Investing in Home Care and Early Childhood Educators Has Outsize Impacts on Employment

Home care workers and early childhood educators are a critical—and sizable—part of the American labor market. Almost 3.2 million Americans—overwhelmingly women, and disproportionately women of color—are employed in home health and early childhood occupations, making up a significant portion of the overall workforce. And they are not just any workers: They provide essential services to seniors, people with disabilities, and young children in day care and preschool settings. They enable parents, family caregivers, and disabled individuals to meet their employment goals. The COVID-19 pandemic has laid bare how important these workers are to Americans and the economy.

Given the scale of these occupations, investing in them has sizable effects on overall employment, affecting 2.2 percent of current workers in the United States. A large number of these workers are women and women of color. Overall, home care alone is the fourth-largest occupation by volume of people employed nationally and the most common occupation in California, Massachusetts, Minnesota, Missouri, New Mexico, New York, and Pennsylvania.

By significantly investing in home and community-based services (HCBS), child care, and preschool, the Build Back Better agenda can create nearly 1.1 million home care and early childhood jobs over 10 years, as well as lead to higher wages for a workforce that has been consistently underpaid and undervalued. After proposed investments, spending would benefit 1 in 35 workers, 1 in 20 employed women, and 1 in 11 employed women of color. (see Figure 1) As a major funder of these services, the federal government has a responsibility to ensure these occupations pay decent wages and benefits and ensure government spending does not drive down employment standards. This column provides an overview of how the proposed investments could benefit the overall workforce, the employment of women and women of color, individual states, and quality of care.

Home and child care workers are a significant portion of the workforce, and many are women and women of color

Home care and early childhood occupations—both broadly supported by the Build Back Better agenda—jointly represent 2.2 percent of employment in the United States, or just fewer than 3.2 million people.* Investments proposed in Build Back Better would create jobs in these caregiving sectors so that, ultimately, the occupations would represent 2.9 percent of total employment. For context, construction laborers account for 0.66 percent of total employment.

These occupations comprise an even larger percentage of employment for women, particularly women of color. This is largely due to the United States’ longstanding occupational segregation and its history of gender and racial discrimination. Currently, women account for 88 percent of all early childhood and home care workers. (see Figure 1) Women of color account for 36 percent of these workers, with Hispanic women representing 18 percent of workers overall; both are disproportionate to their overall share of the labor force. According to the authors’ calculations, Build Back Better’s investments in these combined workforces would affect 4.1 percent of employed women, 6.9 percent of employed women of color, and 5.3 percent of employed Hispanic women.** If proposed spending is realized, the sizes of these workforces would increase and the long-overdue investments would directly benefit 5.4 percent of employed women, 8.9 percent of employed women of color, and 7 percent of employed Hispanic women.

Figure 1

Considering that the Bureau of Labor Statistics produces estimates for more than 800 broadly defined occupation categories, these strategic investments in just two categories of workers would have an outsize impact on overall employment and the employment of women and women of color. These occupations are also unique as they are both part of the system that is subject to federal and state funding and oversight; thus, they can be directly affected by federal action. The federal government is also responsible for ensuring that government-funded child care and home care jobs do not leave workers in poverty or with poor working conditions. The Biden administration has acknowledged this obligation by improving protections for contract workers, and other publicly subsidized jobs should be subject to similar standards. In fact, proposed increases in HCBS funding can be particularly effective at increasing wages for home care workers: While Medicaid or Medicare payments to hospitals or nursing homes can go toward a variety of uses, the centrality of the workers providing home health services means that service payments in home care are essentially wages to workers.

For many states, the investments’ impact on the labor force would be especially significant

While home care and early childhood represent a significant portion of employment nationally, some states have an even higher percentage of their workforce employed in these occupations. As a result, proposed investments would affect an even larger portion of certain states’ current workers. In New Mexico, for example, investments would affect 3.7 percent of workers overall, 6.9 percent of employed women, and 10.3 percent of employed women of color. In Pennsylvania, investments would affect 2.96 percent of workers overall, 5.3 percent of employed women, and 11.4 percent of employed women of color.

Investments in New York state, meanwhile, would affect 6.7 percent of overall employment; in New Mexico, they would affect 4.7 percent of overall employment. In Wisconsin and Texas, investments would affect just more than 1 in 10 women of color. In New York, that number is more than 1 in 4, while in California and Pennsylvania, investments would affect nearly 1 in 10 Hispanic women. Figure 2 provides a state-by-state breakdown of home and early childhood care as both volumes and shares of employment overall, for women, and for women of color.

Figure 2

Investments will result in long-overdue wage increases for millions of women and women of color, many of whom live in poverty

The caregiving workforce has long been paid poverty wages for difficult work, largely due to perceptions that caregiving is a familial, and thus a woman’s, responsibility. This is also the result of a legacy of employer discrimination against Black women seeking higher-status, better-paid work: Until the 1970s, Black women were largely segregated into low-paid, largely domestic work. These workers were not valued, so the wages for the jobs of caring for other people’s children and family members were extremely low. This pattern repeats throughout history, with occupations dominated by women of color expressly excluded from social safety nets and other measures aimed at improving wage and working conditions.

Today, 1 in 6 home health workers live in poverty, with workers earning a median wage of $12.88 per hour. Strikingly, 75 percent of home health workers earn less than $15 per hour. Low wages and inconsistent hours result in a median annual income of only $18,100, even though 14 percent of workers typically work more than 40 hours per week. Further, 1 in 4 early childhood workers live in poverty: Child care workers earn a median wage of $12.24 per hour, and 75 percent earn less than $15. Preschool teachers can make slightly more, though still significantly less than the typical American worker, with a median hourly wage of $15.35. Women of color are also likely to earn less than white women within these sectors. For instance, within early childhood occupations, Black and Hispanic women are more likely to work in the lowest-wage roles.

