Women in the U.S. have been among those hardest hit economically by the Covid-19 pandemic, knocked out of the workforce by the double whammy of a child care crisis and the pandemic recession.
President Joe Biden’s roughly $2 trillion tax and spending bill, which could face a vote in the U.S. House of Representatives this week, looks to address some of the major challenges that have pushed the female labor force participation rate to lows not seen in decades.
The bill, known as the Build Back Better Act, has already undergone changes and will be revised further as it makes its way through Congress. West Virginia Democrat Senator Joe Manchin, a key vote on the bill, and other moderate Democrats have blasted its cost and already signaled potential cuts, including paid family leave.
But should some of the tentpoles of the bill go through, it would represent a huge shift for the economic reality of women. Here are the four proposals that would have the biggest impact:
Federal Paid Parental Leave
The latest version of Biden’s bill would provide four weeks of paid leave to all new parents, which is down from the 12 weeks originally proposed, but still historic for the U.S. — one of just a handful of countries that offers no paid maternity leave at all.
Right now, only 23% of the country’s workers have access to paid family leave through their employers or city and state programs. Instead, millions of parents, most often women, take unpaid time off or cobble together vacation time; many drop out of the workforce altogether, losing out on valuable years of earning potential.
Any length of paid leave will help keep more of them employed. Rutgers University researchers found that those who take paid leave, regardless of how long, are more likely to be working a year after the birth of a child than those who don’t. Meanwhile, women who took just one year off from work had annual earnings 39% lower than those who didn’t.
One report from the U.S. Department of Labor found if the U.S. offered policies similar to places like Canada and Germany, which both support new parents for many months, it could add more than 5 million women to workforce. That would translate into more than $500 billion in additional economy activity each year.
“This an economic policy that would secure and solidify the economic status of women as well as help the country’s economy by creating a more inclusive labor force,” said Vicki Shabo, a senior fellow at think tank New America.
Those in low-paying jobs without benefits like health insurance could benefit most. A 2011 analysis of a paid leave program in California, which at the time offered six weeks of time off at up to 55% of employees’ weekly earnings, showed that those workers reported higher satisfaction with the length of their leave and were more likely to return to the same employer after participating.
Under the current proposal, workers making $290 weekly would receive 90% of their paycheck. Those bringing in $1,192 weekly would get 90% of the first $290 they make, and a percentage, on a sliding scale, of the rest of their salary up to $62,000.
The proposal covers part-time and gig workers, as well as employees at small businesses and those who are self employed.
Still, if passed, the U.S. would fall far behind what other countries offer. Four weeks after giving birth, people still report bleeding, incontinence and trouble walking. Research suggests that six months of parental leave is the “sweet spot” — long enough for babies to get health benefits from breastfeeding and parents being available to take them to doctors appointments, but not so long that it keeps women from advancing at work.
Subsidized Child Care
Lack of access to affordable, quality child care has been a major cause of women leaving their jobs in droves during the pandemic.
A few months into the Covid-19 crisis, household surveys by the U.S. Census Bureau showed that young women were almost three times as likely as men to not be working due to child care demands. And even as schools have opened up, women still haven’t returned to work.
The problem for women is two-fold: Child care is expensive and workers, mostly women, make low wages. In 2017, infant child care could cost as much as $24,000 annually in some places in the U.S. — more than in-state tuition at a public university. The workers, many of whom have some form of higher education, make less than many fast food workers.
Biden’s proposal caps child care costs at no more than 7% of a family’s income for most households. Those earning very little would pay nothing. It would also provide for free preschool for all three and four year-olds. If passed, states would have to make sure care staff are earning wages on par with elementary school teachers with similar credentials. The details would largely be left to individual states to figure out.
Study after study has found that having child care keeps women employed. “Women are more likely to cut back their hours or leave work for care, which interrupts their career progression,” Shabo said. “Increasing access to quality child care allows parents to be full participants in the work force.”
In an analysis of 13,000 households, married women with kids under 12 were up to 10% more likely to work if they lived with 25 miles of their mothers or mothers-in-law, because they could rely on them for help taking care of their kids.
Expanding access to affordable, high-quality child care would increase the number of women with young children working full time by about 17% and lifetime earnings for women by about $94,000, according to an April report from the National Women’s Law Center.
Help With Elder Care
Under the plan, $1.2 billion would be set aside for initiatives that support older Americans, such as home and community-based care services and nutrition programs. Another $150 billion would be set aside to expand access to home care for the elderly and disabled.
Women do a disproportionate amount of caregiving for older and sick family members. In a 2019 AARP survey of about 1,400 unpaid caregivers, the majority of whom were women, 15% said they had to cut back on their working hours. Another 14% said they had to take a leave of absence from work.
Similar to new parents, those caring for elderly relatives or family members with a medical need would also get four weeks of paid leave. The AARP survey found that caregivers who had access to family leave, even unpaid, were more likely to keep working compared to those who didn’t have the benefit. The lack of family or caregiving leave cost 18 to 64 year old women about $1.4 billion in lost wages between 2009 and 2018, the Center for American Progress found.
Extended Child Tax Credit
Build Back Better proposes extending the existing Child Tax Credit, which puts as much as $300 in the bank accounts of families through 2022. The benefit is essentially an advance on the tax refund families earning less than $150,000 annually, would typically get each year.
“It helps families to pay their bills that come up month to month versus a traditional lump sum tax refund that comes once a year,” said, Dylan Bellisle, a postdoctoral research fellow with the Project for Middle Class Renewal.
Early data from the U.S. Census Bureau shows that parents have used the money to pay down debt and medical bills; fewer households reported not having enough to eat after the first checks arrived this summer. Experts say the benefit is expected to lift more than 4 million children out of poverty. The current proposal doesn’t have a work requirement, but Senator Manchin has said he wants one added. Studies are mixed on how that would impact labor force participation and employment.
Similar pilot programs in places like Chicago have shown that recurring tax payments — rather than a one-time refund — helped lessen financial stress and even symptoms of depression. For single-parent families, many of which are led by women, the liquidity boost can help them fill in gaps of problems that would keep them from work, like finding child care or solving transportation issues, experts say.