Symposium | The New Supply-Side Progressivism

Demanding a Care Economy

By Julie Kohler Jamila Headley

Tagged Biden Administrationchild careHealth CareInequalityprogressivism

In January 2022, Treasury Secretary Janet Yellen delivered a virtual address to the World Economic Forum. In addition to providing an assessment of the state of the U.S. economy, Yellen outlined the Biden Administration’s economic growth strategy, notably describing it as “modern supply-side economics.” Contrasting it with traditional supply-side economics—a neoliberal philosophy characterized by privatization, deregulation, and tax cuts—Yellen stated that the Administration’s approach sought to “spur economic growth by both boosting labor supply and raising productivity, while reducing inequality and environmental damage.”

Among the solutions that she highlighted were several care economy policies that were included in the Build Back Better (BBB) Act the previous year, including universal pre-K and subsidies that would cap most families’ spending on child care at 7 percent or less of annual household income. Although not explicitly referenced in Yellen’s speech, numerous other health care provisions in the BBB were similarly designed to increase labor supply, including a proposed investment of $150 billion in home and community care.

The speech was an important marker that a new economic era had arrived. It signified that the economic approach exemplified by the American Rescue Plan Act (ARPA)—where the government provided direct relief in order to ease the widespread economic pain caused by the COVID-19 pandemic and made strategic investments to spur job growth—was not a one-off. Under President Biden, government was working to play a role in building a high-growth economy that served the public good. Many on the progressive left had long been arguing for a broadened definition of a strong economy that centered the well-being of everyday Americans, and they viewed the growing interest in supply-side progressivism—or productivism, as it has also been called—as evidence that a paradigm shift was afoot.

Yet Yellen delivered her address mere weeks after Senator Joe Manchin announced he would not support the BBB, leaving it with no viable legislative path. Although Manchin ultimately returned to the negotiating table and cast one of the deciding votes in support of what became the Inflation Reduction Act (IRA), paid leave, child care, and universal pre-K funding were stripped from the bill. The IRA also eliminated many of the BBB’s health care provisions, including the investment in home and community-based services, efforts to close the Medicaid coverage gap, the addition of hearing coverage to Medicare, more robust measures to regulate the price of medicines for all Americans, and a plan to make employer-based health care coverage more affordable by capping household spending on premiums at 8.5 percent of income, among other policy interventions.

Nearly a year after the IRA’s passage, as the Biden Administration shifts its focus to implementation, there is an urgent need to make sense of this economic moment. We must detail the transformation that can flow from $370 billion in new public investments to stabilize, strengthen, and decarbonize the economy. We must document what’s needed for this landmark legislation to achieve its desired goals. And we must examine the degree to which such investments can lead to a more widespread adoption of a new economic worldview—either the modern supply-side approach detailed by Secretary Yellen or an alternative post-neoliberal vision that more sharply distinguishes itself from the paradigm that we’re seeking to replace. But in order to fully understand this moment, we must also grapple with what did not happen legislatively. Indeed, the exclusion of care policies from the IRA may say more about where we stand when it comes to a true economic paradigm shift than what the Biden Administration and congressional Democrats were able to accomplish.

The omission of the care agenda from the IRA included the gutting of many of its original health care provisions—from investment in home and community-based services to proposed expansions to Medicare benefits. This was even more jarring against the backdrop of the unprecedented health and care crisis we were experiencing in the lead-up to the legislation’s passage. COVID-19 laid bare the failures of the neoliberal worldview, exposing just how potentially catastrophic it is to rely on privatized markets to deliver care for our country’s most vulnerable—young children, older people, and people with disabilities. But the global pandemic also offered clear (albeit momentary) glimpses of what a transition toward a more robust role for the government in shaping markets and guaranteeing public goods could look like.

Key legislation passed in 2020-21, including the Families First Coronavirus Response Act (FFCRA) and ARPA, established for a limited period of time the kind of safety net programs that are considered de rigueur in most Western industrialized nations: paid leave, expanded affordable health coverage, an expanded child tax credit that functioned as a child allowance, and child care support through subsidies for providers. Government intervention in the form of $39 billion in child care relief funds protected the sector against total immolation. Government subsidies helped make Affordable Care Act (ACA) plans less expensive and ensure that people who lost their jobs retained health insurance. Congressional action to increase the government’s share of Medicaid costs helped keep people continuously enrolled in Medicaid through the end of the COVID-19 public health emergency, allowing millions of people to gain and maintain access to health coverage between 2020 and 2022 and preventing an incalculable amount of medical and economic hardship.

