The American Economy unemployment has remained below 4 in recent years notwithstanding the success from many across the country based on the survey of adults between the ages of 20 to 45 of parent 45 n for those who plan to be expected during the lifetime they would have fewer children than they considered to be within their range of ideal. Economic concerns were foremost on the reasons over the past few years the joint economic committees social Capital Project has been documenting trying us in what we refer to as the association that is the web of social relationships for which we as americans pursue various and diverse. Families, communities, friendships, religious congregation is for example. The critical source of meaning and social capital is of course the family in fact the central headwaters for the social connected us generally. Thats why two of the projects policy objectives are making it affordable has become a unifying concern among lawmakers and policymakers and commentators of both the political right in the politicaand thepolitical left an between it is very as declining fertility rates increases in the cost of child care and housing, paid family leave and student debt burdens. Motivating this is a simple statement it should not be this hard to raise a family economic challenges such as increases in the cost of living the family formation and expansion difficult for Many Americans that often leads to too little time to spend with them at least then they would prefer. Americans who might prefer something closer to a single breadwinner family for other expenses that are by the dual earner households and growing ranks of Single Parents are hampered by the correspondingly high property race the answer to hell did we get here is complicated. The first step must be to adequately diagnose the problems facing our families. What fuels the rising cost of health care, child care, education and housing. How many are hindered in the Student Loan Debt and and adequate income are there ways to increase the flexibility that are minimally disruptive to employers which of those can be reformed and how can we make it fair to those that bear the cost of our panelists today discuss some of these topics in more and i look forward to the testimony and productive conversation helping parents and strengthening our families and now bracket as the vice chair thank you for calling this hearing nothing is more important than our families and thank you for shining a spotlight on the challenges facing American Families. Billions of americamillions of s are working longer and harder not to get ahead but just to stay in place. But cost of childcare and otherr necessities for families have grown most rely on two incomes just to make ends meet because thats what it takes to support an American Family today, nearly 40 of American Adults report they have trouble paying for at least one basic need like food, healthcare, housing or utility. Its no brighter when you look at the specific costs. Take childcare. The average cost is more than one quarter of the Median Household Income for single working parent. That means those who need child care the most cant afford it or look at College Education which is almost a necessityn todays economy. I would say it is a necessity but since the 1980s the average cost of a fulltime undergraduate degree has more than tripled for public and private institutions. Todays typical graduation leaves 30,000 in debt or look at housing. They are higher than ever and often out of reach. And over one third of the renters spent more than 30 of their overall income on rent. How are they responding to stagnant wages and growing cost by taking on debt, Consumer Debt excluding mortgages is now 4 trillion, the highest level ever. Folks are also putting off Home Ownership can deprive them of the key source of accumulation. Everyone in the room agrees that its more expensive than ever to raise a family, but we may disagree about the cause and develop a solution. I welcome the robust discussion the committee provides for women in the workforce is not a problem we may hear that they got married was frequently as women took on careers that women have become key drivers of the economic success and boosted the economy by trillions of dollars and are critical to the American Families. The Household Earnings increased from 36 and could do even more if we made it easier to enter and stay in the workplace and have more flexibility as the chairman mentioned. There are two key overwhelming popular ways to do that, offer child care and paid leave for the birth of a child in for work lets take a lesson from others that provide the services that have significantly higher Labor Force Participation and while we are added, lets make sure women are paid fairly so they have strong incentives to work on average a Woman Working fulltime burdens he of her male counterparts at th of the e for black and Hispanic Women its far worse, far too many the American Dream is slipping away or is completely out of reach. Some would say the solution is for the federal government could do nothing. I disagree it has a key role helping to restore that dream. What can it do, lets start by looking at minimum wage. The house passed legislation to raise. Its time for the senate to follow suit. We should expand programs and initiatives that we know work like the earned income tax credit and Child Tax Credit. The substantially increased employment on single mothers and reduce poverty levels for their families. We should make the Child Tax Credit fully refundable to allow the poorest families to receive the full benefit. The working families tax relief act that extends both would benefit 49 million including 2. 7 million for my home state of new york and we should strengthen the Supplemental Assistance Program in not only provides a Healthy Foundation but its also an investment in the economy. Every dollar generates more than 1. 5 and we should join the rest of the world in paid leave for the birth of a child nearly two countries in the worl world to provide paid leave for the birth of a child. America and new guinea. My bill which was included in the National Defense authorization act that passed the house this summer is a good start. With 512 weeks of paid leave in a model for the rest of the country to follow after the birth or adoption of a child or care for a Family Member that has a serious illness. Raising a family is hard and rewarding work and we need to do more to provide workers with the tools to balance work and Family Responsibilities like appreciate the chairmans statement on flexible time and how that would be helpful for families. Todays hearing and witnesses testimony will shed light on the actions we can take to make raising a family more affordab affordable. Its important for the future of america and American Families and the American Dream. Thank you vice chair. Id like to address a couple of housekeeping matters. This is a joint committee of both members of the house of representatives and the senate as the states would have if both the senate and house of representatives decided to call votes in the middle of the hearing so you may see members of the house and the senate leaving and coming back. We will be here every bit of time we possibly can. I didnt want people to be alarmed leasehold unfaltering in and out. I would like to introduce the witnesses now. First we have mr. Stone, adjunct fellow at the American Enterprise institute and Research Fellow at the institute for family studies. He is right about migration and Population Dynamics and regional economics in his work has been covered in the new york times, washington post, the journal and other outlets. Welcome. We have mr. Rya prayer to his re at cato, he was the head of Public Policy at the institute of Economic Affairs and head of Economic Research at the center for policy studies in the uk. He has written on a number of Economic Issues such as fiscal policy and equality, minimum wages and rent control and has appeared on bbc news, cnn and sky news. He writes weekly columns for the Daily Telegraph of london paper. Thank you for being with us. Next we have the centennial professor and youth problems at Columbia University school of social work and codirector of the columbia