Where They Went & Why They Aren't Coming Back
I’m slightly embarrassed to admit that this blog post came to be as the result of a Tik Tok I watched. 99.99% of everything on Tik Tok is arguably garbage, but I’m in a lane, let’s call it Mom Lane, and it has been eye-opening. Ed and I love to spend our downtime doing economic research, digging deeper than the headlines, asking the weird/stupid questions and just trying to understand the WHY behind where we are as a country, economy, globe, and so on. Our most resent brain bender has been the labor market shortage. While there are some commonly talked about reasons for the shortage such as the great resignation, burnout, and industry/skill mismatch issues, those explanations alone just didn’t sit well with me. The unemployment and stimulus gravy train stopped months ago and yet there are still millions of people missing from the workforce. Other than retirees, we’d assume everyone else would eventually have to go back to work, but we aren’t seeing it. Then one night, while mind-numbingly scrolling the internet, I came across the video. It was a mom holding what appeared to be about a 9-month-old baby, and she answered my question in less than 30 seconds. Moms left the workforce in droves during Covid, and they ain’t comin back!
According to analysis by the Census Bureau, in the spring of 2020 about 3.5 million moms left the workforce. Some were laid off, others left to take care of their young children, some to school their children from home. This number was significantly higher than the number of men to leave the workforce. A piece in Forbes magazine back in July of this year suggested women were disproportionately affected because of the increased workload at home and the lack of work/life balance. My Tik Tok buddy suggested a slightly different reason. Childcare costs.
As a mom, I know first-hand the struggle that comes with childcare. We prayed ceaselessly from the moment we found out about our first son, for a childcare option that we all felt good about. It’s nearly impossible to focus on work if you don’t have the utmost confidence that your child is loved and cared for while you’re away. Fortunately, we were introduced to the most wonderful woman who has loved our children so well over the years. But she was not easy to find, and she did not come cheap.
I’ve talked before about the ever-increasing cost of higher education in this country, but I’ve never touched on the cost of early childcare. According to CNBC, in 2021, the average US family was paying $8,355 PER CHILD annually in childcare costs. Three kids later and you’re looking at over $25,000 in childcare. Ouch! Keep in mind, when we were deep in the midst of lay-offs in 2020, it wasn’t the high-powered business people making $200,000+ that lost their jobs. It was the entry-level to middle management folks, the average workers, the “non-essentials,” the people who were likely barely taking home a paycheck after paying for childcare. And being at home with their children for a few months opened their eyes to it. There were a lot of beautiful things that came from the pandemic, but one of those beautiful things that was probably unintentional on our government’s part (go figure!) was giving people the opportunity to take a step back and truly ask themselves if they were doing what was right for the families? Now, I won’t get lost in the weeds of who should work and who should stay home and all that jazz. I was raised by a stay-at-home mom and am now a business owner. I think there is incredible purpose in both and it’s about blooming where you have been planted. But it is evident in the number of women who have left and have not returned to the workforce that the trade-off wasn’t making sense anymore. That was exactly the situation my Tik Tok inspiration described. She and her husband realized that paying someone else to watch their children so that she could bring home a couple hundred dollars a month just wasn’t worth it. That along with the headache of lay-offs, daycare closures from outbreaks, quarantine times for close contacts, it was a no brainer.
Did our government unintentionally create a generation with mass stay-at-home moms and consequently a huge labor market shortage? It probably isn’t ALL their fault, but they certainly created the perfect environment for it to happen. Again, I’m not saying a stay-at-home mom is a bad thing; I think it’s absolutely incredible and I know there has been much research done on the family and community impact of a stay-at-home parent (not for today’s post). But from a purely labor force, short-term economic and GDP perspective, it’s not great. So, do we let the government fix it? HAVE YOU LEARNED NOTHING?! Of course not! But I do think the private sector can. After all, it is the private sector that is struggling the most as a result of the labor shortage, let’s leave it up to them to resolve their own problem. And I believe there is one easy way to get a large chunk of their female workforce back. Provide incredible inhouse childcare. Make it part of the benefits package for all employees regardless of gender. Give moms and dads the opportunity to provide for their children while still having lunch with their children. Give new moms the ability to continue nursing and bonding with their newborn during their daily breaks. Let parents be an elevator ride away from peaking on their babies to make sure they’re having a good day. By allowing parents to truly have the best of both worlds, employers would have the power to attract some incredible talent that is currently out of their reach.
Like it or not, this pandemic changed the way people prioritize their lives. Whether it was a result of disagreements with how local schools handled the pandemic, excessive time off needs for daycare closures, or just a hard cost/benefit analysis, millions of moms reorganized their lives to do what was best for their families. And short of some major benefit changes provided by employers, I don’t think we will see those women re-enter the workforce anytime soon.
Opinions expressed are those of Molly VanBinsbergen and are not necessarily those of Raymond James. All opinions are as of this 1/3/21 and are subject change without notice.
