Price Point Public Policy

The Wal-Mart-ification of Public Services

Our childcare fantasies for this country are pocketbook politics at their most distorted.

Currently, monthly childcare fees at licensed non-profit centres can be as high as $1600/month. They vary widely depending on the geography and age of the child. The service is on par with rent and tend to bite new parents in the butt.

In response to steep fees (by the way, can we call it “tuition”?) it seems that many Canadians have decided that parents should pay about a quarter of the going rate while the rest of us generously pick up the tab. The thing is, no part of the $15/day childcare “movement” makes an effort to elaborate on the fine print of that bargain. Though market demand far exceeds the present supply of spaces, the current and would-be users of childcare services are pressing for a super discounted price. As presented, their appeal does not make sense.

That’s because when we take this price-point approach to public policy, we aren’t really communicating that we want to be able to better afford childcare. What we’re doing is worse: promoting that it should be “cheap.” Not framing it as a public good is as unproductive as it is strangely resonant. Ultimately, it’s wrong.

Popular advocacy has taken a seductive Wal-Mart approach to one of the most important public investments possible. In doing so, we are actually devaluing early childhood education as a national policy priority and misleading our penny-pinching peers. How can we believe something this important should be reduced to a cashier’s transaction?

Price check on aisle child care: investments in early learning support children, parents, and the economy, with a return of up to $3 per dollar invested. The benefits are not in question, but how to best deliver childcare programming is.

If I wanted to, I would just blame Quebec and the demonstrated success of their insane $9/day program. Instead, allow me to simply point out that the belle province pays about $2 billion a year supporting this oft-envied program, and that studies have shown there are no early learning gains from the investment. That means that when they show up to their first day of grade one, Quebec kids aren’t any more ready to start school than their non-daycare peers. The only real benefit to the province has been increased maternal labour force participation. Arguing for a particular price point prevents us from talking about the goals of the program and distinguishing between mom being at work, brains getting smarter, or both.

Coupon-cutting childcare numbers are obscuring important national conversations about how we would pay for national childcare (that would be taxes) and whether it should be means-tested (it totally should). We are also seriously compromising our creativity by stifling any debate around delivery models. All we are looking at is the price tag and scanning political platform aisles for one that says “flat fee” and “universality.”

The thing is, we can’t offshore Early Childhood Educators or manufacture childcare policies in China. The workers who will get low pay will be (are) our neighbours and the premiums that subsidize each day’s delivery will still come out of our collective taxpayer pocket. The only way to cut early learning delivery costs is to inflate the number of children and decrease the corresponding ratio of adults. Such a modification only introduces modest savings at the margin and seriously erodes the quality of the experience.

What do I want us to do instead? Think about childcare as more of a public service and less of a personal one.

Back to the price tag: other things that cost about fifteen dollars a day are my lunch (when I don’t pack it) and parking. I often pay more for a six pack of craft beer.

We are comfortable paying a range of fees for airline seats, motor vehicles, homes, and running shoes. As consumers of public services, as we lobby for a universal childcare program we can’t keep confusing equality with sameness. Yes, we need more affordable childcare, but campaigning for $15/day is regressive, not progressive.

It is well known that a high quality early learning program provides a significant bang for each buck. But the business question to the public isn’t what price point people are willing to pay. It’s whether they’re willing to pay for other kids and families to enjoy the same educational programming that they either might already be able to enjoy or may never even have to access.

When I go to Wal Mart or No Frills, I get the “best” price. When you drop off your infant at child care, you want the best product and I’m willing to help pay for it. Are you?

About Vasiliki Bednar

Vasiliki (Vass) Bednar is an Action Canada Fellow and the Associate Director of the Cities research program at the University of Toronto's Martin Prosperity Institute at the Rotman School of Management. She was previously a senior advisor to the Ontario government of Kathleen Wynne and is active in public policy debates as a member of the Banff Forum, Equal Voice, Better Budgets Toronto and board member of the Couchiching Institute on Public Affairs. She holds her Master of Public Policy from the School of Public Policy & Governance at U of T and is a graduate of McMaster's unique Arts & Science Program.


Price Point Public Policy — 3 Comments

  1. If the policy is going to be a credit to pay for ‘early childhood education’ at a facility of your choice, then why not extend that to every level of education?

