The messed up market for child care workers
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The number of people working in child care still isn't back to pre-pandemic levels, per new research from the Chicago Fed.
Why it matters: This sector is a key part of the U.S. economy. Without access to care, parents, typically women, often can't join the labor force — at a time when the job market is still tight.
By the numbers: A big problem is that child care workers' pay is low — the median wage is $14.60 an hour, in the bottom 5% of all occupations, the research finds.
- That's less than increasingly attractive alternatives in fields like waitstaff ($15.36); or housekeepers ($16.08).
- Pay for child care workers, adjusted for inflation, increased just 5.5% between 2019 and 2023, while those other low-paying service sector jobs have experienced much bigger increases (see the chart above).
- Fun fact: 95% of child care workers are women, the researchers find.
Zoom in: What's distinctive about the Chicago Fed report is that it attempts to hone in only on those employed in traditional child care — not K-12 school workers.
- The researchers look at those who self-report their occupation in the Labor Department's Current Population Survey as "child care worker" or identify as working in "child day care services."
- Other data from the Bureau of Labor Statistics that are typically used to evaluate employment in the industry covers a broader swath of workers — and in that cut, employment has recovered to pre-pandemic levels.
The big picture: The child care job market is unusual. There is a record number of mothers in the workforce, and the demand for care is high right now. Prices have gone up, other research has found.
- You'd expect that the high demand for caregivers would lead to higher wages to attract more workers. That's what happened in the restaurant sector, where pay for waitstaff is up nearly 18% since 2019.
- But the sector is constrained when it comes to prices by what parents of young children — folks likely at the start of their careers with more limited funds — can pay for care. (The restaurant sector, by comparison, has a wide customer base.)
- When parents can't afford care, typically they drop out of the workforce — to provide that care themselves "for free." And parents who live close to extended family, who are willing and able to provide free care, may be more price sensitive, the researchers point out.
The bottom line: Pay for child care workers is lower than other similar jobs — and employers can't necessarily raise prices to attract more people — so the industry is struggling to hire and parents are struggling to find care.