Population Research center. Written extensively on the impact of Public Policy on the wellbeing of children and families into the work has focused on more family policies and equality in Early Childhood care and education, poverty, social mobility and the black and white achievement gap and shes the author of eight books and has published numerous articles and reviewed academic journals. Welcome, doctor waldfogel. And we have ms. Kristin, executive director and cofounder of an Organization Called roms rising. Involved in Public Policy and grassroots engagement for over two decades and has received numerous awards for her work and is an awardwinning author of books and articles and frequent public speaker in the media contributor and host of the Radio Program breaking through the way thank all of you for joining us today and we look forward to hearing your testimony and we will now hear from you in the order in which you were introduced. Go ahead, mr. Stone. Hit the button until it turns red. It is an honor to be here. Thank you for inviting me, mr. Chairman and mr. Vice chairman. Its an honor to be here to testify on topics important to American Families. Im affiliated with the Enterprise Institute for family studies however, for my testimony today they are my own and most discusses fairly concrete questions of family affordability. A child rearing in america isnt really that much more expensive than in the past. Some elements have gotten more expensive but the evidence suggests the problems facing families couldnt simply be a budget crunch. The average American Woman says she wants to have about 2. 3 to 2. 5 tour debuted for children. Its been stable for 30 years and yet if current birthrates hold the average young American Woman today will only end up having about 1. 7. That means for every ten in america there will be about six missing children. This is a new problem from 1990 to 2007 the fertility gap was consistently just one third as large as to whats going on instead of affordability we should be discussing the chief ability. What is Holding People back from having a family they reliably say they want in surveys. The answer is basically marria marriage. Increasingly postponed marriage in california at least half of the increase in the fertility gap over the last decade and 100 of the increase since 2000. Incentivizing is a tricky question in this society. Americans are justifiably uncomfortable being lectured by anyone especially the federal government but luckily there are some good policy options available. First of all it has t all saidl government already has a marriage policy. Policy. In this policy is this. Workingclass people should get married. But middleclass and wealthy people should. This is the policy stance of the tax code, the welfare programs, almost everything the government does. The tax code gives you a handy marriage bonus if you have a ceo and their spouse is unlikely to earn an equivalent amount they are the greatest benefit to families with the most lopsided disposal incomes but if you give the eit see getting married to reduce your benefits by thousands of dollars. There is a real tax in my written testimony i show how the marriage bill came up to 15 or even 25 of the familys income it isnt per se but the eligibility rules. The result is neighborhoods with scattered families come inconsistent folders overworked mothers and diminished opportunity for children and fewer kids overall the marriage first exploration of the achievement is to reconsider our justification for policies like the Child Tax Credit. The justifications of the Child Tax Credit is not the parents are inherently cashstrapped, but rather parenting is inherently valuable to society. In other words, we should have a parenting wage because parenting is important work and workers deserve to be paid. How we provide such may vary but we as a society should treat parents more generously than we presently do. And in a way that explicitly communicates to the present that we see parenting as worthy. When societies provide a parenting wage, the fertility gap shrinks. Now, if there is also a change in the marriage and norms of behavior, fertility rates will rise by a lofgren is the best strategy is a onetwo punch. For family of chief ability to improve in america, despite the penalties for the working class while number two, increasing or social connected to th commitmef parenting by providing a parenting wage. And whatever happens to fertility rates, the children who are born are born into a society with greater opportunity, healthier families which engages in a valuable public. Her into the matters. Thank you. Mr. Chairman, members of the committee, thank you for inviting me to testify today. To take 57 percent of it spending toward shelter and food and clothing alone the average family with Young Children locates 53 percent per any meaningful analysis of a family of four looking at the prices childcare affordability is given the Family Budget high housing and childcare prices necessitate corrective Government Intervention and price controls and subsidies but in both markets with regulations actively constrained supply extensive Academic Work show those new constraining in major cities as the housing for demand rises and drives up the housing services. In the tyrants and mortgage payments. It is a state level regulation and qualification requirements which reduces the supply of Child Centers in poor areas driving up prices. The same part of Government Policies the federal Sugar Program with the national mandates raise the price of family groceries. Foodstamp regulations and the leadership was in fact one inflected driving. And with the footwear prices and stay occupational license create barriers to entry from hair braiding to dentistry. With between seven and 30 percent of the aftertax income. Nor is that list comprehensive in those regulatory actions. And it also doesnt consider indirect cost. For example the elevating housing cost to make it more physically and financially difficult to access jobs and higher wages. And those that could benefit for families considerably. With the staff to child ratio could reduce childcare prices by 10 percent or more. To address those high prices for risky rent control measures and Affordable Housing at a higher minimum wage government subsidized childcare and the new tax credits for standard allowances. So before proposing new or expanded programs we should acknowledge the leaders that already exist to a family affordability. These regulatory changes would not require more federal borrowing or the risk associated with wage and price control. It may not be the full challenge but before reaching for new programs and regulation we should attempt to undo the harm of existing interventions. [inaudible conversations] we should make that clear to our colleagues. Thank you for being here today. Having come in late please continue your testimony. Go right ahead. Thank you for inviting me to speak with you today. Over the past 25 years setting policies to support families especially for the 11. 