Child Care is Core to Economic Growth: We Must Commit

Last week, I had the honor of addressing the 250 women and men gathered at Child Care Aware of America’s 2022 Symposium in Arlington, Virginia.

Their theme this year: Unite, Disrupt, Transform. I think "unite" is where we lag the most. Post-pandemic, new ideas are pouring in on how to reshape our care systems. But if we can’t unite around real action on something as simple as fantastic child care — taking care of the future of our nation — we don’t stand a chance.

I believe this message must travel far beyond those already convinced that our economy, our companies, and our families will be wholly better off if we finally address this critical need.

So, below I share my speech.?

This is not a political issue — it’s a human issue. Improving our care infrastructure for all working families — to take advantage of the promise of America — is within our grasp. We just need to commit to it. Together.

Child Care Aware of America Symposium — Delivered May 2, 2022

My case today is very simple.

I believe that this organization — one that researches and advocates for better child care policies in America — is dedicated to one of the most important economic issues of our time.

Now, I realize that this is an extraordinary claim, particularly when our economy is going through multiple other challenges.

But, as they say, "extraordinary claims require extraordinary evidence."

So let me start with just one fact.

Here in Virginia, a single parent earning an average salary can expect to spend more than 85% of their income on center-based child care for two infants.

In many states, that’s more than people spend going to university.

And the alternative — taking time off work — can have an even greater cost.

Only 1 in 5 workers in the US receives any paid leave. Among lower-income workers, it’s 1 in 20.

And I believe this is a major economic handbrake.?

Because it means that millions of people — particularly women — are held back from work, and in work, by barriers to integrating work and family.

Of course, for most of you, this is not news.

You are at a child care symposium!

I know that you know this.

But here’s the problem: time and again, our leaders have failed to recognize what’s at stake.

They talk — almost daily — about how the economy affects families.

They worry about house prices, fuel costs, employment rates. And I know all of these are very, very important.

But we rarely hear about how families affect the economy — the obstacles that parents and caregivers face at work, and the struggle of competing obligations.?

Care, too often, is seen as a fringe social issue.

Now, because of the pandemic, everybody is vigorously talking about "the future of work."

But on the whole, all of these discussions are consumed by robotics, artificial intelligence, automation, and re-training.

I believe that family — as a theme in global progress — should be up there with technology and sustainability as a critical economic issue.

I was the CEO of PepsiCo for over a decade.

And I had a front row seat to the inner workings of business for almost half a century.

And if there’s one thing I’ve learned from my life and career, it is that enabling families is critical to prosperity.

The way we accommodate child care, and time for our loved ones, is both the greatest challenge and the greatest economic opportunity of our time.

As my friend Anne-Marie Slaughter put it:

This is "unfinished business."

So today, I want to talk about why the crisis in care has been so overlooked until now — and what exactly we can do about it.

A defining issue

I say "until now" because the Covid-19 pandemic was, for many of us, a wake-up call.

Parents — both moms and dads — needed to work.

And when their child care routines suddenly and dramatically ended, we all felt it.

Thousands of child care facilities closed.

And many of those two million women who left the workforce have not returned.

I think this has served as a wake-up call to many — including many employers, politicians, and future parents out there — who now see just how tenuous the relationship between work and family is for many, many people.

Even now, many parents — particularly women — are working longer hours under enormous pressure and mental stress.

They are asked to be ideal employees… with no competing obligations, to work hard and to build a fulfilling career.

They are asked to be perfect parents… putting their family first, never missing a school play or a swimming lesson.

And they are asked to be model citizens…helping friends and neighbors, playing an active role in the community.

It’s no wonder so many working parents, especially women, are burnt out.

The toughest job of all is to be a single parent.

According to the Pew Research Center, 23% of children under the age of 18 in the U.S. belong to single-parent households.

Around 80% of these single parents are single mothers. And most — around two-thirds — have no choice but to work, either full-time or part-time.

The reality is that families are incredibly fragile and messy. We must figure out a way to support them.

High-quality child care — giving kids the love and support they need — helps them grow up to become better citizens.

The evidence shows that early childhood — our education, our families, our access to play and learning in those first, crucial years of development — is one of the biggest factors in determining outcomes later on in life…from future health, wealth, and happiness to things like lower crime rates and greater empathy for others.?

