The Key to Economic Growth is Building a Care Grid

Imagine a nanny and a lawyer side by side, waiting in line at the local Starbucks. If she were working for a client at the time, the 15 minutes the lawyer spends getting a latte could be billed out at close to $200.

And yet, how much is the nanny’s time worth?

We pay care professionals—those who take care of our children and seniors—a salary comparable to fast food workers. Childcare costs surpass rent in many states. These realities produce a lack of accessible care that drives absenteeism at work, cutting into productivity and hurting profits in any number of areas across our economy.

Care is no “soft” issue, argued panelists at New America’s annual conference. All of us, at some point in our lives, will either provide or require care. It’s the infrastructure that powers our entire economy by allowing all working professionals to do their jobs secure in the knowledge that their children or aging parents are with caregivers whose work has equal value to theirs.

And yet, “we invest in roads and bridges but we don’t invest in care,” said Sheila Marcelo, the CEO of Care.com.

It’s a myth that there’s some economic tradeoff between care and competitiveness.

Part of the problem is that we think the care economy is inconsistent with the market-based economy, when in fact the care economy supports the market-based economy, explained Mohamed El-Erian, the Chief Economic Adviser of Allianz and former CEO of PIMCO. It’s a myth that there’s some economic tradeoff between care and competitiveness:  “You’re taught as a CEO that you can’t be caring in a meritocracy – that’s not true.” El-Erian learned the hard way about the importance of care during as tenure as CEO, when he discovered that it was impossible to retain talent without both a culture and policies in the workplace that allowed people to take time to care for loved ones when they needed to.

“Economic prosperity is a function of taking the care economy seriously,” he said.

So how should we convince people that the undervalued care industry is just as important as highways, power lines, and plumbing, to our national infrastructure and economic competitiveness? Unsurprisingly, the panelists asserted, we must first change the way we talk and think about care at both a micro and macro level in the United States.

“This idea that care happens at certain parts of your life and then it’s over – that’s not the reality,” said Latifa Lyles, the director of the Women’s Bureau at the Department of Labor. “Forty million families care for an elderly relative, and 30 million have young children” in the United States.

But even though it’s a majority issue, too many Americans feel pressured to keep their caregiving struggles to themselves. Asking for help with something that feels so personal runs counter to America’s culture of rugged individualism.

So millions of Americans, particularly those in “the sandwich generation,” are struggling with these questions alone, suggested Sarita Gupta, the co-director of Caring Across Generations. She noted that she has renamed the sandwich generation “the panini generation – because we’re so pressed.”

Although it’s mostly women who are “pressed” from taking on paid and unpaid care work and caring for both aging parents and kids, this broken system impacts everyone’s bottom line.  Lyles broke it down: “We know that a quarter of a million dollars are lost for an individual, including wages and social security over a lifetime, because of unpaid care.” If women between the ages of 25 and 54 participated in the U.S. labor force at the same rate as they do in Canada or Germany, Lyles continued,  there would be roughly 5.5 million more women in the U.S. labor force. According to Lyles and the Department of Labor, that would increase GDP by roughly 3.5 percent, which translates into more than $500 billion of additional economic activity.

It’s easy to view this current moment as a crisis, but it’s also an opportunity to recognize that care is a structural rather than an individual problem, Gupta suggested. “Just as we’ve built infrastructure in our nation in the past, bringing water and electricity into every American home, we need a care grid in our economy. We need to be able to bring as many caregiving options to every home in America.” Lyles concurred, “Part of the reason that people don’t talk about what they need is that it can feel like a problem I have to fix, not an expectation of my employer or the economy.”

El-Erian views the failure of states and businesses to translate the strong economic case for a care grid into policy action as a market failure. In his view, employers aren’t getting the right kind of information from their employees and they suffer from “active inertia” – knowing that they need to change, but continuing to do the same things anyway.

El-Erian knows of what he speaks. Part of his job involved figuring out how he could increase employee productivity. He would start that process by asking what employees needed to work smarter: A better computer? More training? As it turned out, the number one productivity issue was childcare – something he only discovered after conducting a blind survey. “People will never say that [in person], because they’re afraid” of being judged as lacking commitment.  Once he made this discovery and introduced childcare, “people stopped worrying, absenteeism came down, and it was transformational.”

Since we can’t rely on this kind of transformative policy change at the federal level anytime soon, a more effective strategy may be one that targets states and businesses as the essential pioneers of paid sick days and paid family and medical leave, the panelists suggested. Indeed, businesses and states are already taking the lead – for instance, three states and 18 cities have paid sick leave laws. And policy change is only one part of the puzzle. Another big challenge is figuring out how to shift workplace culture to make room for new policies to stick. For instance, even when companies offer paternity leave, men often don’t take it because of an enduring stigma.

“You’re overcoming decades of conventional wisdom that is not very wise,” said E-Erian. It’s important, too, to convince men “because men still control a lot of the decision-making.”

“We’ve noticed,” joked New America President Anne-Marie Slaughter.

But the issue of the care economy extends beyond the economy itself and speaks to who we are and who we want to be as a society. “The most compelling, game-changing conversations I’ve been part of are where business communities and CEOs acknowledge the economic issues but then say we’re doing this because it’s the right thing to do,” Lyles said. “It’s time that we think about our workers as people with families.” About 70 percent of mothers with kids under 18 are currently in the labor force, and 43 percent of women with children will leave their jobs or off-ramp for an extended period of time.

In some ways, we’ve come a long way since the early days of the women’s movement. But in other ways, said Slaughter, “we liberated women to be their fathers” by failing to develop an understanding  “the vital foundation that care provides for competition…We’ve been focusing on that issue as a problem of discrimination or lack of assertiveness – but the problem is devaluing of care.”