5 million children in poverty in the 27 million and with those anti poverty affects that congress has been enacted it makes it clear that the four. 5 million children moved out poverty. And then to improve child health. But income poverty is not the only challenge that they face. Since 2012 since the Robin Hood Foundation our group finds that poverty is the tip of the iceberg of one. 6 million new yorkers over four. 4 million face Material Hardship or challenges. And then to support American Families we need to document that they were not with this reality the family medical leave act and federal childcare subsidies only reach 11 percent. Employer policies looking for more advantage employees while they have access are those who are low income and for those to pay for child care. But we know from research these policies matter. And mothers are less likely to be depressed. Fathers are more likely to be engaged in caring for children. Opinion surveys show americans favor paid family leave on family and medical leave. My colleagues and i have been serving including small employers and in three states with pay and leave laws we found two thirds of employers were supportive and childcare is extensive and clear to help the Cognitive Development and social development especially for disadvantaged children. Especially in Early Childhood. So they were more likely to be employed with family stability the estimate suggests that childcare could reduce poverty by one third among families looking for child care. But knowing what the government can do those like snap but they also need cash and to pay rent and utilities. They have some form of child allowance or child benefit more frequently to all families with children. And to have the biggest impact those who earn too little to have their first Child Tax Credit of 2000 per child that were authorized under the recent child tax cut that recovery includes half of Young Children while there is ample evidence of these policies like the eitc thai time we join our peers to have paid family medical leave with universal child allowance and child on family childcare. Thank you members with over a million members we are on the frontlines of the crisis. Experts agree that have dire consequences. That the policies are woefully out of date and families are suffering as a result. To boost families in the economy those with all types of families the situation is urgent and those that experience this crisis each day and then if they could not afford child care. Until they started to get snap they often had to go without healthy food nobody let alone Holding Multiple Jobs should struggle to put food on the table but too many for one out of six children with food insecure households jamie is not alone one out of three households now pay more than 30 percent of income for housing and more than half are ventures now exceeds 1 trillion and childcare with black and latino families spend more of their income than anyone else. With child care and housing cost they live with her parents to try to save money and that productivity would be rising that wealth inequality is increasing and most people raising children in america are facing a financial crunch. Women are paid 80 cents on the mans dollar and moms experienced increased wage discrimination 71 cents to the dads dollar. To show a direct correlation between high levels of women in corporate leadership and higher profits women became half of the labor force and three quarters of the moms and they are the primary bread bidders. So women are not paid fairly the entire economy suffers. To go into the 21st century with the modern labor force and updates to the outdated policies and then policy changes could solve these issues. It with the paid equity. When this many people have the same problem at the same time it isnt an epidemic of personal failing but a national structural issue. We need to move quickly to pass the family active paid family medical leave the working families tax relief tact the paycheck fairness act and the maternal care act in the moms act with the Racial Disparities that drive it. The Healthy Families act and we also need to raise the federal minimum wage to make sure everybody has access to invest in children and families headstart and medicaid. All of which invest funds into the economy. These policies work for families to date on deliver significant returns for every dollar invested in childcare a return of investment of nine dollars. You cannot find returns i got anyplace else. With the outdated policies we can and must make it more affordable to raise a family in america and together we will make that happen. Thank you. Thank you for your testimony today. Both in the house and Senate Either chairman the will be back to take over the gavel depending on how long that takes. So are you familiar with the two generation approach to reduce intergenerational poverty and to take those federal policies that already exist but to better coordinate to support the families and the emergence. A very Successful Program underway directed by one of my colleagues. Its a winwin to take Early Childhood on childhood Education Programs and matching those and tying those to programs but also in the health care sector. I know from research of parents are involved their children do better in school and preschool and they will do better if the parents are employed with more stable resources. We dont do enough thinking across programs and its a promising model. I know that is new mexico seeing groups like united way to put the pieces together to support the family. With some very positive outcomes with liberal and conservative states with politically different governments have success with this approach. And if i introduce legislation i hope to continue to push. One of the other challenges in my state and this is becoming an issue all across the country in new mexico 10 percent of children are being raised by grandparents. Historically extended families have been a part of our culture with access to our communities. And where the Family Member is the direct chair on childcare provider. And if they have access to fmla only 15 percent have access to federal childcare subsidies. That is for those who are entitled grandparents are boxed out entirely. But the grandparents are not even in the lottery so its too heartbreaking to take on the screen children so under the fmla there is a lot of debate but for sure we are including grandparents. And with that eitc. They are literally into their retirement years with fixed incomes to have the incredible burdens. I want to ask you a little bit to expand on how paid family leave impacts the presence of other caregivers and what impact comes from that. Access to paid family medical leave is a win win win. It is a true policy to give a standing ovation. Because access to paid family leave because then we see the wage gaps between women and men and moms and dads go down and the gdp will be increased to put 500 billion into the economy so to have time with children helps moms rise. And then we did note that most other countries have paid family medical leave except the United States. But some have found that dads having access is so beneficial because again when women have money to spend, in the economy were 72 percent is based on purchasing decisions then we all do better. But if we have this wage ga gap, these countries that have paid family medical leave have a bonus package if the dad takes leave then they get an additional amount because it boost the economy so much. And with retention and productivity. And taxpayers are helped out in california with paid family medical leave and there is a 40 percent lower need for snap for the tan aft because they have that bridge moment of that cost comes in as Child Care Costs more so having that access in that crucial time in a new baby arrives is very important. But also the Sandwich Generation needs the medical leave for all workers. So in comparing those places that have instituted paid family leave and those who have not, not, and an actual increase productivity. And the original research that i found many years ago much to my delight which i found out about the mom wage gap they make 71 cents to the dads dollar latina make as low as 46 cents with the same resume. We could talk about those studies with two pieces of paper the only difference one is a mom and the other is that they are not. This was a study done by doctor perrault that there 86 percent less likely to be hired if you are a mom with 11000 less. So getting rid of the wage hit with the breadwinner is so important to our families and economy. Does that wage gap persist even after mothers return to work quick. Yes. Forever so like the paid checks fairness act they cannot use prior history to use current salary earnings to you compounded wage doesnt accelerate your future history but i do want to bring this is that there is no single Silver Bullet solution we need for affordable and accessible childcare and access to affordable healthcare. We have a modern workforce they are stuck in a time that we need to bring up our workplace protections in to see the wage gap narrowed then we all win. You say there may not be a Silver Bullet quick. In the past for those that have many Different Solutions and we can independently pass these laws. It is long overdue. Thank you for your testimony. Well take a quick recess for ten minutes until the chairman return so i can go vote as well. [inaudible conversations] thank