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Illustration: Annelise Capossela/Axios

The child care industry is collapsing under the strain of the pandemic.

Why it matters: With parents making up a third of the U.S. workforce, the fate of schools and day care centers and the strength of the economy are inextricably linked — given that the hit to closed schools could be an estimated 3.5% of GDP.

"The child care system needs a large-scale, immediate bailout. Full stop," says Alicia Modestino, an economist at Northeastern University.

By the numbers: Without financial help, 50% of day care centers will go out of business, erasing some 4.5 million slots for young kids, the Center for American Progress projects.

  • Only 25% of child care businesses received loans under the Paycheck Protection Program (PPP).
  • Day care centers got $3.5 billion in aid under the CARES act, but economists say the industry needs around $10 billion per month to make it through the coronavirus crisis. The latest stimulus package in Congress has no money earmarked for these businesses.
  • Case in point: Mary Grimmer, who owns Little Treasures Schoolhouse, which has a few locations north of Boston, told me she went from turning an $18,000 profit in February to losing $58,000 in July. Grimmer did get a PPP loan, which softened the blow.

And even the places that are open are struggling with the additional costs and burdens of running a day care during a pandemic.

  • They've had to buy new toys because kids can't share anymore; they've taken on fewer kids to abide by social distancing rules; and they've had to hire more people to keep everything sanitized. Grimmer said she had doubled her payroll after reopening.
  • "What concerns me most moving forward is another shutdown," she says. "I could not imagine how we could survive another one."

Worth noting: Women are suffering doubly as a result of the child care crisis, says Catherine White of the National Women's Law Center.

  • If centers close and jobs are lost, it'll affect women, who represent 90% of the country's child care workers. One in five of these jobs has already been lost since February.
  • "And on the other side, women are taking on the burden of caregiving responsibilities at home," says White. "They're going to lose out most and not be able to return to the workforce if there isn’t child care available."

Go deeper: Beyond the stress of overwhelmed parents or the cabin fever of restless kids, closing schools and day cares for the pandemic could cost about $700 billion in lost revenue and productivity.

Go deeper

Dec 10, 2020 - Health

Health disparities are worse in the U.S.

Data: Doty, et al., 2020, "Income-Related Inequality In Affordability And Access To Primary Care In Eleven High Income Countries"; Table: Andrew Witherspoon/Axios

Socioeconomic disparities in health care are significantly worse in the U.S. than in other wealthy countries, according to a new study by the Commonwealth Fund, published in Health Affairs.

Why it matters: Wealthy Americans have long had better access to care — and therefore better outcomes — than poor Americans. And the coronavirus' disproportionate impact on low-income Americans and people of color has made those disparities glaringly obvious.

Updated 5 hours ago - Politics & Policy

Omicron dashboard

Illustration: Brendan Lynch/Axios

  1. Health: Pfizer and Moderna boosters overwhelmingly prevent Omicron hospitalizations, CDC finds — Omicron pushes COVID deaths toward 2,000 per day — The pandemic-proof health care giant.
  2. Vaccines: The case for Operation Warp Speed 2.0 — Starbucks drops worker vaccine or test requirement after SCOTUS ruling — Kids' COVID vaccination rates are particularly low in rural America.
  3. Politics: Biden concedes U.S. should have done more testing — Arizona says it "will not be intimidated" by Biden on anti-mask school policies — Federal judge blocks Biden's vaccine mandate for federal workers.
  4. World: American Airlines flight to London forced to turn around over mask dispute — WHO: COVID health emergency could end this year — Greece imposes vaccine mandate for people 60 and older — Austria approves COVID vaccine mandate for adults.
  5. Variant tracker

Arizona governor sues Biden administration over COVID funds tied to mandates

A teacher prepares a hallway barrier to help students maintain social distancing at John B. Wright Elementary School in Tucson, Arizona, on Aug. 14, 2020. Photo: Cheney Orr/Bloomberg via Getty Images

Arizona Gov. Doug Ducey (R) filed a lawsuit Friday against the Biden administration for ordering the state to stop allocating federal COVID relief funds to schools that don't comply with public health recommendations such as masking, the Arizona Republic reports.

Why it matters: The Treasury Department said last week that the state would have to pay back the money if Ducey does not redesignate the $173 million programs to ensure they don't "undermine efforts to stop the spread of COVID-19."

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