Capitalist economies only provide income to those who work and those who own. Since children neither work nor own, they’re locked out. To the extent that children receive resources, they do so indirectly through a family unit. But relying solely on that unit to funnel incomes to children runs into two major problems that generate high levels of inequality, poverty, and financial stress.
The first problem is that adding a child to a family increases that family’s resource needs, but capitalist markets do not and cannot respond to that extra need. The second problem is that people generally start having children in their mid-20s when they are in entry-level jobs earning the lowest wages of their life. This timing also means that new parents have had no chance to save money and often even have negative wealth due to student debt burdens.
The accompanying graph shows this problem, and a universal social-democratic welfare state could fix it. Paid leave, free childcare, free health insurance, and a monthly check for every child would largely socialize the costs of raising children, making parenthood affordable for all.