you for your patience as we are in the middle of votes im grateful to my colleagues from both houses and both sides of the aisle to share the gavel as we had it back and forth. With fiveminute rounds of questions are in my case it might be longer depending on how long it takes my colleagues to get back. At the end of your testimony that we as a society see as dignified and important work. With our laws do a better job to communicate that message if we allowed parents to draw forward Social Security benefits immediately following the birth of a child some mothers and fathers could act in such a Pivotal Moment quick. Absolutely i share the view expressed that having our lack of any solution for the time is a serious issue and having the option to do it is not inhibiting on mothers odds to be hired if you force the bill into a company its not the outcome any of us want if you pay for it out of public coffers and then have difficulty passing the bill and where will the money come from. To be well run budget neutral it is quite neutral in terms of communicating that society is with them and you are not doing this work alone. Thank you. That is a similar conclusion i have reached with if anke trump at the white house and the senator from iowa. That this is money the parents themselves are entitled to but what did the government do with that money between the time it is earned and the time they happen to retire. The belief, it is my belief that parents ought to have the option to decide to tap into that at the time they have a child. In your testimony you speak of the marriage penalties of the low income families of our tax code. And the federal government has put its thumb on the scales so what are the most important policy fixes that would help remove the anti marriage bias in our tax code or federal welfare system quick. So most of the penalties comes from the and in one on earned income tax credit and from housing vouchers the gun and comment is procedurally a fix with that eligibility if you get married but the cost is between 10,250,000,000,000 per year. Those are large numbers. So to do this we cannot afford the current level of generosity so we need to do a wider fix. Instead of having the earned income tax credit with a backdoor Family Support program with the wage subsidy to route more money through the Child Tax Credit or a child specific focus. Ay in your written testimony you wrote out of wedlock five the marriage penalty is in the tax code the only tax provision that didnt penalize them in fact so how could this family has faredd without the Child Tax Credit expansion and why is it important for the rest of the tax code to treat them . In this case what happened is when the custodial parent before marriage and she in claiming di did i miss pronounce the name i picked the most common and assigned them but her income is like 16,000 but its not enough for her to get the full refund before nonrefundable portion because it is smaller, they tend to score on the other side because they offset to some extent you cant get the same nonrefundable section so in this case it expanded and generosity when they got married because of how the nonrefundable portion interacts with they lost money getting 5,000 before and i believe they drop for virtually no benefit and at the same time some means tested benefits on the other side just to say even though you love each other and have jobs they are not making huge amounts of money that a couple making 36, 37, 38,000 there is no reason they shouldnt have the American Dream. Its as if you get married you are going to lose 10,000. We are punishing responsible decisions that i think everyone in the room thinks these people that want this its not the job to get between them and raise their children together. Thank you. Senator cassidy. Thank you for putting this on. We announced a bipartisan solution and i would say it is currently the only Common Ground im happy to report Additional Support in working with this legislative text we hope to introduce this fall. The first year is the most expensive and in subsequent years less so just context for the build the tax cut as it was discussed increased the Child Tax Credit from 1,000 to 2,000 so under the articles of it doesnt raise taxes and so we avoid that i think we heard from one when we did this and was even there is that it may actually be beneficial to the government in the theory that seems plausible because when the mother remains attached to the workplace instead of going on public assistance which has implications for the child and mother lon longterm, she remais attached to a we think that it has downstream benefits for mother and child and also extends to the parents and father but also the mother breastfeed for example, so we anticipate that women will use it more often which is why. So, you are bobbing your head affirmatively. Eu have suggestions to make it better . Im heartened to hear the proposals for the paid family leave. In a very serious way having the conversation we are having about how to fund it because that is the issue now so this is the change from where weve been on the paid family medical leave i think this is incredibly heartening. We have heard about a proposal where people can draw down from their Social Security or draw forward their Child Tax Credit. As much as i would like to support new parents i get the importance of paid family medical leave but i worry about what happens in the out years when the benefits have been drawn down. It is an Antipoverty Program and i hate to be robbing families later in childhood. We used to have a problem with overly poverty in the country. We havent completely tackled it there are eight states have passed these paid family medical leave walls. They are working really well. Its pennies per week to fund them and weve been talking to employers including small employers and they are very supportive of these laws and another are natural. That means a tiny share our imposed and they are passing these things. If you are going to do it through a payroll tax it is easier to speak of tha but just anonymous for someone more fluent but for a working family that just anonymous now i think it is Research Shows the more financial burden you put on an employer to employ somebody with a more likely they will figure out how to be productive. So i think that there is a little bit of a false narrative but there is no cost for the more generous benefit but we just raise to th raised the chit from 1,000 to 2,000 we are going to concentrate a portion of the option of the year of the childs birth but they will still receive more than they have been receiving seems to be something they dont necessarily increase with more if you increase fertility if you have whatever form it takes a Child Tax Credit the research on the policymaking is when countries spend money trying to get higher fertility rates it does cost a lot of money however the most costeffective means of bringing about some increase in this is more likely to happen if it could have an impact on childbearing decisions. There is a question if you are paying that up front the family may need that money more down the road is to make fo make frod discussion here and then they need the money earlier we spok spoke nicelyh the introduction but we do know typically people that have their children when they see will the kind of interaction that we anticipate is yes you are putting forward if you wish but if you maintain that attachment it continues to rise. There is a little bit of payback that occurs from that and also moldenoted in the first year ofs more expensive. It also would point out they will not score it as being expensive because the money is already out there thank you all for your time and i will yield back to the chair. The i had the opportunity to quickly peruse your testimony and i think youll very much for being here. I would like to start with you. Im fascinated by your research by tolerating the homeownership and a decreased homeownership do we have a policy on the wearing of fertility rate . Is that what you are suggesting . I dont know that its about Home Ownership its more about the housing costs. The amount spent on children is in fact been outpaced by price where there is solid evidence of considerable