy nationally is nearby Vermont. In 2010, legislative action in the state established Building Bright Futures. The organization brings together private and public players in the childcare space to establish an integrated childcare system.
According to Melissa Riegel-Garrett, Vermont’s Child Development Division policy director, two aspects of that system in particular make the state stand out: the state’s Child Care Financial Assistance, funded heavily by state money in addition to federal dollars, ensures that all families who need childcare can afford it. Since the program is well-funded, there is no wait list for families receiving a subsidy to access childcare, Riegel-Garrett said. Then, there's the state's universal pre-kindergarten program, which started in 2015 and gives all three-, four-, and five-year-olds access to 10 hours of childcare each week.
Nine states and Washington D.C. have enacted paid family leave programs. Here’s a brief overview of programs in New Jersey, an early adopter; Massachusetts, our neighbor; and Colorado, a state with the plan considered the gold standard by one expert. Source: https://www.abetterbalance.org/resources/paid-family-leave-laws-chart/
“They’ve been pretty bold,” Carson said of Vermont.
Riegel-Garrett attributes the state’s leadership in childcare to advocacy work done in the state.
“There’s been years of work by advocates in the private and public sectors to educate policy makers, but also Vermonters in general, about the importance of early years and the connection between childcare and the economy,” she said. “That work has come to a tipping point in the past few years.”
Although Riegel-Garrett couldn’t point to data on the impact of the childcare initiative on the economy, she said that anecdotally the link is clear, especially since the pandemic.
“When we started to reopen in May and June, it was abundantly clear the urgent need to make sure that childcare was open and available to families,” she said.
To prop up the system, Vermont allocated more than $40 million in funds to the childcare system. Programs included funding for emergency childcare, funds to help providers reopen, and a one-time payment of $938 to childcare workers. (New Hampshire implemented hazard pay for first responders including firefighters and police officers, but did not offer hazard pay to other essential workers like daycare providers and healthcare workers.) Riegel-Garrett said that Vermont is in the process of infusing another $12 million from federal funds from the second stimulus bill into the childcare economy.
Unlike some other areas in the country, various players in Vermont, from governors to the business sector and individual Vermonters seem willing to spend on shoring up the childcare system, Riegel-Garrett said.
“All sectors of the economy and Vermonters understand why this is important,” she said.
Lisa Ventriss is president of the Vermont Business Roundtable, an organization of 125 CEOs working toward public policy initiatives in the state. She said that after years of education about the economic impact of investing in childcare, the business community broadly supports expanded access to childcare.
“The question about, ‘is this a worthy place to invest,’ has been addressed and answered. The business community says, ‘yes’,” Ventriss said. Her organization believes that investment in childcare should be a major economic policy in Vermont.
Making childcare accessible isn’t cheap — Vermont spent more than $47 million in 2018 on the subsidy program alone. The state is currently addressing the need for additional, sustainable funding, as part of HB171.
“Vermont is finally at this place where we are worrying about the funding, not whether this is a worthy investment,” Ventriss said.
A 2017 report by the Vermont Business Roundtable found that for every $1 invested in childcare, the state economy would gain a $3.08 return. National research indicates that society earns more than $7 return for every $1 spent on early childhood education.
The need for childcare has been underscored during the pandemic, as parents have grappled to be both caregiver and employee, Ventriss said.
“Employers are seeing that this is part of our economic recovery,” she said.
Still, the upfront cost of accessible childcare on the state or federal level is daunting.
“People aren’t always willing to make investment in things that have payoffs down the line,” Carson said.
The need for paid family leave
One support for families that is making more progress is the idea of paid family leave.
“The pandemic has brought these issues to the fore,” said Smith, of Dartmouth. “Right now there’s an opportunity for some of these bills to get discussed and to be passed.”
Last March, the state legislature passed a bill that would create a paid family leave program in the state, but Gov. Chris Sununu vetoed it in July. He vetoed a similar bill in 2019, saying that requiring employees to pay 0.5% of their wages into the plan would amount to an income tax. He’s introduced his own paid leave proposal that would provide state workers with 6 weeks of paid leave financed entirely by the state and allow private-sector workers and businesses to opt-in to the program if they choose. Last year, the Governor’s preferred bill, SB 730 died in the chamber. Sununu has incorporated the plan into his budget proposal this year, which is currently making its way through the legislative process, said Ben Vihstadt, spokesperson for the Governor’s office.
