You are correct, in most cases, the number of people providing paid daycare is less than the number of people providing stay-at-home daycare. You try to estimate the ratio based on staff ratios. I tried to do it based on the final cost. If the average cost is $1,320/mo for infants, I can divide that by average hourly labor costs and I get a rough estimate of how much labor it takes to provide center-based daycare. That number is “all in”, it includes some allowance for the people who built and maintain the building, for example.
Or, simply compare the $1,320/mo to the monthly earnings of the parents who can now work, and I get the “market estimate of productivity” ratio of paid childcare to parent childcare. It varies depending on the parent’s wages. But, when the ratio gets big, the parents don’t need the other taxpayers to step in to pay for childcare, the parents have high enough wages to pay for it themselves.
Then there is the question of who captures the benefits of that higher GDP.
AL state law requires schools to provide kindergarten with same schedule as elementary school, so full day. It is free. There is also a general Pre-K program that is expanding that is free as well. Some special needs programs for age 3-5 (free to special needs students) also include spaces for typical peer students, who go for free.
This is interesting. Proponents of UBI claim that we have reached a time in history where AI enabled machines can replace most human workers and we have a surplus of workers, especially workers without computer talent.
we have effectively onboarded Chinese, Indian, and South American workers into the world economy. That had a 20ish year impact on wage suppression and inflation suppression.
I agree with this.
the oldest generations in the first world are the largest generations and the working generations are the smallest. This trend will hit China and India about 20 years after us but the birthrate trends are already starting.
I think China is ahead of us, due to the one-child policy.
Assuming wages are a measure of supply/demand ratios for certain skill sets, the big wage inequality in the US suggests a big variation in supply/demand.
Taxpayer provided childcare is a net gain for low income parents who will receive benefits that exceed their extra taxes, and a net loss for high income parents and non-parents who will get benefits that are less than their additional taxes.
Part of me says that’s a fine income transfer program. Part of me says that it encourages low skilled workers to try to find jobs in an economy where wage signals tell us we have “too many” low skilled workers looking for jobs.
Proponents of UBI are just as wrong about workers being replaced by technology as every single person that has claimed this throughout history. Technology increases the amount of work any 1 person can do. It may push people out of an industry because each worker in the industry becomes so productive they can meet the demands of the economy (see farming). Workers have throughout history just found more things to do. In the present we are creating more and more industries that exist to entertain people. 100 years ago golf and boxing were the only professional sports, TV did not exist, and the computer had not even been imagined. Today there are billions and billions of $'s being spent on TV, Film, Sports, video games, music, concerts, etc, etc, etc. If someone told you 100 years ago that bars would exist where people drink and throw axes they would have called you an idiot, but here we are. Healthy economies always allow people to work for money that they can use to spend on stuff.
Nitpick: Professional baseball has existed since the Cincinnati Red Stockings (now the Cincinnati Reds) became a going concern in 1869. If you’re old like me you remember when Opening Day was reserved specifically for the Cincinnati Reds to play a home game (only game played on Opening Day) to honor the fact that they were the world’s first professional baseball team. MLB no longer gives a shit about honoring this tradition so if you’re young you could be forgiven for not knowing this.
Similar to how Greece always goes first during the parade of nations at the Olympics Opening Ceremony. Except, AFAIK, they still honor that tradition. (Unless Greece is the host country when the tradition of having the host country go last trumps the tradition of having Greece go first.)
But I certainly agree that the entertainment industry accounts for a much larger share of GDP today than it did 100 years ago, which was your main point.
Even though pro ball existed more than 150 years ago, the players made diddly squat and had to supplement their incomes with “real” jobs during the off season. Now league minimum is many multiples of the national average wage and elite athletes are among the wealthiest Americans which never used to be true.
There was a really good Econtalk podcast a couple of years ago about what the author being interviewed called the “Intensity Of Leisure” increasing over time. Basically making the case that as technology got better and better the quantity and quality of time spent in leisure activities is increasing pretty dramatically for humanity.
I tend to agree with you on this point. Technology means we can make more stuff per hour of human labor, but so far we’ve just decided that we “need” more stuff.
I am concerned about increasing income inequality. It seems that people who can leverage their labor with tech savvy are separating themselves from people who compete against machines.
Regarding taxpayer funded childcare –
If MDs want to have children and not stay home with them, they can do that without gov’t support. In fact, the extra taxes they will pay to support gov’t paid childcare probably exceed the direct cost of childcare for their own children.
At the other end of the spectrum, the parent who can only find a minimum wage job needs gov’t subsidized childcare to work outside the home, but the wages that person will earn are hardly more than the all-in cost of childcare. Is that a gain for anybody other than that parent?