Financial Stress on families in the housing sector. They might concern i didnt focus on that in my spoken testimony because this is largely a state and local choice it is with all due respect somewhat limited so its a serious problem and there is an enormous amount of Research Suggesting the land use regulations to the price of housing especially in the rental market and in need having a negative impact on peoples ability to achieve their family desires to read this as a policy concern. The in the last 15 years the single largest increase of Household Budget has been for housing more than healthcare, more than higher education. Its masked by the fact those of us that have been in a place for a good portion of the 15 years havent experienced this and the cost of rent or to pay your mortgage has gone up faster than anything else they are confronting. Number two, this problem is contributed to by a lack of supply of Housing Stock which of course compels people big it causes more people to the homeless but i dont think either of those observations captures the insidious effect of the homeownership side of we have measured this pretty clear the 28yearold more likely living upstairs a at mom and das house and they never missed an n opportunity to point this out is in the air when definedbenefit pension plan for falling through the basement, peoples Retirement Security had been diminished and the number one asset is their home. Care to respond to my diatribe . For number one asset that many families are investing in is their home. The funny thing about owning a home, if you own a share of a company, maybe you get dividends or just a report regularly to so later. The funny thing about owning a home as it comes in the form of not getting rained on you have to buy a new roof for the Company Every so often in a new hot Water Company in hot water heater and keep buying all this stuff for what is allegedly an investment. Now the problem is when you view the home as an estimate of your goal rather than essentially a form of google consumption that depreciates come it creates an incentive to walk other people out. Essentially it says my home is an investment, so im going to make sure that my School District remains of people. Not too many other homes difficult Many Americans have bought into the story but i would suggest first offices hasnt always historically been the case. Typically you are securing retirement and have children that would take care of you and the second, this investment, the idea ultimately the only path forward is for a large number of neighborhoods in america to realize they are going to increase in the quantity so homeownership may be important in terms of security but i think its going to be in for a nasty shock. Argueargues suggesting they e mutually exclusive . There are times and places the real estate will appreciate and dont have a negative impact on anyone else its being kept off the market that the regulatory choices it is a supply issue principally a having this conversation and think the committethank the comg this hearing today in terms of economically and where we are not looking at all the measurements and get many people claim having children its too expensive. Talk about whats going on there and mayb. Maybe some of the reasr that there is some validity to that. We have to split this issue you into thinking about how people exist with the costs they face today and change expectations over time with the affordability of raising a family on the fixed expectations of what you want to get a in most areas and for most families havent gone up but over time, peoples expectations rise above that they want to deliver. You want to invest in afterschool clubs and activities and provide them with the best Quality Childcare available. So, the amount that actually spent by many families on children has risen that itselfa policy doesnt play a role in the market friendly economy and much of my research has been attempting to show that large segments particularly child care and housing costs there are big regulatory barriers that restrict the supply of such that when the demand rises for childcare or for housing its not an adequate supply response. It manifests itself a is the sae in the Housing Market through the landuse planning law which is particularly pernicious in many metropolitan areas. But entitled caret also manifests itself through staffing regulations and occupational life of things which many parents in the upper income quartiles desire that type of improved quality of child care. More interaction between the staff and children and Better Qualified staff. But when that is imposed as a policy in the state level it has the effect of raising childcare prices and forcing many of the family is out of the formal childcare sector and into the informal childcare sector where we have less of an idea. So, i guess to summarize that point, i agree that over the longterm if you want expectations, things probably have gotten more affordable. Expectations changed. And that seems over time you were spending more money on their family is coming into this certain prophecies of the state and local level which raises the price. And is there any suggestion of a policy change to help remedy that . The main point i needed my testimonymade in mytestimony, tt items or housing and childcare costchildcarecomes with a familg children, and most of the positive bigotry changes that could be made with primarily to occur at the state and local level. Level. Federal government policy can push in the right direction. I may not agree with all of the current federal subsidy programs in their existence, but to the extent we are going to have them come into conditionality, making sure that we are not rewarding the policy by distributing subsidies to areas that have very restrict supplyside. I think its something that congress men and women should be looking at. To have a comment on that . I agree. I know you only have 30 seconds here. From the historical perspective, we have to remember the change we have seen in American Families and from a stayathome caregivers to single breadwinner models to the dual breadwinner model or the single parent model and so now most are growing up with their parents or labor force and we havent come to terms with that in terms of what it means. Child care even if it were more regulated, we havent come to terms with it. Thank you. Thank you mr. Chairman. In 2016, maryland ranked fifth in the country in terms of most expensive Child Care Costing an average of 14,000. It could cost 37. Generals are believed to assembly is working to expand three k. But isnt universally and maybe foreseeable future. A positive impact on the higher income families. We have a lot of research about the universal pk and what it benefits for all children. The benefits for largest the least educated parents because it helps them catch up to its beneficial for all kids and it also is a very important step of child care for that year. But as you are indicating, universal pre k. The federal government as a Child Care Subsidy Program for lowincome families, bu but its only funded athatsonly funded f support what hes. You get the subsidy but if not, you are out of luck and that is unconscionable. As far on return on vestments, you think that is reasonable . Thick foam about th film about y comes the best quality programs eight or 9one, that will work with the program it is less than a. So, that is what we need to be careful about, proposals to equip the quality and the regulation. The two sides to that. All year around and what are some of the proposals we should push forward but are those most needed . First of all, thank you for being a cosponsor of the working families acts committed an act never suck moms rising over a million of them strongly support as well. As youve heard today, we hear from our men was about three key areas of crisis and childcare. Theres affordability, which we hear about right now, theres ts accessibility which 50 are in right now in the childcare desert no matter how much they have they couldnt find child care, and that is also excellent. So we really need highquality, Early Learning programs to make sure that every child has the opportunity to thrive. Thats where we see the strongest return