When people ask me how I balance life as a new mother and a startup co-founder, I tell them about Ester: As caregiver for my 17-month-old daughter, Charlotte, she represents a major investment in my family’s future; in my ability to earn and build a career; in the economic futures of the employees I hire; and even in my daughter’s eventual level of educational and professional attainment.
Ester minds Charlotte while I’m on conference calls, takes her to the park, and brings her back so I can see her for lunch. This arrangement makes my career work just as well as my husband’s does in terms of integrating professional and family life. And every dollar I pay Ester today means I’ll earn two dollars in the future because she’s enabling my career.
It’s hard to think of childcare as an investment, however, when it’s an overwhelming expense for most families and entirely out of reach for many. According to a Pew Census data analysis, families with working mothers spent 70 percent more on childcare in 2011 than in 1985. And the Center for American Progress cites that in most states the annual cost of child care for an infant in a child-care center is actually higher than a year’s tuition at the average four-year public college.
At PowerToFly, the platform I cofounded that matches women with jobs they can do from anywhere, we recently surveyed thousands of our members to understand their childcare situations and proposed solutions. A few of the women told us that the high costs of childcare actually held them back from having another child—or prevented them from starting a family in the first place. And 37 percent said that relying on family was the only way they could make it work. We found:
• 83 percent of respondents have paid for some form of childcare in the past year
• Of those who rely on family, 45 percent said they do so because of cost
• 38 percent said 25-50 percent of their salary goes to childcare, 10 percent pay more than half of their salary to cover childcare
• 76 percent said both adults in their household work
• 85 percent said childcare was important because it allowed them to work
So what’s the solution? For starters, let’s stop taxing caregivers as regular employees. Here’s an example of how the current tax system makes childcare more prohibitive—with or without a government credit. Let’s take Cindy who lives in California and makes $60,000 a year at her job. Her take home pay after federal and state taxes is about $44,000. Cindy is a single mom of a son and wants to hire Rosy as a full-time nanny so she can work longer hours to get the promotion that would raise her salary significantly.
Rosy will cost Cindy $40,000 a year while Cindy is out of the house, pulling late hours and early commutes to create a better future for her son. If Cindy were to hire Rosy, she’d owe the government about $5,000 in employer taxes on top of Rosy’s $40,000 salary. At the end of the day, Cindy is left with a negative balance of $1K after she pays taxes and Rosy. The system is set up so that it doesn’t even make sense for Cindy to take a salary. She’d have $4,000 left over if she asked her employer to put Rosy on the payroll instead of her!
The logical answer to Cindy’s problems is to make more money or send her son to cheaper options like daycare. But if she can’t have Rosy watch her kid around her fluctuating work schedule then she can’t put in the extra hours required for a promotion and her earning potential peaks at $60,000. Under the current system, the cost of full time childcare, and the inherent taxes, make it prohibitive for many women to invest in their careers and ultimately make the money that would enable them to comfortably pay for that childcare in the future.
Another solution to consider is setting up care funds, as we do college funds. We already invest in our children’s futures with tax- deductible gifts or by locking in the price of tuition with vehicles like the Independent 529 Plan.
However we pay for childcare, remote work eases the burden by cutting commute times and allowing mothers to work when and where they’re most productive. Women desperately want this option, as we learned in our survey. As one woman put it: “I want better options than just sending my kids to daycare for five long days a week. I want the income to provide my kids with in-home care at least part of the time. And I want a job that allows me the flexibility to schedule my work around my family obligations with the understanding that the quality of my work should not be compromised.” —S.D. from Oregon
Imagine the positive change we could effect if some combination of these solutions allowed more mothers to afford childcare. Women and children are worth the investment, and the returns could be profound. According to a recent Harvard research study, “children whose mothers worked … tended to be high achievers in school and have less depression and anxiety.” What’s more, “daughters of working mothers earned 23 percent more than daughters of stay-at-home mothers, completed more years of education, were more likely to be employed and in supervisory roles and earned higher incomes.”
As a country, we have an obligation to rethink care: Rather than as an expense, it should be viewed as an investment in women’s future careers and, indeed, in society itself.