Child-care workers quitting, a red flag for the economy | Hacker News Reader

Child-care workers quitting, a red flag for the economy

washingtonpost.com

37 pointspg_123453 comments

Same drivel different business category, if you want workers you raise wages, whining about not being able to attract workers but not doing anything to attract workers is useless news.

This isn't the same drivel though. This article isn't about an industry complaining about not being able to attract workers, it is explicitly about how the wages are not high enough to attract and retain workers.

The article is input from a worker which states pay is crap and a company which states they can't find anyone and offer $12/hr, this is very much a problem with the business

US economy is so crappy sometimes.

Eating out is so expensive. Servers can't live off their wages. The restaurants are not profitable.

Where the hell does the money go? Why is a restaurant business not viable?

To the landlords, mostly.

Landlords, suppliers, architects, engineers, municipalities.

Also keep in mind that 'profit' needs to not only cover COGS and other variable costs like labour, it also needs to cover random fixed expenses, utilities, rent and needs to make up the initial capital costs within the duration of the lease.

I think of the US economy as being saddled with a vast amount of 'private taxes'. The cost of everything entails paying rentiers without anything in return.

The building my company rented was sold. According to our broker the new landlords mortgage had terms that required he raise the rents to cover the mortgage payment. So new landlord told us that after our lease expired the rent was going from $2/sqft to $4/sqft. Where is the value added for us paying double what we were? There isn't any. And the US economy is full of purely extractive rents like that.

Real estate loans, something like 5-6 cents on the dollar actually goes to new construction or improvements.

North America was the land of the free precisely because there was no preexisting social structure that inserted itself between the work you do and the compensation that you receive.

Now that a few hundred years have passed the usual problems crop up.

I personally have no axe to grind versus landlords specifically because I recognize that letting people rent out apartments and thereby provide housing fulfills a real need that people have. After all someone had to construct the building.

What I personally despise is when people own a plot of land and abuse its location monopoly to extort people's money. I work and pay income taxes which funds public infrastructure yet I also need to pay the owner of the land a sum in proportion to the public infrastructure that is available to this location. If the government were to charge this amount directly on the land and reduce my income tax by that same amount then I would have no qualms about paying inflated rents because I know that a fair portion of that money is paying for the infrastructure I get to enjoy.

Theoretically the value is being enjoyed by the people moving near you who cared so much about their location that they drove up prices.

In practice I’m less sure. Regardless, it’s a process that sucks for those already living there. Location/land/home stability are hard values to stamp out of humans.

Also, it does not take into account that most people want to live in a place where they belong to a community (usually one they are familiar with).

People do not stay in a place purely for economic reasons. Things like being around family, friends and a community is a reason not to move for a lot of people. Sadly, this is something which is hardly taken into account when discussing housing policy.

Agreed. Sadly, we will probably never learn to 'price' individual and collective preferences over multi-generational time spans.

The restaurants are not profitable? I see successful restaurants often opening a 2nd location elsewhere in the city. Then a third.

Many or not however. Probably in part because a lot of small businesses are not good businesses.

Personally though and this may be an unpopular opinion but eating out even at cheaper restaurants is largely a luxury compared to eating at home. Certainly not in the same category as childcare when parent(s) are working.

I've been told opening multiple locations is the most feasible way to be profitable so you can amortize many costs and get better deals ordering in bulk. Restaurants are also a notoriously tough business with thin margins.

I have considered that issues is not money going somewhere. It is that it doesn't come from anywhere. Service economy works when you can extract money from somewhere. But service economy itself doesn't produce much of net goods. Food, housing, cloths, medicine, goods in general need to be made somewhere. You can't just live on cooking and serving food or financial services of moving money around, if someone somewhere doesn't do something actually productive.

The service economy is about specialization. You let someone else cook because that person is a better or cheaper cook. You then get to do your own job instead of cooking for yourself. Electricians don't manufacture wires yet they provide more "value" than the wire manufacturer to me because I don't know how to utilize the wires myself.

In a nutshell: you can live off IOUs when those IOUs are needed to buy oil!

