How to Avoid an Economic Crisis?

It is impossible to “have it all.” You can either give 100% to your career or you can give 100% to your family.....

 

 But that’s not a function of our capacity to work hard or love hard. It’s a function of the way the system in the U.S. is rigged against working parents. And it doesn’t have to be our reality.

If we want to reignite birth rates and ensure we don’t face a massive economic crisis in the coming decades, we need to change that system to make it more accommodating for people who want both a career and a family. Here’s how we do it.

First things first, we need to recognize that the world we live in today isn’t June Cleaver’s. More women are working, regardless of whether they have children—in fact, women were the majority of the U.S. workforce heading into 2020. As for moms, about 72% of them are working part or full time in the U.S., up from 51% fifty years ago.

Those are positive signs that outdated gender roles are crumbling. But you and I both know it takes a person with ovaries to birth a child—and if that person feels she can’t have both a modern career and a child? These days, I’m betting she picks her career. I’m 25 and single, but it feels like I could never have both a fulfilling and productive career and as many children as my mother probably wants me to have.

Why? Because of the distinct lack of federal support for working parents in the U.S., a shortcoming that discourages anyone with career ambitions from having children. Why would we when it’s so damn hard to do them both well?

That’s why we desperately need better systems designed to make it more possible for everyone to feel they are supported in pursuing both family and career.

Consider this: Out of 193 countries in the UN, only Suriname, New Guinea, a few island nations in the South Pacific, and the United States lack a national paid parental leave policy. Of the richest countries in the world, the U.S. is the only one without such a policy.

•     The Family and Medical Leave Act (FMLA) allows some workers to take up to 12 weeks of unpaid maternity leave—but only 60% of workers are eligible.

We don’t all work for hotshot startups with generous leave policies. And whether we get that leave shouldn’t be up to the benevolence of our employer. It also should not be up to 50 individual state legislatures to enact paid parental leave. Given that only eight of them plus D.C. have done so, we need federal action. Without it, would-be parents will continue to become won’t-be parents.

I’m not alone. Evidence suggests that both public health crises and economic downturns discourage people from procreating.

•     As stated at the top, Brookings estimates we’ll experience up to 500,000 fewer births next year as a result of both the COVID-19 crisis and the ensuing recession.

•     Melissa Kearney and her fellow economists found that a one-percentage-point increase in the unemployment rate is associated with a 1.4% decrease in birth rates.

Making matters worse: The one-two punch we’re facing this year will exacerbate the fact that people were already having fewer babies, even when the economy was on the up. The domino effect of that phenomenon is significant.

•     Using a standard economics tool called the value of statistical life or VSL, we know most lives are worth about $10 million (sorry, you’re not actually priceless). The permanent loss of 500,000 lives means an economic toll of some $5 trillion in the coming decades.

•     Fewer babies now means fewer workers in 20 years...which means less money siphoned off to the government in the form of taxes.

•     In a future economy with more 65-year-olds than 5-year-olds, we’ll be searching for that lost tax revenue to support elderly Americans and coming up short.

So here’s what we do: Stop twiddling our thumbs and start lobbying our lawmakers for policies like mandated paid parental leave, expanded subsidized child care, and improved tax benefits for parents.

For the most part, we have no problem finding people to make babies with. The more pressing pro-natalist efforts should be those focused on supporting parents after a child is born. What we really need is an almost post-natalist revolution—one that offers women the backing they need to be both Mom and manager.

It’s astounding that the U.S. still lacks these programs. Rethinking benefits for parents in the U.S. would encourage more people to start families. And we need that to happen.