Wage increases for these critical workforces could drastically change the pay and living standards of the women working these jobs. The intent of increased funding is, in part, to enact long-overdue wage increases for care workers. If, for example, home and early childhood workers earned $15 per hour, nearly 70 percent of workers—more than 2.3 million people—would see wage increases.*** With new jobs added as a result of Build Back Better investments, just more than 3.3 million people in both occupations would be able to earn at least $15 per hour. This would mean a full-time worker would no longer be earning a poverty wage for most poverty thresholds. (see Figure 3) Figure 3 shows how workers working increasing hours and earning $15 per hour can rise above various poverty thresholds, which depend upon the number of people in a household.

Figure 3

This increase in wages would also help close the persistent and stubborn gender pay gap, which is wider for most women of color. This gap is partly fueled by women’s concentration in low-paying occupations such as home and child care.

Investing in job quality for professional caregivers would improve quality of care

The fact that Build Back Better would create nearly 1.1 million new jobs is good not only because job creation is generally perceived as a net benefit but also because these workers provide critical services to disabled people, elderly people, and children. And as COVID-19 has made clear, they are a lifeline for familial caregivers and parents—largely women and women of color—who want and need to work.

Finding home and child care is already difficult: In 2015, an estimated 17.7 million Americans provided in-home, unpaid care to friends and family members, which often places emotional, physical, and financial strain on caregivers. With an aging population, the number of Americans looking for care is expected to increase. Further, more than half of Americans live in neighborhoods classified as child care deserts. Child care investments would make at least 5 million low-income children eligible for free child care, and at least 10 million children would be able to access more affordable child care.

It’s not just about increasing the quantity of professional caregivers in these occupations, however; improving wages will also yield higher-quality care and help address the issue of labor shortages, as simply put, higher wages are more attractive to workers. During the pandemic, Washington state has used federal funds to provide hazard pay—about $2.50 per hour—to workers. In a follow-up study, more than half of workers said that the wage increase strongly contributed to their decision to stay in their jobs. This undoubtedly reduced turnover and ensured continuity of care, important factors in ensuring quality outcomes for patients. Similarly, increasing wages can allow child care workers to do their best work by reducing poverty-related stress and health problems and increasing investments in training; turnover in child care settings is high and can undermine quality outcomes for children. Both sectors are also continuing to deal with the disruptive impacts of the pandemic: As of August 2021, child care employment is down 12 percent since February 2020, with 126,000 fewer workers.

Investments would enable broader labor force participation

Ultimately, investments in home and child care jobs would enable a broader proportion of those with employment goals to work by allowing unpaid care providers in the home to enter the paid labor force or work more paid hours. According to a 2020 AARP report, 39 percent of unpaid home caregivers were not employed. However, 23 percent of those who do not work have worked previously—and almost half left their job because they needed more time to fulfill caring responsibilities. Forty percent said they needed flexible hours, “could not afford paid help,” or that “their job did not allow time off with pay.”

Home care can also enable Americans with disabilities—a disproportionate amount of whom are unemployed—to live independently outside institutionalized settings and participate in the labor market. Funding for home care can specifically support disabled individuals in meeting their employment goals through providing personal assistance services on the job, rehabilitation, and more.

Finally, home and child care’s impacts on women’s ability to work would be significant. Women have long provided more unpaid, at-home care work than their male counterparts: 2 in 3 caregivers are women. Therefore, investments in the home and child care workforces would help facilitate the labor force participation of women, particularly those who are care providers and mothers. More than 100 economists recently wrote to Congress making clear that a lack of accessible child care has adversely affected mothers’ career progression and labor force participation. Child care deserts have also been shown to limit maternal labor force participation. More broadly, Time’s Up estimates that investments in the care sector could facilitate the employment of 3 million unpaid women caregivers.

Conclusion

Early childhood educators and home care workers are a critical, growing, and already substantial part of America’s existing workforce. Historically, these workers—largely women and women of color—have been undervalued and underpaid, which has resulted in high turnover and staffing shortages that can have adverse care outcomes. Proposed investments in the Build Back Better agenda have the capacity to affect a significant portion of workers, transform the home care and early childhood sectors, and lift living standards and employment prospects for millions of Americans.

Marina Zhavoronkova is a senior fellow for workforce development at the Center for American Progress. Rose Khattar is the associate director of rapid response and analysis on the Economic Policy team at the Center.

The authors would like to thank Lorena Roque, Mia Ives-Rublee, Rasheed Malik, Laura Dallas McSorley, Lily Roberts, Jocelyn Frye, Karla Walter, David Madland, and Arohi Pathak for their input on this column. 

* This number does not include certified nursing assistants (CNAs) who work in home care settings or the 350,000 self-employed child care workers who are family child care providers or family, friend, and neighbor providers.

** The 2019 share of Hispanic or Latino women employed in home care and early childhood occupations is from the U.S. Census Bureau. The numbers of Hispanic women working in the overall labor force are 2020 annual averages from the U.S. Bureau of Labor Statistics. The numbers of workers in the early childhood industry are from U.S. Bureau of Labor Statistics Occupation Employment and Wages tables. The numbers of workers in home health care are from the Political Economy Research Institute. Data on the number of new jobs added are from the Economic Policy Institute.

*** According to the authors’ calculations, currently, around 75 percent of the 2.3 million home health and personal care aides; 50 percent of the 370,940 preschool teachers, not including special education teachers; and 75 percent of the 494,360 child care workers in the United States earn below $15.