People remember Nixon for Watergate, but his legacy is really the Petrodollar Recycling

I would agree with your statement to a point, but i would like to add something.

vast area's of the service economy are very useful and actually do provide value. But the financing of the economy in modern times is totally out of whack, resulting in firms focusing on financial engineering to extract profit instead of providing goods/services to society.

Things like hedge funds, vast consultancy companies who prop up these measures are also the ones extracting vasts amounts of wealth from the productive side of the economy without contributing anything besides driving up costs and increasing inefficiency.

And I think tech should share fair share of the blame. How much value does all the advertising bring to society? Ofc, there is some needed, but could it be that we are vastly beyond that point.

And then we have the platforms like gig economy, that aim to extract vast cuts of any activity they are in. At least compared to true value they provide.

the gig economy is even weirder when you think about it. Uber has not been very successful (in my country) because it doesn't provide anything over the normal taxi services besides an application (that already existed in some form before they entered the market).

Uber can however, undercut normal taxi's because it has vast sums of cheap money available. This is thanks to financial engineering. Thus it is able to undercut the local economy without providing anything of value.

While it is not happening in this example, Uber could easily destroy parts of the economy because it can undercut the local economy. (Amazon famously tries to do this in a lot of countries aswell).

The server stuff is a bit nonsense. Waitstaff in big cities make good wages, $50K+.

Child care generally comes with a lot of regulation in developed countries. One such regulation being “one caregiver per n children”. If n is too large, the quality of care is poor, and if n is too small, the cost of care per child is too high. Developed countries tend to keep n small, thus the cost is untenable for many low/middle class families.

Here’s a question: how do you solve this problem without the government subsidizing child care costs?

Raise prices or increase n, it’s zero sum

If you need childcare but can’t afford it…why are you having kids?

You should ask the opposite. If you have kids and are low class why are you buying child care? Shouldn't it be cheaper to take care of the child yourself instead of paying income tax to let someone else, who also pays income tax and may be gets paid more than you, do it?

I mean the point of childcare is that the carer gets to specialize and the workers who do not have to do childcare get to specialize. If there are people who end up worse off after specialization then something is seriously broken.

How will they make money to live then?

Because you’re a single mother, and must at least attempt to work full time.

Our society to single mothers with poor career prospects: get a job, you mooch! We don’t care that it won’t pay enough for decent childcare and your other basic living expenses.

Our society to married mothers with poor-to-mediocre job prospects and husbands earning non-professional wages: stay home with your kids. Think about going back to school part time to finish that degree that might or might not pay back your loans. Oooh, have you heard about this great new company that helps young moms like you build their own businesses selling awesome cosmetics/supplements/leggings? You can do it from home!

Our society to married mothers with well-earning husbands and careers they love and would like to continue part time while their kids are small: since you can’t really be serious about your work if you don’t have to do it full time, you can forget your real career and go be a glorified administrative assistant for awhile, and possibly till you retire.

Or, there’s what Germany and similar do. I pay about 400 EUR/mo for 7:00-16:00 daycare, and my employer has to allow me to work a job with similar qualifications as the one I was hired for with a 15-30 hr/wk schedule (my choice) until my kid is 3. At that point, they are obligated to allow me to work part time permanently, or for me to switch back to my original contracted hours. My employer chooses to allow us to work part time longer and still switch back to full time later.

Did I pay an absolute fortune in higher income tax the decade before I had a kid, and could have paid for my own maternity leave and unsubsidized daycare with the money I could have saved? Quite likely.

Do I feel like it’s still worth it? Absolutely. A year of maternity leave and several years of serious part time work is so common and accepted here in large part because it’s affordable to people who make less and pay less in taxes (or who would save less even at higher income).

Seeing the daycare vs work outside the home decision as only a function of immediate daycare costs vs. current earnings is extremely short-sighted. A college friend of mine freely admitted that they barely broke even on daycare for two in Boston the year after she had her second, but that in preserving her future earning power, it made long-term financial sense (and personal sense - she loves her work).

That's exactly what they do (even middle class people) The problems start when they can't afford to live on one salary.

That's a really good question. But there are many cases where the unanticipated costs of things non-kids, such as housing, have escalated rapidly enough during that 5 years your child could use child care. As you were planning your pregnancy and the next 5 years, the circumstances around you shift sufficiently that you NEED that second job, or second income, or third job, or whatever it is, just to afford housing or power.

