It’s always a bad sign when a president wants to revive in peacetime a policy that thrived in the midst of wartime central planning. This is what happened during the State of the Union address. President Obama bragged of the policy that lasted from 1944 to 1946 in which a mere 130,000 children (as Nick Gillespie points out) had their daycare covered by the federal government.
Right now, the feds pay for 1.3 million kids to be in daycare, which means that there are ten times as many children in such a program now as versus 1944. The war policy was never repealed. It’s therefore pointless to cite a policy from World War II that was small compared with current policies.
Even so, how did this wartime program come about? The federal government had drafted men to march off to foreign lands to kill and be killed. On the home front, wives and moms were drafted into service in factories to cover the productive needs of the country while the men were gone. That left the problem of children. Back in the day, most people lived in close proximity to extended family and that helped. But for a few that was enough. So the feds coughed up money for day care.
The program was a reproduction of another program that had begun in the New Deal as a job creation measure and then later suspended when the New Deal fell apart. The purpose of both efforts was not about children. It was about adults and their jobs.
Obama wants to make this universal for everyone because day care is way too expensive for families with two working parents. This is piling intervention on intervention. Two parents are typically working because inflation wrecked household income and taxes rob wage earners. It was the government itself that made this model a requirement for rising living standards. That of course leads to the problem of caring for children.
And child care is indeed ridiculously expensive. And it’s awful and crazy that it should be. Providing day care on a profitable basis is a profession that countless numbers of people could do, if only the regulations weren’t so absurdly strict. This whole industry, if deregulated, would be a wonderful enterprise. There really is no excuse for why child care opportunities wouldn’t exist within a few minutes drive of every house in the U.S. It’s hard to imagine a better at-home business model.
Why isn’t this the case? Why is there such a shortage?
What Obama didn’t mention is that childcare is one of the most regulated industries in the country. The regulatory structures began during the Great Society and intensified as the welfare state grew. Today it is very difficult to get over the regulatory barriers to become a provider. You can’t do it from your home unless you are willing to enter into the gray/black market and accept cash only for your business. There are zoning laws that prevent residential areas from serving as business locations.
Beyond that, the piles of regulations extend from the central government to state governments to local governments, coast to coast. It’s a wonder any of them stay in business. As a matter of fact, these regulations — which are lobbied for by the biggest providers — have cartelized the industry in ways that would be otherwise unattainable through purely market means.
There is a book-length set of regulations at the federal level. All workers are required to receive health and safety training in specific areas. The feds mandate adherence to all building, fire, and health codes. All workers have to get comprehensive background checks, including fingerprinting. There are strict and complex rules about workers per child. And everyone has to agree to constant and random monitoring by bureaucrats from many agencies. Finally, there are all the rules concerning immigration, tax withholding, minimum wages, maximum working hours, health benefits, and vacation times. All of these regulations have become far worse under the Obama administration — all in the name of helping children.
And that’s at the federal level. States impose a slew of other regulations that govern the size of playgrounds, the kind of equipment they can have, the depth of the mulch underneath the play equipment, the kinds of medical services for emergencies that have to be on hand, insurance mandates that go way beyond what insurers themselves require, and so much more. The regulations grow more intense as the number of children in the program expand, so that all providers are essentially punished for being successful.
Just as a sample, check out Pennsylvania’s regulations here. Ask yourself if you would ever become a provider under these conditions.
A couple of years ago, I saw some workers digging around a playground at a local daycare and I made an inquiry. It turned out that the daycare, just to stay in business, had to completely reformat its drains, dig new ones, reshape the yard, change the kind of mulch they used, spread out the climbing toys, and add some more foam here and there. I can’t even imagine how much they were paid to do all this, and how much the changes cost overall. And this was for a well-established, large daycare in a commercial district that was already in compliance.
What this industry needs is not subsidies but massive, dramatic, and immediate deregulation at all levels. Prices would fall dramatically. New options would be available for everyone. What is now a problem would vanish in a matter of weeks. It’s a guaranteed solution to a very real problem.
The current system is a problem for everyone but it disproportionately affects women. It is truly an issue for genuine feminists who care about real freedom. The regulatory state as it stands is attacking their rights to produce and consume a service that is important to women and absolutely affects their lives in every way. In the 19th century, these kinds of rules were considered to be a form of subjugation of women. Now we call it the welfare state.
By the way, I’m unaware of a single political movement anywhere in the United States that has taken up this issue.