In the book, Cradle to Kindergarten, Ajay Chaudry, Taryn Morrissey, Christina Weiland, and Hirokazu Yoshikawa write:

"Early care and education in the United States is in crisis...family budgets and routines have been stretched beyond their breaking point. Too many children are getting overlooked during their earliest years… in a nation with ample resources to provide good opportunities to all its citizens, we are burdened with a system that creates unequal sets of experiences among our youngest children."

The pandemic threw a light on this crisis.

We can’t let that realization fade.

And your cause — more and better child care, for all families, in every state — is one that I passionately believe in.

In fact, I’d say this issue is very personal for me.

Because after a long business career, as I wrote in my book, I am trying to focus on care, as a whole, in this next chapter of my life.

I had a great run as an executive and am very proud of all we accomplished when I was at PepsiCo. It’s an enormous global company, with a quarter of a million employees, and it was a great economic engine.

But, in my life, I have been most fulfilled by my role as the mother of two incredible daughters, who are now grown women with their own careers.

I know these twin accomplishments would not have been possible without good fortune when it came to care — including my super engaged husband as well as my mother, in-laws, aunts and uncles, assistants, neighbors, and nannies who helped along the way, and of course, my children’s committed teachers in wonderful schools.

Sometimes it does take a village, and a few from the town too.

And I was also lucky to have a few bosses — all older men — who relentlessly insisted on helping me out.

Steve Reinemund was my predecessor at PepsiCo. He was the CEO of PepsiCo when I was the company’s president, and would often offer to pick up my younger daughter from school when I couldn’t do it, or when I was busy with my older daughter.

I will be forever grateful for that support and for the love of my family.

But I do not take for granted that thousands of people in America — whether by choice, or by heartbreaking circumstances — have no family or support system at all.

Enabling more women in the economy

I’ve seen, firsthand, just how vital our care ecosystem is to economic development.

And, while this issue certainly belongs to all of us — including the men in the room — this really is about women, and the reality of who we are in the 21st century.

When I left my role as CEO of PepsiCo in October 2018, I was asked time and time again why my successor wasn’t a woman.

This was difficult for me, and I took this question very seriously — despite the fact that nobody asked the retiring male CEOs the same question.?

I knew part of the answer — that any woman with the experience to be a CEO in corporate America is still such a rarity that PepsiCo’s well-trained cadre of women leaders had been hired away to run other companies earlier in their careers.

And I couldn’t fault any of them for leaving — the competition for my job was severe, and there was only one seat.

I had done my best to mentor them and to create an environment where rising female leaders could progress. And I was proud to see them fly off on their own.

But there was more to the problem.

I started looking at all the research on why so few women succeeded in making the tough climb to the top.

I realized that it wasn’t just a matter of a "leaky pipeline."

It’s far more accurate to say that the pipeline is completely broken.

In 12 years at the helm of PepsiCo, I met many, many associates who shared details of their lives with me and who confided that they were worried about how to be true to their families, their jobs, and their communities — even those who were not looking for a competitive path to the next level but just hoping to do well, earn an income, and live comfortable, happy lives.

Their stories had a great impact on me, because I realized that families are such a powerful source of human strength — but also a source of stress for so many.

At the same time, I was also among a vaunted group of global CEOs who were regularly invited into rooms with the world's most influential leaders. And I found that the people with real power — who are almost always all men — never talked about family as a driver of global progress.

They didn’t dive into the intricacies of women’s roles in the economy, or discuss how to support young family builders, or how to ensure we have thriving populations going forward.

The titans of industry, politics, and economics talked a lot about advancing the world through finance, technology, and flying to Mars.

In those rooms, family was fringe or non-existent.

This is one reason why care has been relegated to the shadows for so long — because it simply didn’t factor into these decision makers’ worldview.

Because that view was still defined by the ‘ideal worker’ of the 1950s — a male breadwinner with someone at home taking care of… "all the other stuff."

The top of the agenda

Now, in the arch war for talent — particularly in today’s tight labor market — smart employers can no longer ignore this issue.

Each year, voluntary employee turnover costs US companies $1 trillion. That’s roughly the GDP of Spain.

Companies need to attract the workers who are steering clear of the paid labor force because combining their lives and livelihoods is so difficult.

That brings me back to 21st century women — including many of you working on this issue — and the women who are working in daycares, on the frontlines as essential workers, in medicine, law, the arts, and business, and everywhere else.

