April 26, 2022

At Hearing, Warren Calls for Investments in High-Quality, Affordable Universal Child Care to Expand Workforce and Fight Inflation

Washington, D.C. – Today, chairing a hearing of the Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy, Senator Elizabeth Warren (D-Mass.) delivered remarks about the importance of investing in high-quality and affordable child care, which would help get millions of parents back into the workforce – driving productivity, putting downward pressure on prices, and fighting inflation.

Senator Warren argued that the lack of affordable, high-quality child care is holding back the economy. Many parents can’t get back to work without access to child care, but child care providers cannot afford to raise wages to hire the workers they need.

Senator Warren called for the passage of Congressional Democrats’ child care proposal, which would give child care providers the resources to hire more workers and invests in direct assistance to families so that they can afford child care.

Transcript: Child Care and Other Policy Tools to Combat Bottlenecks and Inflation
U.S. Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Economic Policy
Remarks from U.S. Senator Elizabeth Warren
Tuesday, April 26, 2022

Senator Elizbeth Warren: This hearing will come to order.

Good afternoon, and welcome to today’s hearing on “Child Care and Other Policy Tools to Combat Bottlenecks and Inflation.”

Now, we’ve heard a lot about inflation over the last six months, and rightfully so. When prices go up – whether it is because of corporate price gouging, or because of pandemic-related disruptions in the supply chain, it hurts hard-working American families.

We need to get inflation under control – and we need to do it in the smartest way possible. Too many analysts seem to think there’s only one tool in the toolbox: urging the Fed to drive the economy into a recession by increasing interest rates.

We need to think smarter, and that starts with diagnosing some of what’s gone wrong. The pandemic wrought havoc on supply chains for food, cars, appliances – all kinds of goods. And Russia’s invasion of Ukraine disrupted oil and gas markets. Meanwhile, giant companies have figured out that they can pad their profit margins by using inflation as a cover to raise prices more than justified – making the whole economy worse off in the process.

So, what can we do?

Well first, we should do everything we can to promote competition, to break up monopolies, and to end the opportunities for corporate profiteering to drive up prices. The administration has been acting quickly, and they have my full support on this.

Next, we need to increase supply – across the board. We need to fix supply chains and bring more production home. We also need to invest in green technologies so that Americans are not held hostage to the whims of oil-rich dictators.

All those are good steps, but there’s another piece of the puzzle that we should focus on. We can bring down inflation if we increase our labor supply. More workers, earning a fair wage with good benefits, means more productivity and that means more downward pressure on prices.

As we return to many of the activities we enjoyed before the pandemic started, Americans are once again eating out, going to the movies, and traveling – and businesses are looking to hire. Those businesses need servers and line cooks, they need retail clerks, hotel staff, barbers, bus drivers, you name it. Factories that are trying to run full shifts—or even a second shift—need workers. The transportation industry, including drivers, schedulers, and planners, needs workers. Small businesses—from insurance agencies to lawn care outfits—need workers. And across the board, a tight labor market will mean prices stay higher longer.

And that’s where child care comes in. One of the biggest barriers that is holding back the economy right now is that workers who want to rejoin the workforce – who want to respond to a help-wanted ad or want to show up for a shift – can’t do so if they don’t have child care. A Census Bureau study released last year found that one in five working parents left the workforce or reduced their hours solely due to child care. And one in four women who became unemployed during the pandemic said the reason was a lack of child care.

Now some economists are worried that inflation could become a longer-term problem and actually increase in parts of the economy experiencing these worker shortages, especially if we don’t get more people into the labor force. But to get people into the workforce, working parents need child care, and we’re still about117,000 child care workers short compared to our pre-pandemic levels.

Child care providers want to hire more staff so they can offer more slots to families, and get things back to normal – but they can’t. Most child care providers couldn’t afford to pay as much as the gas station down the street paid before the pandemic, and it’s even harder now. And when they can’t hire enough child care workers, they can’t add more slots, and that means they can’t serve more kids and families.

So that means that parents can’t go back to work. And that makes it harder for businesses like restaurants, and cleaning services, and car repair outfits to find enough workers to meet demand. And that contributes to higher prices for consumers.

Fixing this problem will provide jobs for millions of Americans, especially women. It will help small businesses and unlock economic growth. And it will cut inflation, both short term and the long term. It is a win-win-win-win situation.

That’s why I’m fighting to pass a legislative package that includes the investments that we need to improve and expand the availability of child care. The proposal that the Congressional Democrats have developed will provide much-needed help for child care providers, allowing them to hire more workers and to offer high quality care to more families. It will provide direct assistance to families for child care, making one families’ biggest expenses more affordable.

Universal child care is pro-family and pro-business. This proposal would help cut inflation by allowing millions of Americans to return to work.

So, I very much appreciate our witnesses joining us today to discuss America’s child care crisis, and how we can bring down costs for American families.

So next, I will turn to the Ranking Member, Senator Kennedy, for your opening remarks.

###

Next Article Previous Article