The pandemic revealed an important truth: our economy can't reach its full potential without reimagining caregiving, which continues to have significant and unequal impacts on outcomes for women.
Over 2 million women left the labor force between February and October 2020, during the height of the coronavirus pandemic in the United States.1 The global crisis continues to exacerbate deep-seated inequalities that women have faced for decades—pay disparities, undervalued work, inadequate caregiving supports—all of which threatened to push them out of the labor force all together.
Since March 2020, caregiving responsibilities for children and loved ones alike forced millions more women to reduce hours, forego professional opportunities, and experience unsustainable levels of stress while working to support themselves and their families. The closure of schools, child care, and other care services only intensified the pressing demand on families, with women of color most affected.2
Caregiving: A universal need, an inequitable burden
Care is a universal need and critical for our health, well-being, and protection. From infants to adults to elders, every household is likely to need care support, or caregiving, at some point in time.3
Even before the pandemic, people were struggling with caregiving costs and responsibilities. In some states, the typical cost to purchase caregiving services, such as child care and elder care, could easily exceed 30% of a family’s income, sometimes exceeding rent or college tuition.4
Today, women are more likely to perform significant unpaid labor that fosters the health and well-being of many, such as unpaid caregiving and domestic work. At the same time, women’s earnings are playing a greater role in family incomes than ever before and have become increasingly important for financial stability, retirement security, and the economy. Building an equitable care infrastructure is not only necessary for women to have the choice of remaining in the labor force and caring for their loved ones, equalizing the care burden is necessary for greater household financial stability and well-being.
Caregiving history is rooted in race and gender
Caregiving in the U.S. has been historically undervalued and underpaid due to a history that is inseparable from racial and gender dynamics. Women were, and continue to be, prominent in caregiving roles, especially those involving child care, nursing, and domestic work. These functions were often one of the few employment options available to women for many years.
Women of color have provided child care and domestic work since the very beginnings of our nation, with many Black women, for instance, being forced to care for the children of their enslavers.
Throughout the 1900s to present day, employers’ exclusion of women of color and immigrant women from better-paying, higher-status jobs with mobility meant that some had little choice but to perform private domestic service work for white families.5 We continue to see these impacts on occupational choices and caregiving responsibilities today.
Our current care industry is a patchwork of unpaid, informal, or poorly paid work supported by a mix of individual, employer, and government payments. Those employed in the care workforce, mostly women of color, face financial security challenges due to the very design of a system they work to support. Care workers do not earn a living wage, with home care workers earning a median of $14.15 per hour, or $29,430 per year, and child care workers earning $13.22 per hour, or $27,490 per year.6,7 In addition to being among the lowest-paid workers in the nation, care workers often experience inconsistent work hours, marginal labor protections, and limited opportunities for career growth and mobility.
Equitable caregiving means a better economy, better nation
An equitable care infrastructure is essential for families and care workers to earn income, accumulate assets, and save for the future—and America is finally waking up to this reality. In April 2021, President Joe Biden put forth bold proposals under the American Jobs Plan and the American Families Plan. Provisions totaled $1.8 trillion in federal investments and tax credits for families and children, including:
- $225 billion to high-quality, affordable child care and the child care workforce
- $400 billion to expand access to quality, affordable home-or community-based care for aging relatives and people with disabilities
- 12 weeks of paid leave for all workers to tend to their own health conditions or provide caregiving for family members
- Extensions to the expanded child tax credit through 2025
An equitable care infrastructure supported by such policies is a boon to the economy. Care policies like those above can bolster economic growth by increasing the financial security of families, increasing labor force participation, and increasing productivity in the long-term. It is estimated that households lose a total of $31.9 billion in wages each year due to a lack of access to child care, paid leave, disability leave, and caregiving leave.8 For women, even a temporary exit from the workforce has long-term impacts on earnings and savings. Yet an equitable care infrastructure will contribute greatly to the broader economy. Paid labor for women alone accounts for $7.6 trillion9 toward national gross domestic product, with one estimate projecting that the U.S. economy would be $1.6 trillion larger than it is now if more women entered and stayed in the workforce.10
Advocacy from feminist groups such as the #CareCan’tWait coalition and the Marshall Plan for Moms continues to draw attention to care responsibilities shouldered by women in America. Employers have also been essential in providing family supports and benefit structures, such as caregiving benefits, paid leave benefits, flexible working benefits, disability insurance, and long-term care insurance. Private sector actors are playing an increasing role, such as the TIME’S UP Care Economy Business Council, which is actively assembling a coalition of companies to create a comprehensive care infrastructure. However, more is needed to ensure long-term equity for women and care workers, including equal pay laws, anti-discrimination protections, equal access to benefits, and increased wages for the most vulnerable households.
A national care infrastructure benefits us all. It is integral that all stakeholders—government, business, philanthropy, and investors—play a role in building one that is affordable, equitable, and reaches all households in our society.
The views expressed in this post are those of the contributing author and do not reflect the position of the New York Fed or the Federal Reserve System.
Sources
1. Nearly 2.2 Women Have Left Labor Force Since February. National Women’s Law Center. November 2020. Found on the internet at https://nwlc.org/wp-content/uploads/2020/11/October-Jobs-Day.pdf
2. Women of Color, Wealth, and COVID-19. Sally Sim and Dedrick Assante-Muhammad. National Community Reinvestment Coalition. Found on the internet at https://ncrc.org/women-of-color-wealth-and-covid-19/
3. The True Cost of Caregiving: Why An Equitable Care System for Children, Adults, and Elders is Essential to Household Financial Security. Aspen Institute. June 2020. Found on the internet at https://assets.aspeninstitute.org/wp-content/uploads/2020/05/The-True-Cost-of-Caregiving.pdf
4. High quality child care is out of reach for working families. Elyse Gould and Tanyell Cook. Economic Policy Institute. October 2015. Found on the internet at https://www.epi.org/publication/child-care-affordability/
5. Black women’s labor market history reveals deep-seated race and gender discrimination. Nina Banks. Economic Policy Institute. February 2019. Found on the internet at https://www.epi.org/blog/black-womens-labor-market-history-reveals-deep-seated-race-and-gender-discrimination/
6. Home Health and Personal Care Aides. Occupational Outlook Handbook. U.S. Bureau of Labor Statistics. Found on the internet at https://www.bls.gov/ooh/healthcare/home-health-aides-and-personal-care-aides.htm
7. Childcare Workers. Occupational Outlook Handbook. U.S. Bureau of Labor Statistics. Found on the internet at https://www.bls.gov/ooh/personal-care-and-service/childcare-workers.htm
8. The Rising Cost of Inaction on Work-Family Policies. Sarah Jane Glynn. Center for American Progress. January 2020. Found on the Internet at https://www.americanprogress.org/article/rising-cost-inaction-work-family-policies/
9. A Day in the US Economy Without Women. Kate Bahn and Annie McGrew. Center for American Progress. March 2017. Found on the internet at https://www.americanprogress.org/article/a-day-in-the-u-s-economy-without-women/
10. The Key to Unlocking US GDP Growth? Women. Beth Ann Govino and Jason Gold. S&P Global. Found on the internet at https://www.spglobal.com/_Media/Documents/03651.00_Women_at_Work_Doc.8.5x11-R4.pdf
