Tuesday, January 26, 2010

With Children, Working Can Cost You

A Washington Post columnist reports that she is losing money by going to work, because child-care expenses are so high:
There is the familiar narrative of low-income parents who figure out that it pays more to leave the crummy, minimum-wage job and collect welfare at home than to get child care. And often, when they do work, they deal with substandard child care, erratic work schedules, no sick days, no health care and a host of other horrors.
While the columnist goes on to conclude that quitting in this situation may be short-sighted for long-term career advancement, it does seem to make sense for those in the lowest-paying jobs. In addition to being better off financially, they have more time to spend with their children and don't have to work a stressful job. While welfare has its purposes, this is a keen example of its distortion on incentives.

The solution? Another government program:
One possible solution might come with President Obama's proposal this week to double the child-care tax credit for families earning less than $85,000 and to increase federal funding of programs by $1.6 billion.
So, to encourage people not to abuse one government program, another government program is required to artificially hold down the cost of child care, at the expense of childless taxpayers.

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