I only take the time to comment on this piece in Bloomberg (“The Hidden Cost for Stay-At-Home American Parents”) because I see many opinion pieces on this topic that are so poorly thought out and written, and they are rarely challenged for the shallow analysis that is presented.
The writer, Michelle Jamrisko, has cited a report that attempts to quantify the costs to a family when a parent stays at home to care for children. And this report is presented without introducing the qualitative aspects of having a stay-at-home parent, a decision that is subjectively determined by the participating individuals so that they may add more value to the family life than a paycheck, missed potential raises, and retirement assets (which are already based on the flawed conventional wisdom of a constant value or always-increasing stock market).
The decision around whether to go back to work after having a baby — and pay for childcare — is already difficult. American parents can now add another stark financial figure to their calculations: Each lost year of employment could cost a family more than three times a parent’s annual salary. *
They’re missing out on a regular paycheck, but also the opportunity costs including lost wage growth and retirement assets, according to a report released Tuesday from the Center for American Progress.
“Given the importance of parents’ careers in ensuring financial stability for their children, it’s a sign we’re not thinking through childcare as an economic problem when parents are deciding to take time off or not without good tools to see how it affects their incomes,” said Michael Madowitz, co-author of the report and an economist at the liberal Washington-based research institution.
This article presents the stay-at-home-parent family as a robotically-inclined one where the parents have not intelligently quantified all economic costs, including opportunity cost and future lost incomes that are, in reality, based on multiple fallacies. The lifetime economic loss quantified in this overly-simplistic scrutiny does not take into affect the base skill set of the stay-at-home parent; the potential earnings power based on that skill set, motivation, and work ethic; the ability or desire for the parents to save for the future; or the costs of childcare and part-time parents for a working couple, and how those costs impede the ability to save for retirement even if they desire to save.
The author brings up opportunity cost without bringing into question the opportunity costs of not raising your own children and instead allowing strangers to play that role 40+ hours per week while the parents come home for a few hours at night to scramble to keep the household in order. But mostly, the article never once takes into consideration why a parent chooses to stay home with their children – reasons which are mostly qualitative and based on the subjective preferences of the parents and the lifestyle they desire for themselves and their children.
Since a report by the Center for American Progress was the focal point of this article, one only need to take a slightly deeper dive into the story to understand that this is part of an ongoing plea on the part of the Left to obtain welfare - government-mandated benefits – for women who have children so they can get paid to stay home, or allow them to opt for government-subsidized (“affordable”) child care. In short, these reports and studies and articles are contrived to build mainstream support and drive political legislation for economically-dependent families that will be forever on the dole.
The view set forth to support the notion of family welfare for all is that parents are not capable of making decisions about caring for their own children because they have not used the appropriate conventional (flawed) models to quantify staying at home vs. choosing a paying career. So therefore, government should step in, and, if a parent does choose to stay home, there should be child care welfare provided so that family does not have to rearrange their priorities, or lifestyle, based on what is important to them.
The left is not at all concerned about why parents leave the workplace to have children or the vastly improved quality of life that these families benefit from by having a parent remain happily on the homefront in a full-time role. Left-wing institutions and special interests are only concerned with enlarging their constituent base and moving forward with their anti-family, welfare-based agenda.
Just for fun, I plugged in my own numbers into this interactive graph to determine my “economic losses” had I missed out on my career to care for children at age 30. My “losses” went into the many millions of dollars, with one component hinging on the “security” of government benefits and financial markets:
LOST RETIREMENT ASSETS AND BENEFITS: The combined losses from missed 401(k) plan contributions while on leave and the lost growth of those assets until retirement and reduced Social Security benefits.
This is in spite of the fact that current statistics show no or greatly reduced savings on the part of the baby boomer generation and beyond.
* In spite of the article reading “more than 3 times annual salary,” the report from CAP reads “up to 4 times annual salary…” So which is it, and how do we know that? This is the numbers game, with numerous institutions and associated special interests intentionally citing hollow sound bites as factual statistics because it is known that most readers will process and believe exactly what they read.