The Bad Economics of Childcare

in finance. She felt that if she stayed in London, she'd have to cut back on her career to raise her kids, and she was probably right. Once kids arrived, the question becomes who's going to take care of them. Sometimes it's cheaper for one parent, usually a mom, to stop working and stay home at least for a little while. But even if parents pay for childcare, there are new constraints on their days. Someone has to pick the kid up from daycare or make dinner, and that's usually the

mom too. So women often find jobs that allow them to do that, but those jobs they pay less and they rarely lead up the corporate ladder. This is called the leaky pipeline, and it's one of the main reasons for the gender pay gap. The fewer women that get to high paying senior jobs, the wider the pay gap is. At City Group where Julia works now, women make percent less than men do because women like Julia don't often

make it to the highest paying jobs. Quite often, parenting really hits you like a ton of bricks, and I spent a lot of time with women who are really making what often amounts to lifetime career choices in the first few months of having a young child. This isn't just a phenomenon in banking. Women we talk to who work in all sorts of industries told us they're feeling

the childcare squeeze too. We don't have any family nearby to help out, and it was becoming quite stressful to try to juggle family responsibilities during working hours, or if

someone had a fever and couldn't go to daycare. Today my kid was sick and I had had him with his babysitters and nanny share and I've gotten a call in the middle of the day, and I felt bad because I had to work in the middle of the day, And then I felt awful because I brought him sick to the baby sits ear infection and it was just a big mess. The only way to make it was to ask for help from pretty much everyone and anyone.

My mother in law and my mother are both in town, so they can watch my kids if I really had something I have to get done during the week, but otherwise there is no strategy. We were scrambling to find a babysitter so that my husband and I wouldn't have to constantly call out of work. Julia and her husband didn't want to have to make these kinds of impossible decisions. No one does to be fair, but they worked in

an industry but allowed them to do something drastic. They moved to Singapore, where around the clock high quality childcare is cheap and plentiful. You know, everybody I met from Asia, including a lot of working women, spoke very highway about the infrastructure, the the help that people have in Asia, the quality of life and the quality of the school systems. The fact that I don't have to worry whether the kids have eaten or laundry, or errands or logistics. I

think it's a huge peace of mind. It really allows one to concentrate on work, going dow, I'm at work and you know, on home when I'm at home. For the last forty years, childcare in Singapore has been a huge advantage for working women in the city, state expats and high paying jobs like Julia she has three kids now, by the way, and everyone else. Cindy, a Singaporean woman who asked that we not use her last name to protect her privacy, says it's a huge help. So I

think in the sea ball we are quite less. It's really the peace of mind because the times ware shoes. Oh wait, I can feel the pressure even though I can see handle and I need to handle a new born and my son is like screaming all side. But it's I can really feel the pressure of win if I have to do it every day and if I go back to what I really kind of meagin you have to handle today. One in seven households in Singapore has a live in domestic helper. This didn't happen by accident.

In the seventies, Singapore's economy was starting to take off and they needed workers. Could they convince more Singaporean women to join the workforce? In the government introduced what it called its Foreign Domestic Servants scheme. There is a good number of women in Singapore with special skills or training, but who are not in gainful employment as they're being

burdened with household duties. In order to encourage these women to take on gainful employment hence tributing to the economy, the Ministry of Labor has recently implemented the government was opening the door to women from poorer parts of Asia who wanted to come work as domestic helpers so that Singaporean women could work outside the home. And it was a success. The labor force participation rate of women working in Singapore increased a hundred between nineteen seventy and but

what about the women who made that possible. Over the years, hundreds of thousands of women have immigrated to work in Singapore, making as little as around four hundred U S dollars a month. And a lot of these women their moms too. Some of the domestic workers who will come and say their homesick, the one who you know they missed their children. I said, this is not the nice things to say, but from my experience that you need to think about

their future. I know it's not easy. I mean you can choose to go back, but do have a job back there? Do you think you will have a stable chart to support Romano Novado has been a domestic helper in Singapore for twenty four years. Her parents raised her three kids back in the Philippines. Today, we're going to hear her story. Women deserve people for equal work. Plenty of women decided to step back from their careers after

becoming mothers. Some want to devote themselves to parenthood. Others black affordable childcare, and nationwide, the median salary for men is greater than women in nine point six percent of major occupations. There's no single industry where women aren't punished for appropriating. When women are financially stronger, it's good for their families. It's put money into the economy, in the market, it's good for everybody. Millions of women work in our

homes every single day as nanny's. It's the work that makes all of work possible. Welcome to the paycheck. I'm Rebecca Greenfield. The economics of childcare are bad. Either someone has to stop working and stay home, or you have to find someone else to watch your child. Occasionally, that's family and it's free. But usually it's somebody else that you're paying, and that's expensive. On average, it costs ten

dollars a year per kid for daycare. In some places like Washington, d c. Or Massachusetts, the average is twice as much. For most families, that's a big chunk of their income. Half of households are bringing in less than sixty dollars per year. So imagine spending more than of all of your money just on childcare, and that's just for one kid. It's a lot, and it's still arguably not enough because the people, mostly women, who work in those child care centers, they're earning only about a year.