We have never seen a female talent pool like the one we’re seeing today.

Women are the top performers at universities — graduating at a rate 10 points higher than men. Women are 70% of high school valedictorians. They make up almost half of the class at MIT's School of Engineering.

They are ambitious, and they are driven by the need for financial freedom and economic independence.

And they are also still the people who give birth and handle most of the unpaid work at home.

The Care Trifecta: Paid Leave

So the question is: how can we begin to change the national conversation… to start making a meaningful difference for our economy and for our families?

By addressing the care trifecta.

First, paid maternity and paternity leave.

We all know that our country is the last developed economy on earth not to mandate some form of paid parental leave.

80% of all private sector workers don’t have it.

And for low-wage workers, that number goes up to 95% — even if someone has just given birth.

A good starting point would be at least 12 weeks for a primary caregiver and 8 weeks for a secondary caregiver.

We can discuss the exact parameters, but this would be a feasible baseline for almost every company.

I’ll be honest with you: paid leave is what made my own career possible.

Back in 1982, when I was a young consultant just entering the Boston Consulting Group (BCG), my father was diagnosed with pancreatic cancer. He was given 6 months to live. We brought him to the US from India in hopes of finding a cure. Unfortunately, there was none.

My husband was in graduate school and we didn’t know how we were going to make ends meet if I quit my job to take care of him. One day, I got a call from the head of the BCG Chicago office, Carl Stern. He offered me 6 months of paid leave to take care of my father.

In those days, the phrase, "paid leave," barely existed. And I had never asked for it because I didn’t know how to — I was new to the job.

Recently, I asked Carl why he gave me that paid leave. To this day, he says it was a "no brainer," and "it was the human thing to do."

So, I am a product of paid leave. And I think it’s time we addressed this issue for everyone.

The Care Trifecta: Flexibility and Predictability

The second part of the trifecta encompasses flexible and stable work hours.

Even after maternity or paternity leave, parents returning to the workplace will still have very young children. You can’t leave a 12-week old child alone at home.

They need to be able to balance work and family, or will pause their careers due to their newfound caregiving responsibilities.

And if they choose to take a break, that’s fine, but we need to create return ramps, so they can seamlessly transition back into the paid workforce when they’re ready.

Flexibility — sensibly thought through — should be the norm for white collar workers. We should also think about predictable work hours for frontline workers who don’t have the option of remote or hybrid work. Everyone deserves the dignity of being able to know when and where they are working.

The good news is the pandemic has accelerated progress on this issue — and there is no going back.

But we need to think carefully about the hybrid work model of the future to make sure it lives up to our ideas of inclusion. Otherwise we’ll have a new, gender-based divide in our workforce.

The Care Trifecta: Care Infrastructure

The third part of the care trifecta is the entirety of the care ecosystem — what you all are focused on.

This is absolutely critical to advance our economy, keep women in the workforce, support kids, and, frankly, keep up with the rest of the world.

We have to figure out how to provide comprehensive child care for families with children ages 0 to 5.

Right now — as you know better than anyone — our child care system is a complex mesh of private nannies, daycare centers, and the occasional summer program.

It’s more lottery than level playing field.

We have a lot of work to do to ensure we have available, affordable, and quality child care both during traditional and non-traditional hours.

We need licensing and training programs for staff and caregivers; and wages that reflect their great responsibilities and awesome capabilities, and incentives to get young people into these jobs.

And this involves companies, too.

On-site and near-site child care for working parents is a game changer. We did it at PepsiCo, and the benefits were immediate and lasting.

Again, the evidence is watertight: countries with comprehensive care networks benefit from more women in work.

Child Care Aware of America, and all the campaigners here today, are doing brilliant work in this area.

You have such a breadth of ideas about the role of the federal government, state governments, early childhood experts, and more.

We just need to move these ideas to reality — not slowly but at an accelerated pace.

Conclusion

The task of imagining our future is never easy.

But as a business leader who has designed and led massive transformation, I know that we can change our companies and communities.

We can create more inclusive, supportive, productive systems for our economy. It’s within our grasp.

There’s a great Chinese proverb that says:

"The best time to plant a tree was 20 years ago. The second best time is now."

I know each of you — in this industry — has the seeds to do so in your daily lives.

So thank you for all you do, keep up the brilliant work...and I look forward to seeing what will grow from those seeds.

Thank you.