on investments. Parents need safe and routine places with their parents can be so they can work and kids need safe and routine places and workers need fair pay per echo what people were talking about a moment ago from increased productivity and although productivity has gone up 70 percent actual wages have remained stagnant. What about two yearold and three yearold a combination of publicprivate looks like quick. Thats an excellent question perk a we have a patchwork approach. What we need to do is make policies like a child care for working families act and restructuring the tax bill to advance policies to allow parents to be in the labor force to make fair wages no matter where they work. Sorry we have been in and out with our votes first i want to push back on the overregulation. I know it is expensive but im from virginia i promise you every regulation there is a result of a tragedy. I have been part of this 25 years whether the quality of people we are hiring or background checks or the quality of the facility and every time a child dies we tried to find a way to put regulations in place to make it safer for all kids. Subset push back women in the workforce but yet one of the thing the committee pushes so hard for is gdp and postworld war ii miracle is always possible that so if we have pushback that women are relatively smaller percentage than they were ten or 20 or 30 years ago that is slow down economic growth. So one of the great plains of contention is the net effect. Do you see it paid attention to low income folks that are not getting married because they cannot afford to quick. Talking about the Child Tax Credit it was contained in the bill that was very important for low income families. That was a huge plus in that bill. Thank you for pointing that out in the earned income tax credit we are pushing for a significant increase especially for childless individuals. It is very important. Childless individuals are young people who are the parents of tomorrow they are the poorest age group 18 through 24 and that is the group that could benefit from the extension of the itc and noncustodial fathers are another group we been talking about the importance of father involvement we want to be sure they are involved. We do want to be evenhanded in our policies for moms and dads and to support young people on their pathway to starting families. That so many federal programs that move in the wrong direction when you get married so have you thought much how you would overcome the various marriage penalty processes beginning with the tax code quick. One thing that we hear again and again people should be able to determine who is their family and how they raise their children we heard grandparents who are involved with the Sandwich Generation. We need to look at the reality of families today we support all families equitably and equally with the tax code in Public Policies to update to match the modern labor force that companies employee us have higher returns like that 20 year study from pepperdine what happens if there are more women in leadership to make sure everyone has a chance for the long haul were here to make sure that happens. So have you put together in your comprehensive legislation for us to fix that quick. It is in the works but there is an interesting case we just heard a very large marriage penalty advance we know the eitc hurts childless people. It does it does not give equal benefit but for those tax filer filers, if both of those individual people were getting the full eitc they would be eligible for, the marriage penalty would be even larger another 5000 lost when they got married. So with childless people now the basic anti marriage provision written into the eitc we make the problem worse. This is the issue we make policy for people as they are today but lives are static if they are single today they are married tomorrow childless today has children tomorrow. Peoples life situation changes and we dont think about that we create barriers to the life that they want. I want childless people to be treated equally thats why mentioned is better through a flat wage subsidy that does not refer to Family Status at all but if we have this done when they file their taxes, i dont want it to be a situation the childless and the custodial parent get a benefit as long as they stay separate that is not a recipe for supporting any Family Status. You and andrew yang have been talking. [laughter] thank you mister chair into our witnesses for being here. I have a question to follow up there has been considerable discussion already about paid family leave but i want to follow up on one aspect. The family should not have to be making the choice with a loved one who was in need are taking care of their own personal healthcare quite crisis is great to see washington dc enact family medical leave to address this issue. We all know these programs for those that need to care for a newborn or newly adopted child or address their own health care crisis. There has been discussion of the benefits of paid family leave to Family Members but discuss how that puts the Ripple Effect into the workplace. Thank you for the question its important. We tend to stress the benefits for employees and talk about employers. They are in a tough position looking for employees in a tight labor market so to have talent and what is costly for them is more talent so when we talk about those that have these laws they say even small employers say we give people leave anyway. We have to somebody is ill or her husband has cancer the mother falls or she has a new baby we have to give them time off work. With these laws we can see they get paid and we have to pay them ourselves off of the payroll but through the social insurance find. But we also heard from employers that in the vast majority 85 percent of the time they cover the work assigning it to other employees its very rare to hire an emplacement only 15 percent of the time and only 15 percent say i had trouble covering the work so its not surprising we hear two thirds of employers that they are supportive of these laws. s when we started the survey i was nervous about what we would find. So ten or 15 percent would oppose any law so the fact we have is pretty impressive. Thats also impressive in what i have been hearing as well. The other thing to touch on , is the issue of businesses being more skilled workers. What we also here are individuals who have fallen out of the labor market entirely with the jobs they are open to face barriers of transportation and childcare. And then to have the gateway to careers and to help individuals navigate barriers to keep them for one from participating. So do you think we should do more to Access Services they are already eligible for to respond to issues they face outside the workplace . The work i have done how families spend their eitc they face high transportation and childcare costs. So interviews for durable goods or furniture in the family or a housing situation or to pay for work expenses. So anything you can do on that front would be fabulous. I agree. Thank you for putting forward the bill. Three things need to happen. We need better and fairer wages me to update the updated policy and they need to be comprehensive. Talking about paid family medical leave to not only cover new parents but significant serious illness of a Family Member. Thats the majority of the time fmla is used. We want to make sure that is happening progress we update these outdated policies dont want to drop one to pay another they are already stretched. What hasnt come up is wealth inequality. I mentioned earlier we had a 70 percent of productivity but wages have remained stagnant. That puts us in a situation one mit economist has said we are leaving a third World Economic model to implode the middle class little class we need to have comprehensive policies. We also need to make basic necessities including transportation more affordable for families. We dont have a single one solution whats happening in the United States of america right now that america is in crisi crisis, families want to do best for their children. I am so thankful that you hear today are looking at this from multiple angles as well. Were always happy to accommodate those Board Members that show up is critical to have that participation me will do a second round in your testimony you explain some childcare regulations that affect the job Care Industry reduce the supply to drive up prices and reduce the rate of formal care options for families. A new law in washington dc when it becomes fully implemented over the next few years requires childcare providers to earn degrees a twoyear postsecondary degree or a certification. This of course has an impact on supply and price. Expensive market based childcare is a widely recognized financial burden for working families. 