All over the world, childcare depends on this kind of wage arbitrage. It depends on having enough people, again, almost always women and often immigrants, who are working for very little money, which brings us back to Singapore. Professional women are in a sense exploiting the cheap labor of other women, and part of the reason they have to do that is because the local state is not providing them, or let alone less well off women, with the option of

affordable childcare. Nicole Constable is an anthropologist at the University of Pittsburgh who studies migrant domestic workers in Southeast Asia. The reason they go abroad is because they can't earn what they should be earning in their own trees, and that the countries that import them to work as domestic workers aren't paying them even the local minimum wage. They justify it by saying, well, they're willing to come, so

we're not exploiting them. But really, if they paid local workers to do that work, they would have to pay an awful lot more, which tells you about the problem with the market. Tomoko Yamazaki is a reporter in Bloomberg's Singapore bureau. She spent some time with Romina Novado, the domestic helper in Singapore. Orchard Road is Singapore's main shopping street, lined on both sides with massive luxury mass If you want to buy a rolling swatch or could tear gown

from Chanel, you can find it here. This is also home to a mall called Lucky Plaza. It's got lots of Philippine restaurants, stores, and placement agencies for domestic workers. On Sundays, the day most helpers have off, it's packed with women shopping for food or products that remind them of home. My name is Robina Novato. My friends called me Being. I've been working as a domestic worker here in single worker all twenty four years, and I'm from Manila, Philippines.

Being is in her mid forties now, and when I met her, I was struck by her confidence and her charming smile. But she was just twenty two when she left her parents and six younger brothers and sisters in Manila. She had finished three years of college, but she also had three young children, and the job market in the Philippines wasn't good. The ages were low, poverty was high, and her parents weren't thrilled about her boyfriend. It was my father who urged me to come here because I

need a stable job to support my children. That's that's what they want me to do, and to be away from my living partner at the time. Here's how her mother, Angelita Nevato, remembers it. Apple As for me, well, her papa's views were different from mine. I approved because of the situation I was seeing then. It's like I felt

that nothing will happen here. It was like nothing good will happen for her children if she stays here, her children will be really separated from her Another thing, of course, is that her Papa and I would be the ones looking after her two children. Then knew someone who could help her find her get a job, and so she went moving in with the Chinese family. It was the first time she slept in her own room. The Millers. We have small house, but most of the families back there,

you know, will be just all sleep in one. So having my own room, I always remember feel like I wished my kids were here. So every time I eat, I always, you know, think that I wish my children is eating the same. That's the hardest point. And then every time I missed them, I just look out out of the window. It was difficult, but because I was young, and I always think of, you know, like I need to do this because who will do this for them.

In the beginning, all of her extra money went to pay the agency back in the Philippines that set her up with the job in the first place. After that, she sent money home about hundred dollars a month, money that went for food and school and other household expenses. Families that want to hire domestic helper have to follow a rule set by the Ministry of Manpower. There are rules for the helpers too. Then could only stay as

long as she was employed. If she lost her job, she'd have just two weeks to find another placement, or she'd have to leave female these workers have to take a pregnancy test every six months. If they get pregnant, their work permit can be revoked in two thousands folve. So just seven years ago, the Ministry of Manpower said domestic workers are entitled to one day off a week.

Not everyone follows the rules. Since that hasn't been the law for as long, a lot of women still don't get days off in Singapore, or they get one off a month or something like that, and there's not the same understanding that it's required that. I think employers in Singapore think they can buy it out. That's nickel constable.

They've all heard about going abroad all their lives. Most of them have college degrees, and even with college degrees, they often either can't find jobs or can't find jobs that pay much at all. So I remember when I first was interviewing Filipinas back in the nine ten nineties, and they could make more as a domestic worker then they could as a nurse or a school principle. After six years in Singapore. Ben went home for the first time. It was two thousand one, and I cannot forget the

expression of my children at that time. My youngest one don't want to come to me because he grew up with my parents and they always think that my parents are their parents. And I remember my daughter looking at me inside the taxi. She asked me, are you on, like, are you really my mom? And then I said yeah, and then I asked a white people looking at and then she said, you're beautiful. As time and on, being

has been able to go back more often. The money that she and other overseas workers and home really helps. In two thousand twelve, being bought a house back home. Her parents and one of her sisters lived there. She also sends money to her children, who have families of their own. She has seven grandchildren. The economics of it are complicated. Nicole says the money that mag and workers send Poeme does improve the quality of life for their families.

