2021 Year in review
This blogpost is written by our co-founder and CEO, Siran Cao.
Have you seen the meme “The Manch Who Stole Progress?” If not, a description: it’s a picture of West Virginia Senator Joe Manchin’s face, photoshopped into the poster for The Grinch Who Stole Christmas. This made the rounds on the Internet, because Manchin killed a bill that was, in effect, the New New Deal as it stands today. That bill had new policies for climate, paid leave, childcare, eldercare, hopes and dreams. So yeah.
The meme is kind of funny. Not “ha ha” laugh out loud funny, but the kind of funny that you feel with a sigh, recognizing the cleverness and hating the reality that makes it “kind of funny.” That’s the feeling that represents this year – a sigh, because we were SO CLOSE. Hot Vaxx Summer. Voting rights. A more normal holiday season. The most transformative investment in children and caregiving in generations. All so close.
But it’s not all doom and gloom, promise. Nancy Pelosi isn’t going down without a fight, and there’s still a chance for universal Pre-K in 2022. Biden could still push through portions of the agenda contained in the bill piece by piece. Other events this year carry that same potential. They just need our attention and our voices. Although COP26 didn’t deliver commitments that would limit warming to 1.5 degrees, it did, for the first time, call explicitly for phasing down coal and fossil fuel subsidies. COP26 also produced, for the first time, commitments that recognized how protecting and restoring nature is critical to tackling climate change. There is reason for hope, reason to continue to agitate for change.
We’ve had a lot of reasons for hope at Mirza. In 2021, we were lucky enough to have two of our first interns, Heather and Ana, join us as full time employees. And we added six other incredible, mission-driven people to our team. We gathered in person for the first time, and got to focus on our future–our work and the kind of company we want to build. We released our beta and had incredible conversations with many members of our community to understand what you need in a non-beta, big kid product. We raised a venture capital round, backed by investors who believe that fintech can center care and caregiving. And from the center stage of one of the world’s largest tech conferences, we spoke to tens of thousands of people about how care is the future of work.
Mirza at Web Summit 2021 - one of the largest tech conferences in the world.
Okay. We did the thing that’s expected from these “year in review” blogposts: listed stuff we’re proud of, made references to events, talked about why there’s hope in the new year. But I started this note referencing Build Back Better, and that’s just not something we can leave in 2021. This year has been one punctuated with headlines about childcare and how it’s broken; how millions (1.6 million, to be exact) of moms are being driven out of the workforce or hanging on by a thread, because the lack of care or the demands on homeschooling create untenable burdens for the already stressed parent. And if you’re reading this, or follow us, you probably care about women, families, and care. So I’m pulling a bait and switch, and I’m going to talk about why we are going into 2022 demanding the revised Build Back Better get signed into law. And I’m only going to talk about one single piece of it (childcare), but trust me, we need the whole package.
Childcare is a broken market
The laws of supply and demand regulate the markets of our day to day lives. At least, that was our foundational understanding in the early days of my career at Uber: that willingness to pay and availability of goods and services reach an appropriate equilibrium for everyone. Remember the good old days of surge pricing? When it would rain, you’d see a big red “2X fares” and wonder just how bad the L train could be. Market forces at work! Our world has changed dramatically since then. 2021 has brought about a reset for many old equilibrium points: from the macro labor market, where workers are finally stepping into their power to advocate for better wages and working conditions, to my old workplace, where this new higher Uber price seems to rattle much of my Twitter feed. Yet that same Twitter feed is chock full of disengaged simians, and the multiples for these NFT avatars on the secondary market indicate far more complicated forces at work than the rational pricing theory of willingness to pay meets willingness to provide goods or services.
