The promise of 300 million global jobs in care as a key feature of recovery from the Covid-19 pandemic is a tempting invitation for investors seeking new profit opportunities, especially if more public monies are committed. Mature segments of the care sector that have received massive private investments — such as health care, nursing homes, and long-term care — tell us that we need democratized finance to build a care economy that ensures alignment of women’s rights, workers’ rights, and care receivers’ rights.
To generate 300 million jobs by 2035, annual investment of 3.2 percent of global GDP will be required. More than three-quarters of the new employment will benefit women, and over 80 percent of these new jobs will be formal work, according to a new ILO report. Women’s rights organizations want increased public spending on care to redistribute responsibilities between families or households and care provided by government agencies. Meanwhile, care gaps have been filled by arranging services from a spectrum of care givers spanning domestic workers, non-profit or volunteer groups, and corporate or even multinational providers. Should public investments deliver, we can expect a trend towards consolidation in the sector, making it even more attractive for private investors.
Increasingly privatized and financialized
Public spending crowds-in private investment, as health care and long-term care has shown. However, other policies also entice private-sector investment in care, such as public-sector management practices focused on efficiency and productivity (as in Canada, UK, and the United States), more liberal foreign-ownership rules (as in India, China, and some Southeast Asian countries), and greater opening of procurement policies to foreign contractors (as in Turkey). Labor market flexibilization is an essential ingredient, as demonstrated by the long-term care home sector in British Columbia in Canada, where sectoral bargaining and contracting protections for care workers have been removed.
Private equity investments in health care in particular spark serious concerns. Between 2010 and 2019, such investment in the health care sector rose from $41.5 billion to $119.9 billion in the United States, with new investments focused on in-home health care and outpatient care. Multilateral financial institutions, such as International Finance Corporation (IFC) and CDC Group, have partnered with private equity investors in health care to support sustainable development goals for health. In Africa, the IFC launched the Africa Health Care Fund, whose first closing raised $57 million to support small and medium-scale enterprises in health clinics and diagnostic centers.