It creates jobs in their communities, but it's only sustainable as long as someone's abroad, and workers will only go abroad if their options at home are worse. Everyone thinks I'll go for one two year contract. I'll save enough and then I'll be able to change our lives. And most of the people I've heard say that they've ended up having to um keep working abroad, or they go home and they have you know, maybe a new concrete floor of their house to show for it, but then

they always want more. Um. It's never quite as much as they think that it will be. The longer you're away, the harder it is, I think, to go back and to have things be the way you thought they would be before you left. At this point, Bing's mother doesn't want her to come back. It s well, she's the one who doesn't like it here. I was asking her when she will stop working, and she answers that until she is strong and able to work, She's okay there,

her situation is better. She finds it difficult here. There's the transportation fare and if you work here, how much salary do you get. Being is not ready to go back either. She doesn't think she saved enough money and she doesn't want to be a burden on her children. Plus, her sister is working in Singapore now and Being also works as a volunteer with a group that advocates for

better conditions for domestic workers. She's considered kind of an elder in the community, someone new arrivals can turn to for advice. I'm part of the help this team. We give advices to them, so it's kind of like sharing, how you know. I stayed until twenty four years without getting into trouble for a time. Thing thought she'd helped her daughter find work in Singapore, set her up with a good family, But in the end she wants something

better for her life of a domestic workers. That is, I had good employers to whole time, but I'm worried that she might not be the same, and I don't want to see her as her mom. Uh No, I'd rather have her back in the Philippines spending time. I don't want her. I don't want her children to experience

what she had experienced. Advocates for domestic workers in Singapore say that they should be paid at least the local minimum wage, that they shouldn't be forced to live with the family they work for, that they should eventually have the rights and privileges of other permanent residents. But Singapore system only works if the childcare workers don't get paid more.

That's pretty much how it works. Everywhere. Affordable childcare depends on low wage childcare providers, But is there any other way? Elizabeth Warren wants voters to consider that question in the US presidential campaign, and that's why I'm proposing a big structural change, universal childcare and early education for all our babies. People today are paying more than a thousand dollars a month could get the highest quality child care and pay nothing.

That would be life changing for millions of mothers and fathers all around this country. And here's the fun part. We already know how to pay for it. Part of her presidential platform is a proposal for universal subsidized childcare, and a plan ch hanveiled earlier this year. Parents would pay no more than seven percent of their income for daycare, and that low cost it wouldn't come at the expense of the salaries of those taking care of our kids.

Under Warrant's proposal, daycare workers would get paid the same as public school teachers. My plan pays childcare workers like the professionals. They are more training, higher standards, and much better pay. These childcare workers are disproportionately black and brown women, and they have been undervalued and underpaid for far too long,

how do we pay for this all? She says, higher taxes, and her argument for doing that is that when we help women secure your affordable childcare, and when we pay women to do the work of raising our kids, everybody benefits. The economists that Moody's estimate that making childcare more affordable would boost the US GDP by seven hundred billion dollars over ten years. Even if you don't agree with this plan, that's a big economic stimulus. Next week on The Paycheck,

The Secret to Women's equality. Men, how do you handle family responsibilities during work? Come? Come here? What would I do if you poop your pants at school? Well, first of all, I don't poop my pants because I'm a second career. But if I did, um, you would probably tell momm and have her come take me up. That's right. I would probably tell my wife to go pick him up. Thanks for listening to The Paycheck. If you like the show, please head on over to Apple pod Casts or wherever

you listen to rate, review, and subscribe. This show was reported and hosted by me Rebecca Greenfield and reported by Tomoko Yamazaki and Singapore Andrea Colonso and Manila and Janet Paskin in New York. Translation was provided by Bloomberg's localization team in Global Data. This episode was edited by Janet Paskin and produced by Liz Smith. We also had production help from Samantha Gatzick, Billian Goodman, Francesca Levi, Stephanie Fawn,

and Jody Schneider. Our original music is by Leo Sidron. The illustrations which you can find on our show page at bloomberg dot com. Slash the Paycheck are by Pamela Guest and thanks to all the moms we spoke to for the show. Francesca Levy is Bloomberg's head of Podcasts