Elizabeth Warren is “hopeful” that the federal government is ready to make big investments to fix the problem of rising child care costs, which are now higher than the average cost of living for a family with two kids in the United States.
In an interview with personal finance expert Tori Dunlap that came out on Wednesday, Warren, a U.S. senator from Massachusetts, said that people are “changing their minds” about the need for more government funding to make child care more affordable because of how expensive things are now.
Dunlap, who wrote the book “Financial Feminist: Overcome the Patriarchy’s Bullsh*t to Master Your Money and Build a Life You Love” in 2022, talked to Warren on her show “Financial Feminist.”
“After decades of underinvestment,” Warren told Dunlap, the Biden administration is putting billions of dollars into new infrastructure projects like roads, bridges, and internet. She also said that these investments “make us all richer” and let more people take part in the economy.
Warren said that child care is like infrastructure because it helps parents work, which will have a positive effect on the business. Warren said that budget cuts in child care, housing, and health care help build a “robust economy” that “creates wealth for working families,” “creates wealth in the middle,” and “creates more opportunity for people who may be poor today.”
A new study by KPMG looked at how access to child care affects worker productivity. It found that lost work hours due to problems with child care “result in lower pay for workers, stressing family budgets.” People who work can lose tens of thousands of dollars a year because of these losses. The study says this “severely strains households that have spent down savings and are still facing elevated price levels.” If someone who makes $15 an hour missed six hours of work every week, they would lose $4,680 over the course of a year.
Warren talked about the upcoming election for president on November 5 and said, “If we get that trifecta—Democratic nominee Kamala Harris in the White House, Democratic control of the House and Senate—we have a real chance to do not just a little bit on child care, but really make sure that no one in America spends more than 7% of their income on child care, no matter how many babies they have, what their income is, or where they live—if they live in a high-cost area.” It will not go over 7% of your income, and the federal government will pay the rest. We also raise the pay of our child care workers.
Harris has said that child care costs should not be more than 7% of a family’s income while she was running for president. Donald Trump, the Republican nominee, hasn’t come up with a specific plan for child care, but his running mate, Ohio Sen. J.D. Vance, said he would support public funding for child care that isn’t in a center, like in churches or informal parent groups in neighborhoods.
Warren told Dunlap that she wanted to write about personal finance issues like child care costs because she believes that “families, people, and individuals do the best they can, given the set of rules out there, to try to build security for themselves.” But the rules are also important, and if they are stacked against you, it’s a lot harder to win.