Ultimately, the failure to ensure long-term investment in care and to secure more permanent expansions to our publicly funded health care systems, even against this backdrop, was a product of multiple factors. It reflected the political idiosyncrasies of Senators Manchin and Kyrsten Sinema, the two moderate Democratic (in Sinema’s case, now independent) members of Congress who played an outsized role in determining which provisions ultimately made it into the IRA. Policy design for issues like child care and health care is notoriously complex, given that these sectors operate as a bewildering maze of federal, state, and private funding streams. Powerful corporate interests—particularly pharmaceutical corporations—deployed their full arsenal of lobbyists and spent hundreds of millions of dollars to destroy or reshape critical health care provisions. They faced little opposition: Although health care is consistently a top political issue for most Americans and policies like paid leave and affordable, high-quality child care poll well across the political spectrum, until recently there have been insufficient resources for building a political base that unites the many constituencies with interests in robust public investment in care—patients, people with disabilities, and paid and unpaid caregivers—around a shared, comprehensive vision.

But perhaps most importantly, the exclusion of care from the IRA reflects the aspects of neoliberalism that remain the most resilient and reveals the kind of work and workers broadly viewed as dispensable. It is no coincidence that it was the tens of millions of caregivers—disproportionately women, people of color, and immigrants—both paid and unpaid, who were left on the cutting room floor. Nor that it was disabled people, elders, and children who were discarded alongside the people who care for them. There are signs that the dominant economic paradigm is shifting, but we have not yet shed the racist, patriarchal, xenophobic, and ableist beliefs that have, for centuries, perpetuated an economic system that exploits and devalues women, people of color, disabled people, immigrants, and people at the intersections of these identities.

Consequently, we find ourselves in a contradictory moment. The IRA, the CHIPS and Science Act, and the Infrastructure Investment and Jobs Act (IIJA) represent a bold attempt to spur production and increase supply in a way that advances the public good, by creating well-paying jobs that enable a middle-class life and transitioning our economy to clean energy. Yet the entire endeavor is artificially constrained by gender and racial biases that remain baked into dominant economic worldviews. Make no mistake: It was a choice to operationalize “a government that builds” predominantly as investments in clean energy and manufacturing—sectors that are overwhelmingly dominated by men. Although the essential nature of care work was on full display during the early days of the pandemic, Republicans mocked the Biden Administration and their congressional allies’ attempts to define it as infrastructure—the work that enables all other work to happen. There may be receptivity to a greater role for government when it comes to the construction of roads and bridges, semiconductor manufacturing, and green energy production, but the systemic devaluation of care labor, which is performed disproportionately by women of color—and the ambivalence about women’s labor force participation more generally—remains stubbornly embedded in our politics and economic policy.

Without a commensurate investment in care, it is unlikely that the new supply-side or productivist approach will fully realize its potential for creating a more equitable and inclusive high-growth economy. Workers need care in order to access the new jobs that are being created. And employers need care to meet the legislation’s production and equity goals. Indeed, without investment in care, the National Partnership for Women and Families estimates that women of color will take a mere 11 percent of the jobs created by the IIJA. This is particularly alarming given that it is women of color whose employment was most negatively affected by the pandemic and who continue to experience significantly higher unemployment rates than white men. (The unemployment rate for Black women this February was 5.1 percent; for Latina women, 4.8 percent; for white men, 3 percent.) Moreover, lack of investment will weaken the care industries, prompting negative spillover effects. The child care and long-term care sectors have collectively lost hundreds of thousands of workers over the course of the pandemic, due to low pay and the hazards of the jobs. The shortage of affordable, high-quality child care now costs the economy an estimated $122 billion in lost income, productivity, and tax revenue each year.

The beneficial economic impact of care is not limited to labor supply. Policies such as paid leave and universal pre-K also have demonstrated positive short- and long-term effects on productivity, due to increased rates of worker retention and better educational outcomes for children who attend such programs. Indeed, an increasing number of scholars and practitioners are making the case that care investments such as New York City’s Pre-K for All program do not merely enable successful industrial policy but are themselves examples of successful industrial policy that demonstrate how government can intervene effectively on the supply side of the economy through ​​public investment, planning, and program implementation.

