Trickle-Up Economics: The Macroeconomic Impact of Investing in Care Work

, published by the Political Economy Research Institute, models the effects of the Build Back Better plan and demonstrates the positive impact that investing in high-quality care work has throughout the economy. The Biden-Harris proposals would set a wage floor of $15 per hour for the entire care workforce, increasing the size of the workforce at the same time—and potentially creating about 50 percent more jobs in other sectors like restaurants and retail.

For home healthcare, which suffers from extreme turnover problems, setting a $15 minimum wage will stabilize the 2.3-million-person workforce, benefiting care recipients and their families in ways that we do not attempt to quantify . We focus on the effects of the proposed $400 billion investment over a 10-year period, finding that if part of these funds is allocated to raising the wages of current care workers, there are still sufficient funds to support an additional 741,457 direct care jobs, all at a minimum $15 per hour. As the current and new care workers spend their earnings, 394,611 new jobs will be created in, for example, the restaurant and healthcare industries, resulting in $40.7 billion in total new labor income.

The results are similar for the childcare sector, which includes infant, toddler and pre-K care workers. The American Family Plan proposed a historic investment in childcare to finally establish a real universal childcare infrastructure, which is in especially dire straits from its collapse in 2020 and is continuing to hurt women’s labor force participation, potentially for the next generation.

The American Family Plan proposed a historic investment in childcare to finally establish a real universal childcare infrastructure. (

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