Here are three of the top financial news stories of the week, gathered from around the web:
Shortage of childcare is hurting women
The difficulty of finding affordable childcare and elder care continues to hold women back in the workforce, Lydia DePillis, Jeanna Smialek and Ben Casselman said in The New York Times. An estimated 500,000 child care and care home workers have left the industry since 2020, and the impact is still being felt – primarily by working mothers. The share of women participating in the labor force or looking for work has recovered “about as much as the share of men” since 2019. But federal data shows the return has been fragile. Many mothers have turned to self-employment. Others have called for reduced hours “to balance care responsibilities” at home. Among the slowest to return to work are single mothers, “a sign that the shortage of care makes them vulnerable”.
Shock for Obamacare
Obamacare premiums could rise this fall if Congress doesn’t act, David Wainer said in The Wall Street Journal. People insured under the Affordable Care Act have been “largely spared” from rising health care costs thanks to generous federal funding provided by the American Rescue Plan Act of 2021. The COVID-19 relief program “temporarily increased subsidies in all areas” and allowed more people to qualify for care. If the subsidies expire, however, a low-deductible “silver” enrollee earning $60,000 “will see a 36% increase, or about $1,800 per year.” Families and older enrollees would see even bigger premium increases. Congress is trying to negotiate a deal before the grants expire, and open registration begins Nov. 1, just a week before the midterm elections.
Borrow for daily purchases
Consumers are increasingly using “buy now, pay later” programs to cover even everyday purchases, like groceries and gas, Alicia Wallace told CNN. Companies like Affirm, Afterpay and Klarna, which allow customers to split purchases into four or more installments, have exploded during the pandemic. Their appeal was obvious: no credit checks and no or low interest rates; instead, the services make money by charging merchants a fee. But payment plans can tempt some shoppers to buy more than they can afford. Since the services aren’t regulated like loans, it’s unclear exactly how much debt Americans are racking up. “The young and the underbanked are badly affected,” said Harvard Kennedy School colleague Marshall Lux, “which could ruin their credit for years to come.”
This article first appeared in the latest issue of The week magazine. If you want to know more, you can try six risk-free issues of the magazine here.