The Biden Administration appears to recognize the risks of the moment and has taken several steps to signal that care remains integral to its economic vision. In February, the Commerce Department set a requirement that semiconductor manufacturers applying for $150 million or more in CHIPS funding must explain how they are going to guarantee affordable child care to their employees and construction workers. The President’s 2024 budget called for $600 billion in funding for affordable child care and free pre-K, a $150 billion investment in home and community-based care, and actions to make the expanded ACA premium subsidies established through ARPA permanent. It also proposes measures to close the Medicaid coverage gap by taking federal action to extend “Medicaid-like” coverage to individuals in states that have not yet expanded Medicaid. And in April, Biden signed an executive order directing federal agencies to find ways to make child care and long-term care cheaper and more accessible. But with the exception of the CHIPS requirement, these actions are more symbolic than substantive. Biden’s budget has no chance of passing the Republican-controlled House. And without congressional authorization, including substantial budgetary allocations to back this agenda, the impact of his executive action is likely to be minimal.

The Administration’s willingness to pursue creative solutions to keep care at the forefront of the agenda—and to frame it as integral to successful industrial policy—demonstrates that there has been a meaningful economic shift within mainstream Democratic circles. Yet the approach is not without risk. Some have questioned whether requiring semiconductor manufacturers to ensure the availability of child care in order to access federal funds is merely creating additional layers of unnecessary bureaucracy that will cause production delays and undermine manufacturers’ bottom lines. Such stumbles, they allege, could feed the old neoliberal trope that “government can’t get things done” and that economic production is best left to a largely unregulated—and purportedly more efficient—private sector.

More critically, it is an open question whether the Administration’s incrementalist approach will help to advance a view of care as a public good. The CHIPS child care requirement, for example, could unintentionally cement the view that child care is the responsibility of private employers. On this front, health care provides a cautionary tale: Originally offered as a perk to attract employees during World War II, employer-provided health insurance quickly became the norm. And once it did, powerful interests—the Chamber of Commerce, American Medical Association, and even labor unions that had fought to secure coverage for their members—coalesced to protect it, opposing the national health insurance system that President Harry Truman tried to establish in 1945. In the nearly 80 years since, the notion of health care as an employer benefit has proven nearly impossible to dislodge, creating an inefficient, unaffordable, and unjust health care system that is driven by the perverted profit motives of its powerful corporate actors.

Robust public investment in care would lead to a fuller realization of the promise that lies in a modern supply-side or productivist economic approach. But shifting the dominant economic paradigm will require us to go further and reconceptualize the value of care to our economy. Care is not merely a tool for increasing supply. It is a public good that improves health, facilitates children’s development, and allows all people, regardless of race, gender, and ability status, to live with dignity. If we are committed to building a truly inclusive and productive economy—one that ends the centuries-old cycle of exploitation and devaluation of women, and particularly of women of color—we must work to advance a post-neoliberal paradigm that is grounded in a moral understanding of the economy as a means to promote thriving for all, rather than to concentrate wealth among a select few.

In recent years, progressives have made significant gains in articulating a set of ideas that will help get us there. Indeed, this work helped inform many of the policy provisions of the ARPA, IIJA, CHIPS and Science Act, and IRA that fueled a job-full recovery and, either temporarily or more permanently, reoriented our economy. But as meaningful as these gains have been, they were—and remain—fragile. Despite the prevailing wisdom that it is nearly impossible to take away government programs once they have been established, many of the provisions established through the FFCRA and ARPA in particular—the expanded child tax credit, paid leave, Medicaid continuity—have since sunsetted, often without public outrage.

What is clear is that a transformational paradigm shift will require more than a cataclysmic public health crisis, compelling policy ideas, and determined executive leadership. For starters, we need solid legislative majorities that will support bold policy agendas that align with progressive economic goals. We need a more robust bench of messengers who will continue to advance narratives that promote an understanding of care as a basic human right and build demand for public solutions among large segments of the population. Most importantly, we need to cultivate stronger and more interconnected social movements. Ultimately, it is organized communities—led by care workers, parents and other family members, patients, and people with disabilities—demanding the care and dignity they deserve that will usher in a post-neoliberal paradigm that truly promotes thriving for all.

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Read more about Biden Administrationchild careHealth CareInequalityprogressivism

Julie Kohler is the president of BMK Consulting, a philanthropic and nonprofit strategy consulting firm, and the host of the Wonder Media Network podcast “White Picket Fence.” For more than a decade, she served as Senior Vice President and Managing Director for the Democracy Alliance, a progressive donor network.

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Jamila Headley is the Co-Executive Director of the Be A Hero family of health care justice and advocacy organizations, alongside founder Ady Barkan. She has a Masters in Global Health and Ph.D in Public Health from the University of Oxford.

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