For example, in my regional part of Australia, rent has gone up 30% in the past 18 months. If my kids were 0-5 instead of 11-14, I'd be panicking a little, because child care is expensive and hard to find.

On a basic level, you don't know what someone's material circumstance is when they A) decided to have kids vs B) any future time when they might need childcare. Life situations change and it's very much in society's best interest that we care for most vulnerable, like kids, no matter how rich or poor their parents are.

Yes, agreed when circumstances change. What about when circumstances were never going to work to begin with? That is where my curiosity lies, where people are setting themselves up to fail, never able to cover the costs they’re locking themselves into.

The NYT has a calculator where you can model if you can afford a house. I’ve never seen a similar calculator for children, anywhere.

I’m sure the price is a surprise to plenty of people. I knew childcare was expensive but I didn’t know how much until I actually looked for a provider.

Raise middle class disposable income?

That may count as subsidizing childcare with extra steps.

The sad or horrific reality of many necessary aspects of life like health care, child care and education is that they are simply inefficient. And there really aren't solutions for them. You always need certain number of people to manage small number of patients, kids or pupils.

And there won't be any huge productivity boosts unless we somehow reach full automation, which I doubt won't happen at all...

In the end even with government subsidies these sectors really can't be high paying outside small number of specialist. And governments probably must subsidise them to improve productivity elsewhere.

The biggest inefficiency is that a child care facility occupies real estate that parent care does not.

Maybe they need to vary prices based on the "n"?

Obviously n cannot be too large, but there is likely some still reasonable upper range that would significantly reduce costs without harming kids. Then parents who have enough money could pay more for better care. But surely even a large n is better than no child care.

I realize that there are likely regulations against that today, but that's really one of the underlying problems that could be fixed.

> without the government subsidizing child care costs

Why not though?

They'll be tax payers soon and I'm sure we'd get more of them if we made it easier to rear them.

There's probably a lot of subsidies that are currently in place that make less sense.

Lower class (financially) people tend to have kids that grow in to more lower class people. The bottom ~50% don’t pay taxes.

Brutal logic even if true. “This newborn is unlikely to become economically valuable enough to worth caring for now.”

This is just the pro-choice position for having an abortion because having a child would be fiscally inconvenient.

~50% of children born into poverty remain in poverty for at least half their lives.

https://www.urban.org/research/publication/childhood-poverty...

Taxes are probably the wrong way to think about it. More important question is does lower class people produce net positive effect on economy in general. If they do then subsidising them producing enough lower class people to replace ones producing values will likely make sense.

Now if they are net negative, we get in much murkier waters...

Surely you don't mean yearly car registration, driver's license fees, gas taxes at the pump, liquor taxes on booze or any other daily sales taxes they pay. So are you referring to the lack of property taxes they pay? I'm assuming the landlords are paying those.

Federal income tax.

If lots of people wouldn't go to work, salaries for all the other jobs would eventually go up and families could survive on one salary

State schools should be from 3-12 years of age, instead of 6-18. And 1 parent should get median salary from the state for raising children from 0-3 years of age.

What do you do with the kid after 12?

Tell it to get a job or go to college.

After 12, kid is grown up.

In Australia we can tightly control our population growth via immigration so we don't need to encourage people to have kids. Kids are essentially considered a lifestyle choice and it's expected that their parents fund that lifestyle.

As per another comment, I’m unsure why you cut off at 12 years old.

That said, the role of schools in child care is often overlooked for the less economically measurable benefits of education. Without the child care provided by schools, many parents could not afford to work in developed nations. So dropping the age kids can go to school may be worth while.

Another area of school/childcare/education is the long holidays kids get. Malcolm Gladwell’s book, Outliers discusses the spurious origins of long school vacations.

Note, my wife is a high school science teacher and agrees with Gladwell’s hypothesis that long school holidays disadvantage poorer kids.

I'm not disagreeing that worker need higher pay. But this statement:

"the median pay in the industry — $25,460 a year, according to the Labor Department — is below the poverty line for a family of four."

seems really dumb, because almost no family of 4 can get by on a single income these days, let alone on a (low) day-care salary.

That qualification itself is kind of damning.

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