How to save child care? The rural electrification of America provides an answer

Child care in America deserves a financial bailout. Without childcare, the nation can’t get back to work, schools can’t open again, and too many essential workers will be out of luck.

Sens. Joni Ernst (R-Iowa) and Kelly Loeffler (R-Ga.) offered a resolution on May 21 calling for the next pandemic related stimulus to include $25 billion of child care. On June 3 Sen. Patty Murray (D-Wash.) introduced the Child Care is Essential Act worth $50 billion to rescue the child-care industry and Rep. Katherine Clark’s (D-Mass.) Child Care is Infrastructure Act introduced in mid-June proposed $10 billion to improve childcare facilities. Taken together these signal strong bipartisan, bicameral support to provide major help for America’s child-care providers.

The COVID-19 pandemic has underscored our reliance on care workers and demonstrated the fragility of the childcare industry. Industry leaders predict that the pandemic might lead to the permanent loss of up to 4.5 million child care slots. A pandemic-induced bailout is just the first step to building a childcare system that our children need. More must be done once the industry is stabilized.

The New Deal orchestrated by President Franklin D. Roosevelt in the dark days of the Great Depression offers us one example for how we might build a stronger childcare system for the future.

The Rural Electrification Administration (REA) might be the best model for a major New Deal-style investment in our critical childcare industry. That’s because there’s a missing piece of the childcare puzzle that’s rarely talked about: in addition to the inability of many parents to pay for high-quality childcare, we also have a massive childcare infrastructure deficit.

Prior to the 1930s, the scattered population of rural America largely lacked access to electricity. The high cost of building the required infrastructure deterred most companies from investing in the electrification of rural America. Rural America was left in the dark and denied the economic benefits that came with electricity. This market failure was only heightened by the onset of the Great Depression in 1929.

On May 11, 1935, President Roosevelt signed an executive order to create the REA. Then in the Rural Electrification Act of 1936, Congress codified the work of the REA and appropriated $410 million for a decade-long program to electrify rural America.

The REA brought electricity to rural America. It made loans for large-scale infrastructure such as power plants and lines, and connected houses and farms to them. This is the origin of many rural electric cooperatives, now a standard part of rural America.

A similar large-scale national investment is needed in our childcare infrastructure. The U.S. Department of Health and Human Services’ inspector general found in a series of surveys in 2013 and 2014 that 96 percent of child-care programs in 10 states had a potentially hazardous condition such as broken or unlocked gates, water damage, knives accessible to children and exposed nails on the playground. And in many communities, a lack of available facilities prevents high-quality programs from the opportunity to expand.

A program along the lines of the Rural Electrification Administration could accomplish several things at once. First, it would create a massive, badly needed childcare infrastructure that, like electricity, is essential for economic development for communities and economic mobility for individuals.

The government would direct funds to some of the nation’s neediest areas and create a path to ownership of those assets by communities that need them. These child-care assets could be cooperatively governed and owned by the childcare workers, the families who participate in the childcare (just like consumer-owned electric cooperative operate), or some combination of the two.

The federal government would provide initial funding through forgivable loans, but local communities or workers would own these centers. If a childcare cooperative made a profit after paying its workers a living wage, excess revenues could be distributed to the member-owners.

The approach could help deliver high-quality, smartly regulated services to children and families, expand economic democracy, build assets in neighborhoods and communities often distant from opportunity, and, like the REA, put people to work building the next generation of America’s infrastructure.

A bailout is a necessary step to stabilize the childcare industry, but it will not sustain its future. The interlocking racial crisis, pandemic, and current economic devastation demand a new New Deal, not only to provide relief but to rebuild our country. The childcare industry– and the young children who are in its care and are our future–is the best place to start.

Joe Waters is co-founder and CEO of Capita, a nonpartisan ideas lab working to positively change the future for children and families.