The Trump administration has suspended over $10 billion of federal childcare funds for five Democratic-led states over alleged fraud. So what if childcare in the United States is already outrageously expensive, much higher than in other developed countries? And why is it that childcare in the US is so expensive?

Socialist and feminist economist Nancy Folbre sheds light on these questions in the interview that follows by pointing out the various changes that have taken place over time in the organization of social reproduction and argues, in turn, that universal childcare, an idea that is becoming increasingly popular with voters across many parts of the United States, is very much needed.

Nancy Folbre is professor emerita of economics and director of the Program on Gender and Care Work at the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst.

C. J. Polychroniou: You’ve written widely about the rising price of parenting. Despite concerns about a national birthrate that is now below replacement level, there seems to be relatively little public effort to increase economic support for parents and children in this country. Why?

Nancy Folbre: The undeclared wars the Trump administration is conducting include a brazen process of reducing public support for the next generation. This process began last spring when billionaire Elon Musk spearheaded budget cuts and layoffs in programs benefiting children and began dismantling the Department of Education. It escalated in the first week of 2026 when the administration used accusations of fraud from a partisan video of childcare centers in Minnesota as an excuse to freeze federal childcare funds to five Democratic states.

The strategy is transparent: Tar all social spending with a sticky claim of fraud and abuse. This includes spending on parents and children, already hurt by cuts to Medicaid, the Affordable Care Act, and the Supplemental Nutritional Assistance Program. These cuts have reduced the affordability of family care for all but the affluent, making a mockery of the Trump administration’s promises of prosperity for all.

An understanding of the deeper forces driving this strategy requires a deep dive into historical changes in the organization of our social reproduction.

A similar logic applies in a different direction to investments in us and our children—why risk them if they are not cost-effective? Robots may soon be cheaper, and they never go on strike OR vote.

Children are getting more expensive for parents even as investment in future workers is becoming less cost-effective for employers. Economic pressures became evident centuries ago when child labor was outlawed and technological change increased the demand for skilled labor. This shift in demand helped incentivize investments in public health and education that were financed by higher taxes. The need for future workers—and soldiers—also intensified the need for wages sufficient to support at least a modicum of family care.

While employers constantly sought ways to reduce labor costs, their need for an ample supply of skilled labor at least partially aligned their incentives with those of workers themselves through support for the so-called welfare state (better termed a “social investment” state) that helped develop and maintain the capabilities of the working population.

Fast forward to the present. The huge amounts of money being invested in artificial intelligence represent a new bet on reducing labor costs both directly (through reduced employment and wages) and indirectly (through reduced investment in health, education, and social services).

A recent Wall Street Journal headline put it this way: “AI Job Losses Are Coming, Tech Execs Say. The Question: Who’s Most at Risk?” The answer: most of us—because general artificial intelligence (AI) is likely to reduce private incentives to invest in humans rather than data centers. Elon Musk, who spearheaded efforts to cut federal spending in early 2025, is happily promoting Tesla’s new Optimus robot.

C. J. Polychroniou: You seem to be suggesting that class conflict affects public policies, which affect demographic outcomes (and vice versa). How do most economists think about these issues?

Nancy Folbre: Mainstream economists seldom pay much attention to collective identities or interests such as those based on class, gender, citizenship, or parenthood. Their general confidence in the efficiency of market forces makes them hopeful that that the labor market will adjust to changing prices—that new jobs will replace those rendered obsolete. However, college-educated, entry-level workers in the US are already experiencing diminished job prospects. Some economists predict that the “adjustment costs” will be high—a polite way of saying that the younger generation is in for an unpleasant economic shock.

Some ideological adjustment is also underway. The theory of “human capital” successfully promoted the view that the labor market would reward the skills represented by a college degree, reinforcing the claim that employees are generally paid according to the value of what they produce. The very term “human capital” suggests that there is no real distinction between capitalists and workers—everyone can be a capitalist by investing in their own earning power.

This utopian fantasy has long been countered by evidence that the environment people grow up in—including many factors well beyond their own control—shapes their economic trajectory. The fantasy is countered even more powerfully by evidence that the returns to a college education are now declining for individuals coming from low-income families. The surge of investment in AI raises the distinct possibility that the supply of “human capital” is likely to further exceed the demand for it, threatening downward mobility for a segment of the paid labor force once considered relatively secure.

Of course, even conservative economists recognize that a good education—from preschool to college--does more than merely increase lifetime earnings. It enhances the skills that people need to manage their own lives—skills like troubleshooting phones, making good decisions about what to buy, how to save, how to vote, and how to........

© Common Dreams