The post-Covid landscape for work and office life is still unsettled. In major metropolitan areas like San Francisco and Washington, D.C., it seems like a major shift has happened in favor of permanently higher rates of working from home. In other metro areas, life has largely returned to normal. All the while, firms are still heavily competing for workers, if not quite so frantically as last year.
For many working parents, child care needs have complicated a return to work. The number of parents who say they are not working due to child care problems is higher than it was pre-pandemic, though not the tsunami some media reports have suggested.
In an environment where businesses are seeking to attract employees, companies could stand out in a crowded marketplace by emphasizing their family friendliness. Eleven percent of workers in private industry already receive some form of child care benefits through their employer, such as through a dependent care savings account; that number should be far higher in a post-COVID world.
As a new report I contributed to for the Social Capital Campaign reminds us, there are few institutions that capture more hours of our waking time than the workplace. Policymakers should not put a thumb on the scale between home and work life, and must make sure families with a stay-at-home parent are treated fairly and equally. But there are lots of steps employers and policymakers could take toward easing some of the burdens unique to families with single parents, or families with both parents in the workforce. Beyond individual-side policies like savings accounts, policymakers could help employers help to shoulder some share of the cost of child care.
Of particular utility to parents, especially those with infants, is having child care provided on site. Having children at the same location as mom or dad not only means less time spent commuting; some parents even take advantage of the opportunity to spend time with their child during the day. A friend of mine who worked at a large pharmaceutical company loved being able to take a few minutes away from her desk to visit her child at the on-site nursery.
Some firms already commit to this vision; Patagonia, for example, spends about $1 million per year on child care at its corporate headquarters, providing services for a total of about 80 children. It is rewarded by being named one of the top places to work. Home Depot is another large employer that invested in on-site child care for its employees in Atlanta.
The tax code currently offers employers a modest benefit for on-site child care; firms that spend upwards of $430,000 or so can receive a maximum benefit of $150,000 as a credit on their taxes. According to the Society for Human Resource Management, 4% of the businesses surveyed offered child care at the office, and the actual number is probably even smaller. Fewer than 280 companies nationwide claimed the credit for on-site child care in 2016, suggesting that making the credit more generous and accessible might induce more firms to think about adopting on-site child care as a benefit.
This could be done by doubling the size of the allowable credit from $150,000 to $300,000. A report from the Government Accountability Office also pointed out that allowing multiple employers to jointly provide care and receive the credit, making it refundable, or allowing it be applied against payroll taxes, could expand the pool of potential on-site care providers, including small businesses and non-profit organizations.
And while space for child care has been a constraint for many businesses, the post-COVID landscape has opened up new possibilities. As The Washington Post’s Alyssa Rosenberg pointed out last year, an office environment in which more employees are working from home might have more physical space available than a firm strictly needs, ready to be repurposed as child care space.
Of course, there are other ways firms could bill themselves as being especially family-friendly as well. While working parents had to fight for workplace flexibility in the pre-COVID days, the rise of Zoom and other remote work tools have made working from home much more common, especially in certain industries. While some jobs inherently require some element of face time, firms that try to force a return to in-person work for all employees shouldn’t be surprised to see parents finding other jobs or lines of work.
We know child care is expensive for many parents, and rewarding business for providing better child care benefits to their employees will surely lighten parents’ load. But it benefits employers too. Firms benefit from knowing their workers have child care they can count on, and, as mentioned, this option can help attract workers in a competitive labor market. And there’s real potential for such a push to be bipartisan — in 2021, Republican members of the House Ways and Means Committee proposed increasing the generosity of the credit for small businesses and giving firms more flexibility in claiming the credit.
And while massive government programs, like the ill-fated Build Back Better, are the wrong way to go about supporting parents, encouraging employer-provided child care benefits makes sense. Instead of assuming a model in which most families want both parents in the workforce, employer-provided benefits go to parents who have already made the choice to work and have found a job, rather than having the government provide a benefit only to families in which all parents are working.
The post-pandemic landscape has caused lots of parents to rethink the relationship between work and family life. Employers should be reassessing what kinds of benefits they view as essential for their workers, too. And policymakers can, and should, experiment with ways to help businesses do the right thing without penalizing families who prioritize having a parent stay home.
Patrick T. Brown (@PTBwrites on Twitter) is a fellow at the Ethics and Public Policy Center and a former senior policy adviser to Congress’ Joint Economic Committee.