This proverb is widely believed to have originated in Africa several centuries ago. It reflects the emphasis African cultures place on family and community. While some vestiges of this concept remain, in today’s America, child care is a major problem. Yes, sometimes grandparents are able and willing to step up, but generally, parents have to pay more than they can afford and daycares barely make ends meet.
Finding a solution to this problem is going to be difficult. The economic issue is clear, child care is expensive because people are expensive, and there is no obvious substitute for human workers. Productivity and/or AI are not going to help.
Investors have an interest in finding a viable solution as commerce needs workers and government needs taxpayers. It is likely that affordable, quality daycare will require some sort of community involvement. For instance, K-12 education is supported by taxes. Does K have to be the cutoff? Why not pre-school too?
Bottom line, affordable, whether for housing, health care or anything else, means subsidized. Investors should be alert to who and how.
All comments and suggestions are welcome.
Walter J. Kirchberger, CFA