There may be a sweet spot somewhere in between where people “need free childcare” to work, but there is a net contribution that somehow gets shared with the rest of us. I’m not convinced it is large enough to justify the program on that basis.
(again, there may be other ways to justify taxpayer provided childcare)
Socialization of the kids, eyes other than the parents on them, actually investing in the training of professionals to work with kids and then having people with early development skills and knowledge spending time with the kids rather than only mom or dad are all benefits apart from just letting minimum wage parent work without all their funds going to daycare.
They were suspended from the National League in the lead-up to Prohibition for violating an NL rule banning the sale of beer at games. Cincinnati being a good German town insisted on selling beer at the ballpark anyway, in defiance of league rules and the team was suspended from the league for a time.
So I’m not sure how that suspension plays into “continuously operating” but at a minimum it gives grounds for the second oldest to make a claim at the title. I guess if the team continued to pay the players then they remained a professional baseball team.
I’m also not sure how long the suspension was. I mostly just think it’s hilarious that it happened at all and logical that it occurred in Cincinnati as opposed to some other city.
But maybe a different way to think about it is: to what degree will capital use this new technology to optimize in a way that gives it an advantage over labor, and to what degree will they succeed?
I think there exist segments of society where the combination of social programs aimed at helping children mean that people are better off having a child than not.
There are certainly lots of cases where parents are better of remaining unmarried than marrying.
Look at an unmarried person making $12 an hour at a full time job ($24,000 a year) who contributes 10% to a traditional 401k and doesn’t take employer health insurance. I don’t have time to do the analysis myself, but compare the following with 1 child vs 0 children.
Things to check:
-Income taxes, including EITC, Child Tax Credit, Savers Credit (taxable income is $21,600)
-Eligibility for Medicaid / PTC and cost of health insurance
-Eligibility for Section 8 housing
-Eligibility for TANF, SNAP, and WIC
-Eligibility for Head Start and other childcare programs
-Reasonable out of pocket costs for food, clothing, toys, additional housing cost (ie two-bedroom apartment minus one-bedroom apartment)
There’s probably some other costs and social programs I’m forgetting. But I suspect that when you add it all up, this person is better off financially with the kid than without. Which incentivizes having the kid.
This person is not rich, by any means. But I suspect they are less poor with the kid than without.
I don’t find that plausible, but I admit I don’t have a good intuition for it.
Even if it is true, that’s only the financial side of things. As I’m sure you know, there are enormous costs (and benefits) of having kids that are not financial. If you make a little bit of money, i don’t think it comes close to equaling the non financial costs.
But I think more generally that the only time people look at the financial side of things is when they are worried about being able to afford kids they already want.
To have children because it will make you money seems rather monstrous. I guess you occasionally hear about couples doing this with foster kids. And if you are going to be monstrous that’s probably the easier way to do it.
I don’t know anybody who I think would have kids to make money. So even if it creates an incentive for a theoretical economic actor, I don’t think it does for a real person.
Well at a minimum, I think there is a subset where there is no financial disincentive to have kids because taxpayers pick up close to or even more than 100% of the cost of having kids.
You’re right that there are non-financial costs of having kids. Especially if you are a good parent.
The extent to which people think about all of this is not obvious. One would hope they are having kids because they want them and not because “eh, why not”.
There are certainly stories of “welfare queens” who are quite versed in all of the programs available and how to extract maximum value.
And pre-PPACA I think having a kid was a good way to qualify for Medicaid. I think that’s less of an incentive now, but when pre-existing conditions were excludable I think it was more significant.
I’d say that, for a single worker, the biggest marginal expense of children is childcare during working hours. Hence this thread.
There is a dependent care credit in current income tax law, but I don’t get it ($3,000/yr ? or $8,000/yr ?).
Can I put together enough gov’t programs to actually cover the $15,000 annual cost for an infant? Or will I come up many thousands short?
A couple costs you didn’t mention –
transportation, particularly if I don’t already have a car
time away from work for doctor’s appointments and sick kid care
Note that medical care for the child is also an incremental cost. In my state, CHIP seems to cover that.
I think it’s back to “If I’m a low income worker, and I want a child anyway, gov’t programs probably cover my marginal costs, if I can figure out care while I’m working. If I don’t want a child, the gov’t isn’t generous enough to pay me for putting up with a kid.”
How many people have you met that would have kids for money? I haven’t met any, I don’t think. I definitely know, or know of, people who have kids for the wrong reasons, but not that particular wrong reason.
As for the stories: I’ve heard some anecdotal stories that tend to strike me as political propaganda, but haven’t really seen any data. I did read a story about the “welfare queen” reagan referenced. She was a psychopath who would have been a terror at any income level, as i recall.
Certainly people can take advantage of incentives. But this isn’t avoiding a new job for unemployment benefits.