64 percent of those respondents said they expected to have fewer children. Fan they considered ideal in part because they believe childcare is too expensive. To what extent are they responsible for Child Care Cost difficult to disentangle so that childcare in the market economy as people get richer former childcare is very laborintensive. And for the big structural reasons there has been a big increase in demand for formal childcare. So it is a safe and loving environment from them to have very high Quality Childcare. If you look across states and areas of the highest cost of childcare, they tend to be the richest states that feed into the idea that prices are income elastic. There is a lot of economic evidence that regulations of childcare workers, in particular and occupational licensing requirements do raise costs pretty substantially. There has been some Academic Work if you are relaxed across all age groups by one it would reduce by 10 percent. But these regulations are regressive what they did was look at comprehensive data and what we found the ratio regulations in particular had no effect but what is did do was driving the cost of care to live on lead to closure that lack of availability led to much greater use of home data. There is a massive tradeoff measures that people say improve quality and improve interaction time. So they really have no idea in informal care. So the big tradeoff parents want and desire these regulations anyway but they strip away the lower income families to select a different price quality bundle. And that has nearly the regret effects for the labor market. Other than childcare reforms, what are your other favorite policy reforms to significantly lower the cost for low income families quick. The biggest expenditure is housing cost. And as i outlined the key driver in major many cities tend to be associated and i dont think we can get to the support of the issue without tackling that problem. Primarily a state and local issue but that said, the federal government through the Community Block grant does give federal subsidies to states and localities to the extent they come without conditions of the supply environment to subsidize bad policy. So to look at this to make sure states and localities have a positive step forward and i also think that with the rise of rent control i would like to see federal policy that precludes policies which damage supply forever. One does have to be careful how far to intrude. There is a response locally that we try to treat that remedy with another federal remedy. My time for this round is expired. Thank you very much in light of the context of years of stagnant wages. It is underlined to the foundation of all these issues we deal with. For purposes of discussion and three different buckets in which the federal government could take action to affect peoples standard of living and ask what is the thing we ought to do quex the first is a predicate. And to those that are really pen on pinching people with housing and child care and healthcare or the eit c. In bucket number two we can adopt those policies which lead to higher wages for some and increase minimum wage. More robust collective bargaining laws. Thats bucket number two. Number three is the broader issue. In the spirit of disclosure my favorite the Federal Reserve has pursued a policy which has suppressed wage growth. In fact in the last ten years only two months the labor supply increased by more than the replacement number. So we really havent had an approach to the cost of money which truly gets us to full employment. They keep changing their definition of full employment. They keep lowering it and as a consequence we have had very slow wage growth. Im also reminded that one of the chairs of the Federal Reserve once said is my favorite observation that recovery doesnt die of Natural Causes they are murdered by the fed. We have three buckets. Im interested in knowing from each of you quickly as an organization, let me say were so proud of the work you do. But one thing to make a difference, what would it be quick. Thats a tough question. We have to answer tough questions all the time. I am sharing the pain. [laughter] thank you. I would do all three. That is because i know that we can do more than one thing at a time. What we should not do is cut quality because we think that will cut cost per i want to make sure we look at the fact the return on investment on all of these programs go up when we have increased quality we look at the roi going up. So we really need to make sure were not cutting quality or care and moving forward wages. I am all three. [laughter] of course i will say all three as well we should have higher minimum wage and stronger bargaining weight on rates. But if you could choose one quick. I will come back to universal child allowance because with these forces sweeping our economy children should not be suffering. So we have not talked about the instability and the unstable jobs their work hours change from week to week the earnings change so how do you pay for housing and childcare when your earnings are changing week to week quick so what you have to do as a parent is worry about money all the time. So what impact does that have on your family life or your children clicks i think children ought to be protected why we sort this out. The Child Tax Credit is a Fabulous Program but anything you can do to expand that to make it more families with more universal i think thats all we ought to be doing helping families with kids making info on more affordable to raise a family while tackling the big challenges. I will reject the premise of the question there is a fourth approach to look at why are the cost so expensive in the first place . And try to expand the supply side to make goods inherently cheaper. To negate the demand for more in the way of federal borrowing subsidies and price and wage controls. A lot of the programs we have mentioned could alleviate but given the fiscal conditions and the limits of what you can achieve through a tight labor market and the risks associated with right on wage and price controls the principle the first do no harm it is a much better and fruitful approach. Im going to take the question in the spirit of congress we should take the eit c and replace it with a wage subsidy that does not discriminate on family structur structure. It currently has a baked in benefit for children. We dont want to lose that. And because we have to pay for it pay with a nominal gdp fed that will pay for by growth. It in your testimony you submitted to the committee that declining marriage rate for half over the last decade and basically all of the increases of 2000. Is that right quick. Thats correct. Why are marriage rates declining and what can be done quick. I dont want to live in a country of a nanny state to incentivize people. But i also dont want to live in a country where the government is this incentivizing or creating an environment on what we might be doing their. So the idea of the fertility gap is rising but not because they want more and more kids but it is falling and her odds and for working class people with a higher degree feel the same way they always did. This is a Class Program as a cultural shift may be they are more likely to be exposed to extensive marriage penalties which then brings us to the worry of the nanny state lecturing you about getting married. The grandma state. [laughter] nobody wants this. Nobody says i wish the irs to give me advice to marry my girlfriend. Luckily this is not what we did on what we need the problem is the marriage bill then we need the first step to create a commission of some kind to study where are their marriage penalties and