“If universal childcare is free for all, the families who would benefit most over the long-term would likely be those already thriving economically. Meanwhile the financial benefits for those barely getting by, while vital, could become offset by the resulting increases in other costs.”
(Michael Appleton/Mayoral Photography Office)
We have reached a defining moment in the movement for universal childcare in New York. Our Mayor-elect, Zohran Mamdani, rode the issue and just a small handful of others to City Hall. Gov. Kathy Hochul seems intent upon handing him at least a partial win on the issue, seeing it as a potential asset to her re-election effort next year.
The contours of her proposal, and for legislation, are being shaped now. It is crucial that we get this right.
Universal child care can be transformative, but only if it is built with an honest understanding of how wealth and economic insecurity shape the realities families face. Without that, even a well-intentioned program could help higher-income households pull further ahead while leaving struggling families treading water. The cost of living crisis demands a well-designed program that closes gaps rather than one that inadvertently widens them.
Like Universal Pre-Kindergarten for all four-year-olds in New York City, which was a campaign promise made good by Mayor Bill de Blasio with state funds allocated by Gov. Andrew Cuomo, universal childcare could provide free, high quality, accessible and inclusive care for all infants and toddlers. With increasing numbers of low- and middle-income New Yorkers struggling to stay in the state because they can’t afford the cost of living, solutions to the problem are coming from all sides.
Families with young children face the highest rates of economic insecurity, with 63 percent living below the threshold in New York State, according to the national True Cost of Economic Security measure created by the Urban Institute, Federation of Protestant Welfare Agencies and the Community Service Society. In other words, they do not make or have enough income, assets or other resources to meet their daily needs, save for a rainy day, and invest in their futures. Many have to prioritize basic daily needs and make difficult choices about what expenses are a must.
For these families, universal childcare would eliminate a major financial burden and help ensure that all children can receive quality early childhood learning, which is essential for their development and foundation for their success in school and in life.
Indeed, universal childcare would solve the dilemma of childcare affordability. However, it would not address its underlying root cause—which is economic insecurity—and could potentially exacerbate it.
To illustrate, in New York City, 72 percent of families with children are economically insecure, and the Urban Institute’s measure helps us understand their economic reality. Based on 2022 data, families with children in New York City need on average $165,300 yearly to be economically secure.
For families with children that fall below the economic security threshold, they have an annual average resource gap of $52,600, or a gap of about $260,000 over a child’s first five years. Free universal childcare could provide families with a financial benefit worth about $93,600 total for those five years, according to some estimates.
While that financial benefit sounds significant, it has the potential to deepen the existing economic security gap. Universal childcare alone would not close the resource gap for all families below the economic security line; meanwhile, families already above could be put way further ahead.
Taking full advantage of free universal childcare, economically secure families would likely be able to use significant amounts of freed up resources to grow their wealth even more. For example, they could purchase more housing or more highly priced homes or simply pay more in rent when competing for homes, thereby driving housing costs up. Lower-wealth households wouldn’t be able to do this; they would need their newfound savings just to make it day to day.
If universal childcare is free for all, the families who would benefit most over the long-term would likely be those already thriving economically. Meanwhile the financial benefits for those barely getting by, while vital, could become offset by the resulting increases in other costs.
I highlight this concern not to suggest our government shouldn’t ensure childcare is affordable for all, but with the hopes of helping mitigate any unintended outcomes that could worsen wealth disparity and economic insecurity. What families of different means are able to do with the financial benefits of universal programs matters and is part of what deepens underlying inequalities.
When we seek to fully understand and address the dynamics underlying growing economic insecurity—structural economic deprivation upheld through policies and laws that favor the wealthy and penalize those with few resources—we can and should control for the outcomes we desire. Well-intentioned programs must also tackle root causes, not deepen inequality.
For example, to avoid worsening wealth inequality, policymakers could make childcare universal for all but have higher wealth families contribute directly to the cost. Dare we dream, we could also pair free universal childcare with a shift in the tax burden from lower-wealth families to higher-wealth ones, balancing out the lopsided wealth effects. And, we could and should pay childcare workers fairly and improve their job quality and labor rights.
I believe in quality childcare being available and accessible for all families, and in a strongly supported childcare workforce. But to succeed in addressing the affordability and economic insecurity crisis facing more and more New Yorkers, our policy solutions must address both the problem and root causes, all while controlling for new harms.
Jennifer Jones Austin is the CEO and executive director of Federation of Protestant Welfare Agencies.
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