    It seems like as soon as you start down this road in terms of k-12 education, you’re in sacred cow territory.

  2. Joseph, I’ve enjoyed reading your scribbles for a while now, but always with the understanding that you choose a limited point of view no matter how open minded and focused on the “social optima” you think you are.

    Today is one of those times when you’re taking it to a new level, I haven’t seen this much lack of concern about the human element to economics since your “let’s solve traffic by making everything a toll road” piece.

    Let’s look at a few things you said.

    > What we’re doing is worse: promoting that it should be “cheap.”

    How in the world do you look at $2000 a month MINIMUM for childcare in a place like Toronto, and say that to demand any less is “cheap” and “devaluing”? We live in a world where you can get a spartan but workable pair of shoes for $20 but to keep your child safe while at work costs $2000 every month? Joe Lunchbucket would spend nearly 100% of his disposable income on childcare at current prices! This is a classic market failure to respond to pricing signals, something which government is supposed to correct, no?

    And before you get too far into the market-worshipping tropes that you never tire of, consider that childbirth and rearing is a social good, even for us. Canada is unique in that we are less dependent on internal birth rate due to being a magnet for quality immigrants, but nonetheless we have a limited ability to absorb new immigrants successfully (economically, culturally, etc). That means that still, even for us, domestic births are important because we can’t successfully take care of all population replacement with immigration alone.

    So if someone is financially crippled by the cost of childcare in the early 0-7 pre-education years, how in the world is this problem to be solved?

    Individually? People deciding not to have kids because the expense of childcare is not reasonable, thus hurting the social optima?

    Or perhaps also individually by having kids anyway and becoming less of a meaningful participant in the greater economy due to lower discretionary income? What is to become of your precious “pricing signals” then, when so many are unable to express demand for goods and services due to low discretionary income?

    Perhaps then we should attempt to solve it collectively, which as you so many times point out, means government action. Because outside of government, spontaneous decentralized decisive action can’t be reasonably expected to take place. Otherwise things like monopolies and dictatorships would never work.

    > Such a modification only introduces modest savings at the margin and seriously erodes the quality of the experience.

    Citation (or at least some semblance of a reasoning) needed. You’re seriously suggesting that increasing the number of children per childcare worker produces only “modest” savings? And that this “seriously” erodes the (almost-impossible-to-measure) “quality” of the experience? People don’t send their kids to childcare for some kind of preppy “experience”. For the most part, regular Canadians just want to park their kids somewhere safe so they can go to work and have an income to live on. Surely that’s not beyond your ability to appreciate as a very very critical factor in all this discussion.

    > a high quality early learning program provides a significant bang for each buck

    This isn’t school. It’s not prep school. It’s not social optima. It’s dealing with the market failure that makes childcare cost nearly 100% of a median worker’s disposable wage. A single parent making the median wage or less is completely screwed, them and the kid.

    Another thing to consider is the income inequality in our society, and its current trend. On this background, a price of $15 per day (assuming this is below-cost, which I’m not sure it is) would simply be a re-distributive measure by allowing the progressiveness of the income tax system to subsidize the cost of childcare in the pursuit of economic activity (parent/s get to keep working) as well as the production of a needed social good (children becoming an affordable choice for the majority of Canadians).

    I really enjoy reading your stuff 90% of the time, and I find your writings very insightful, but sometimes I feel like punching my monitor when I see you talk out of your tenured ivory tower and completely miss the point that the economy is supposed to serve human beings, not be mathematically optimal for you to have a brain-orgasm over. This is exactly then kind of attitude that Harper is using to get the working class to hold academics in disdain. And I hate to say it, but sometimes he really does have a point.

    Would love to see your juicy brain and thorough thought process applied to improving quality of life across the board for our humans, rather than creating a neat little mathematical solution that is elegant, like with your road tolls. If you can’t remember the human, you should be a mathematician not an economist.

    My humble, but opinionated 2 cents.

  3. I mistakenly thought this piece was written by Joseph. I am now aware that it’s written by Vasiliki. Sorry. But my points are still valid, and it’s concerning that Joseph’s focus on elegant math and solving the symptoms has now spread to the other contributors here to the point where I was surprised when I actually checked who wrote the article. Collaboration is great, but groupthink is dangerous especially with regards to public policy.