During his inaugural address, New York City’s new mayor, Zohran Mamdani, made a lot of promises. Stating that “there is no need too small to be met,” he promised to use government power aggressively to make life more affordable for New Yorkers, including to “deliver universal childcare for the many by taxing the wealthiest few.”
Undoubtedly, this sounds great to many cash-strapped New Yorkers, particularly parents who know firsthand that childcare in New York is expensive and scarce. Most savvy New Yorkers also suspect that accessing city-provided “free” childcare won’t be as easy as Mamdani makes it sound.
Economists can detail exactly how big a line item childcare for the 500,000 children 5 and under will be in the New York City budget. Given that childcare costs are in the neighborhood of $20,000 per child, a back-of-the-hand calculation suggests that it will exceed the initial $6 billion estimate and would be closer to $10 billion. In fact, the costs are likely to be even more eye-popping since, at the same time as he promises to shift all daycare costs onto taxpayers, Mamdani declares he will also raise wages for daycare workers to be closer to those of public school teachers.
Those same economists will likely also warn that the “wealthiest few” of city earners whom Mamdani promises to hit with another tax to pay for all of his freebies are already overtaxed, are too few in number, and are busy packing their bags for other states for these numbers to add up.
Yet, the biggest problem for Mamdani’s “free” daycare plan isn’t that it’s unaffordable but that it fails to understand the basic idea of tradeoffs and scarcity.
As of December, there were more than 10,000 children on the waiting list for the existing program that defrays childcare costs for low-income families. There aren’t slots in daycare centers to serve these families.
Imagine how such waiting lists will explode under a program that makes childcare not just subsidized but “free.” Presumably, this “universal” program would mean that all families currently paying for childcare in New York City would stop making private payments, and their costs would be picked up by taxpayers.
And what about all those families who aren’t using formal daycare services at all? Many families, especially lower-income families, rely on grandparents, other relatives and neighbors to help provide childcare in order to save costs. Many other families have one parent at home caring for their young children. Some parents plan their work schedules so that someone is always at home, rather than paying for outside care. Yet, if all these families suddenly become eligible for free care at a licensed, city-paid-for center, they will join the queue, too.
Mamdani’s system will face the same problems that have plagued every collectivist, one-size-fits-all system ever created: there will be no mechanism to distinguish between those who really need the services and those who don’t. That means those who really need childcare to work will have an even tougher time getting spots in a system that is overwhelmed by demand.
Undoubtedly, Mamdani is dreaming up ways to massively increase the supply of childcare. However, daycare slots don’t multiply overnight. Licensing, staffing, space and compliance all take time and money.
These issues will be particularly difficult to overcome since, naturally, Mamdani isn’t just promising more daycare, but more high-quality daycare, and government officials like him will get to define exactly what that means. Daycare providers should brace for a tsunami of red tape and increased micromanagement of their business practices, or risk becoming ineligible for city subsidies. Parents may find they have fewer options that provide the environment they want for their children, even if the city manages to create more industrial-size childcare centers.
New Yorkers are likely to find that Mamdani’s promise of free, high-quality daycare for everyone is simply a fairytale. The fact is, childcare can never truly be free. The real question is who pays, how much it costs, and whether the system can actually deliver options that work for families.
Unfortunately, New Yorkers are likely to find that Mamdani isn’t just unlikely to solve the city’s significant daycare challenge, but that he may make it much worse.