identify where they occur to come up with a way to rewrite the eligibility benefit rules so we still spend the same amount of money on the same income range of people but in a way that does not discourage family formation. This isnt lecturing anybody or pressuring anyone to do anything they want to do but we made a mistake. They were not designed for a modern world where women are working so that eligibility threshold does not double yet Serious Problems after that study we need a rule whenever we score a bill that scoring process has to include with a checkbox does this create a marriage penalty . If it does it would be nice to know its not a hard thing to calculate. Having Forward Guidance as we go forward if theres ever a new bill then it should be scored does it create a marriage penalty. When you explain it that way its easier to understand how that could happen in nominal terms the size of the penalty may be smaller with the couples but in relative terms if you think about what it does to the bottom line of families the sweet spot makes a difference that could have a big impact on behavior. Doctor, went to follow up on something you mentioned. So the study in which you show them motherhood wage gap has declined and in some cases replaced with wage premium. Emily stating that correctly am i stating that correctly quick. Is it fair to conclude that affordability crisis is driven by a motherhood wage gap or are there other factors in play quick. I was working on that for a long time more than 25 years ago when i was 12 yes. [laughter] thank you for that. I was a prodigy. Women could not take a job protected Maternity Leave so they would have a child without enough time off to stay home with the baby so they would leave their job and come back a few years later and start at the bottom of the labor market. It took ten or 15 years to get back on par with those who did not have children so fortunately we live in a world although we still dont have paid family leave so that penalty has narrowed that not as bad as it used to be other things have happened in the labor market women are now getting more education than men. And those that take a hit. So yes things have changed over time. I just want to follow up talking about the lowwage cat being low were those 2018 numbers on the u. S. Census data moms are making 71 cents to the dads dollar but overall they are making 80 cents fulltime yearround so that motherhood gap is significant and very strong. Looking at solutions, we need to address the fact is not just married or unmarried or the type of family that impacts the affordability of raising a family that wage discrimination is compounding by Structural Racism and those that experienced the most wage discrimination. With a single dad but we need to look at pay Parity Solutions so 54 percent of the millennial population were unmarried women and those that do have children by the time they are 44 years old so the solutions are not going to work. We need to make sure that the solutions we create for all of working america and we dont replicate those inequities of the past. So to emphasize there is Extensive Research there is rigorous data that shows in all of these countries in fact it has almost no correlation for childbearing or motherhood its almost the local and social norms that may be part of it but the policies to advance we should justify them in terms of whats good for families and not convince ourselves that by giving paid leave to convince ourselves to eliminate pay gap that exist that are far more generous than anything we are talking about. So these differentials are much harder to correct than what we convince ourselves of and political discussion. They are worth doing because they are good for kids but they dont actually address the pay gap that is a problem that almost no country has a solution to. So keep in mind when it is possible to achieve to make sure we dont make promises for those that we are trying to help. To come back to the marriage question i just want to say my colleagues was at princeton now has done research about why it is low income families are postponing. She tells a compelling story of young men and women to obtain a foothold before they can get married. Before they complete their education have to have a decent job, they cannot get married until they are stable on their feet. And the uncertain Work Schedules im all for getting rid of the marriage penalties but we should think about the other things that hold people back from marriage. So its no wonder that they have a stable place to live and it is to improve prospects. But the most pressing challenge. On with that part of behavior with that degree to lead to any significant change because first people have very different benefit systems with the fertility rates so with their preferences as we get richer but second the median age for marriage for women is much lower than countries such as france and sweden but they have higher rates. So this is one area i question how much of an effect tax and benefit policy really has on this issue. Thats an interesting point. It is under one. Eight obviously that does not take into account the overall population. But when i think the programs like Social Security, it begs the question what are the longterm consequences depending on immigration policy . I suspect there are potentially serious implications. Would you care to enumerate quick. It would be easier if any longterm planning agencies like cbo if they bothered to do a simulation of a fertility rate below one. Eight even to consider as possible in the most recent update in the actuarial soundness is one. Eight it is one. 72 right now and falling so it is the worstcase scenario we have prepared for. The census forecast overestimated the first year by 350,000 people of population growth prickle that is a big mess. So we should probably force the forecasting agencies to make sure at least the first year of numbers is correct. Let alone to get more accurate on the out years. Now given that we are not prepared for that demographic shift, there will be significant consequences. There is an article in the wall street journal a few weeks ago about Older Americans who bought affordable houses nobody is buying them right now. Let me just interject something. A lot of those people want to downsize. And there is not a sufficient housing supply that they can get into. There is a problem on both sides prickle they cannot sell it because there is not a market to buy it and then the house they want to move into does not exist. We think about Social Security as intergenerational transfer thats the entire economy. If you own stock in a company that makes hot dogs there is going to be a kid to eat the hot dog to have any value. But our stock market is open to foreign investments. So we buy goods for a country and invested into our security which is a nice handout as americans get older but on some level it needs to be nextgeneration to protect the value of the asset. The longterm consequence of low fertility is stagnation a permanent slowdown of economic demand and productivity is growing but wages have not its better than it has been in japan. One reason is there has been no population growth in the market size or no plausible story were investing in japan is wise because there is no growth. See you get less entrepreneurship, innovatio entrepreneurship, innovation, ls Sustainable Public finances. What we call it is very few achieve it. It is not well set up to handle we are facing a very serious issue down the road. So when we think about low birth rates i care about peoples individuals desires. Have three or half one. But on some level you need a society that needs growth in the market. However fertility rates are falling. Beyond that more countries like japan are aging to say we need immigrants. And there is more competition. The net migration rates have been falling for decades. Regardless of policy. So we can tell that it will lift our fiscal boat. It wont. Not always. Thank you for being here today. And with an Outstanding Exchange now we will turn for a moment as we do we will keep the record open for a period of three days we stand adjourn. [inaudible conversations] [inaudible conversations]
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