There’s also discussion about creating a paid family leave program at the federal level. Currently, the The Family and Medical Leave Act, passed in 1993, provides job protection and unpaid leave for qualified workers who need to take time off to care for themselves or their family members.
“That was envisioned as a first step and the second step [of paid leave] would follow shortly, but here we are,” said Smith.
Despite the stall federally, states are making progress on the issue. Nine states and Washington D.C. have enacted paid family leave programs. California was the first state to enact paid leave in 2002, with New Jersey following suit in 2008.
“Other states that are looking at this as a solution can learn from the mistakes that New Jersey and other states have made, and what they’ve learned along the way,” said Debra Lancaster, executive director of the Center for Women and Work at Rutgers University in New Brunswick, New Jersey.
Since the pandemic, 52% of parents say that it’s been difficult to handle childcare responsibilities, up from just 38% pre-pandemic, according to the Pew Research Center. The same study found that 65% of parents who work at home are caring for their kids while they work. When schools closed for in-person learning, many parents lost a critical part of their child-care plan. (Photo by Aaron Lipsky courtesy of the Keene Sentinel)
One of the most important parts of any paid family leave program is the level of reimbursement. The New Jersey plan — which is funded entirely by worker contributions — replaces 85% of an individual’s weekly income, with a cap in place for high earners, Lancaster said. If a reimbursement rate is too low, the plan doesn’t work for lower-paid workers because the amount they receive isn’t enough to subsist on. Paid leave plans need to reimburse at least 60-65% of an earner’s wages to be useful, Smith said.
Higher reimbursement rates also help promote more fathers taking leave. In 83% of heterosexual families where both parents work, the father makes more than the mother. Oftentimes, that means families are unable to have the father take leave if it is not well-funded, Lancaster said.
“We want to make sure the wage replacement programs address the whole household’s wages,” she said.
Research from New Jersey and other states with paid leave programs has shown the economic benefits. In both California and New Jersey, paid leave has been associated with more workforce engagement from women, particularly those without degrees who generally earn less. In states with paid leave fathers are more likely to take time off at the birth of a child, and mothers take longer leave. Women with access to state leave are less likely to utilize public benefits after the birth of a child, Lancaster said. There are also health benefits, including lower risk of depression for mothers and higher breastfeeding rates.
According to the Center for American Progress, the economic benefits of paid family leave can be understood along five points. Paid family leave increases labor force participation, lifetime learnings and retirement savings, particularly among women, thus reducing reliance on public benefits. It increases employee retention, lowering costs for employers and increasing businesses value in some cases. Paid leave can improve outcomes in early childhood, having intergenerational effect. Carson points to research that found that a $3,000 increase in a family’s income is associated with 17% increased earnings for children as adults -- a boost to the economy long term.
Lancaster points out that paid family leave isn’t just for people who are growing their family. Most programs allow employees to take time off to care for a sick parent, partner or child, or to attend to their own medical issues.
“People in all walks of life need to care for a loved one at some point,” she said.
Perhaps because of that, the idea of paid family leave is gaining bipartisan support.
“This is more of a purple solution,” Lancaster said. “There’s evidence to say this helps people stay in the workforce, it addresses inequality issues, and it allows employers to plan better. This is in no way a handout. In that sense, it’s almost like a no brainer. Why wouldn’t you do this?”
As New Hampshire considers a paid leave plan, it’s important to have one that’s accessible to the largest number of people, including gig workers and the self-employed. The plan passed in Colorado last fall is considered the gold standard in inclusion, said Smith, in part because it covers almost all workers.
Although the New Jersey plan has been active for more than 10 years, many people still aren’t aware that they can utilize paid leave, Lancaster said. Those who know about the plan — especially people in male-dominated sectors — often hesitate to take the leave they’re entitled to. That’s the next barrier that Lancaster would like to see her state address.
“The challenge is really in creating a culture in which leave taking is supported and encouraged,” she said.
COVID As A Testing Ground
The pandemic has prompted state and federal governments to take swift action to support workers, with things like stimulus payments, expanded unemployment and (limited) paid sick leave. It’s been a time to push back on individualism in America, and realize that sometimes a problem needs a central solution, Carson said.
“COVID has been a testing ground for a lot of efforts that we may not have tested otherwise,” she said. “It’s a good time to take the lessons learned from that and push forward in the years to come.”
While tackling issues like work-life balance and equitable access to childcare can seem daunting, there are solutions, Smith said.
“We know what we need to do. We just have to have the political will to do it.”
These articles are being shared by partners in The Granite State News Collaborative. For more information visit collaborativenh.org.