And then there’s a market that was plagued by supply problems pre-pandemic, and whose supply has been decimated by the pandemic: childcare. Most American families now rely on all available parents working to make ends meet. 4 in 10 moms are now the primary breadwinners for their families, and 2 in 3 US mothers are co-breadwinners, bringing in at least a quarter of their family’s income. And yet, the costs of care for the 12 million children under 5 are backbreaking for the family budget: a 2019 Child Care Aware report found that millennial families spend between 18 and 42% of their income on daycare. The average childcare cost for toddlers is roughly $10k per year, higher for infants, but very little of that actually makes it to early childhood educators and care workers. These educators, mostly women and often women of color, provide nurturing learning environments during the age period that accounts for 90% of a child’s brain growth, and they’re earning poverty level wages - on average, $13.50 an hour. The complex regulatory environment (think 3:1 ratios of educators to infants, fire safety regulations) leaves razor thin margins for providers, even at price points that are outright unaffordable for some, and untenable for most. The pandemic has wiped out many providers, but even pre-pandemic, half of us lived in “childcare deserts.” So here we are, a broken market.
How Biden wants to fix it
That’s where Build Back Better (BBB) comes in. It holds the framework for transformational investments in care. BBB fundamentally reshapes the childcare market, addressing the reality of the core problem: the high regulatory burden and care-intensive nature of the work means a high cost burden is just table stakes.If we want to ensure educators earn the wages they deserve, the real price tag for childcare is going to be higher than what’s in the market right now. And unless we boost the ability to pay for households with childcare needs, there is no equilibrium at which supply and demand meet, except for the wealthiest families. I’m pretty sure none of us want to live in that reality, so let’s talk about how BBB reimagines this market.
The headlines: 9 in 10 families will get lower costs of care, with improved quality; providers get living wages and investments to improve quality and expand supply; universal pre-K for 3 and 4 year olds will create a more equitable start for kids across economic backgrounds; and families will have much greater choice in the best care for their children, from home or family-based for cultural sensitivity, to center and school-based for building social skills and community.
How would it work? States have to opt-in, so it’s likely we see a patchwork result with red states not taking part. States are responsible for building up the supply for quality care, and mostly federal funds support the cost for families. The “real cost of care” is also determined by the states, with each state required to set those rates, determine standards of care, and the copayment levels for families based on median income. Families earning under 75% of the state’s median income pay nothing, and payments are structured based on earnings from there. Families earning under 250% of the state’s median income would not pay more than 7% of their income for childcare, covering most families of four earning under $300k a year. In practice, this would be like having a copay with health insurance: any copay from families is paid directly to providers, then the government funds cover the remainder of the real cost to providers as well.
Transformational, right?
Imagine paying at most 7% of your income for childcare - for high quality, caring early childhood education. What that would mean for you, for your family, for the millions of families in America. Mel and I talk often about our goal to “change the math” for caregivers and “change the math” around care. That’s not just because childcare is expensive, and our culture defaults to “mom’s earnings” being weighed against that cost. It’s hearing the things that make you cringe, but behind that cringe is how that thing is rooted in reality. Have you heard those things? Having a daughter is the best insurance against winding up in a nursing home. Cringe. But it’s because daughters often take care of their parents as they age. Motherhood is the biggest risk factor for poverty. Cringe. It’s because social security doesn’t count our unpaid caregiving work as work.
And at the same time, families who can afford childcare wind up paying Black and Brown women for caregiving - just far below what that work is worth. (See, for example, Starbucks paying more than what childcare educators earn.) What I’m getting at here is that we systematically undervalue (or do not value at all) caregiving. That’s why I’m so excited about BBB from a core values level. When there are mechanisms in place to ensure caregivers earn fair wages, we are finally putting the value on care that it deserves.
So as we bring this deep sigh of a year to a close, please end it with us on this hopeful note. We can’t let something so transformational–on a societal level–slip away, and we won’t.
What you can do:
Call your Senator and ask for their support for affordable childcare, universal pre-K, family care, and paid leave.
Support Chamber of Mothers as they organize to fight for what all parents + caregivers need.
Get ready for this year. We need it to be transformational.
