Child Care Affordability: Will the New Policy Work? Or Is There Still Progress to be Made?

July 26, 2017

With a variety of new policies on the verge of implementation, one can’t help but wonder…What’s next for my family and me?

The Tax Policy Center (TPC) is one of many analytical groups that has been examining the new tax policy in order to find answers to these types of questions. In their research paper, Who Benefits from Present Trump’s Child Care Proposals?, the TPC examines President Trump’s new tax plan, its benefits, and its drawbacks. Their analysis showed that the new policy’s defining factor of determining child care aid per family will be the family’s annual income. According to their research, low-income families will benefit the least from the new policy. According to the TPC’s summary, about 70 percent of benefits go to families with at least $100,000, and 25 percent of benefits go to families with at least $200,000. Very few benefits go to the lowest income families, who are likely to struggle most with paying for child care. Without the proper aid, child care will become even more unaffordable than it already is for low-income families, which will increase child poverty and debt. This is troubling to low-to-middle income families that require child care to survive, but is there a viable solution to the child care problem?

Even though the child care workforce is projected to have one of the fastest employment growth rates through 2020, families and experts are still worried it may not enough to make child care affordable enough. The child care field, like many health care and education fields, is subject to the “cost-disease.” Child care positions require relatively little training but are incredibly labor intensive, making it difficult to manage a family budget. This makes our child care crisis extraordinarily perplexing to policymakers, and in turn, extraordinarily hard to fix.

A popular bipartisan opinion is for U.S. policymakers to implement a more substantial and fully refundable child tax credit (CTC). By doubling the current CTC to $2,000 and making it refundable, the economy could see an increase in the workforce like Canada did after it introduced universal child care benefits and experienced a sizable increase in the employment of married mothers. This would, in turn, simultaneously decrease child poverty and increase the size of the workforce. Much like many other ideas for the child care industry, the increased and refundable CTC has its critics but is proving to be quite resilient.

It may not be a proven fix, but Canada’s similar plan is showing positive results, encouraging us to ask whether this could be the answer to the affordable child care phenomenon.

Find out more about the high cost of child care in our, Parents and the High Cost of Child Care: 2016 report.

Topics: Policy & Advocacy

Adina Young

Written by Adina Young

Adina Young is the Sr. Communications Manager at Child Care Aware® of America.