ISSUE ADVISORY: The Childcare Crisis: A Major Investment Is Desperately Needed

“The childcare sector is on the brink of collapse and we have to act now to save it,” Sen. Patty Murray.

Advocates are sounding a dire warning about the urgent problem facing a critical part of our economy: the childcare infrastructure. Democratic Sens. Patty Murray (WA) and Tim Kaine (VA) are hoping to convince colleagues that significant investment must be made now to strengthen state-based childcare, early learning, and pre-kindergarten programs. This is an effort to rescue parts of the Build Back Better Act’s (BBBA) historic investments that would have made those programs widely available and are still desperately needed to help families recover from pandemic unemployment and access high-quality, affordable childcare.  

A vote on a revised plan in a Reconciliation spending bill may be coming up soon in the Senate and grassroots pressure on senators is needed. Polling shows that 66 percent of voters would be unhappy with their members of Congress if they vote for a package that excludes childcare. 

Universal Access a Dream Dashed 

With the Build Back Better Act, the Biden Administration proposed a comprehensive plan to fund and build over ten years of comprehensive childcare, early learning, and universal pre-kindergarten infrastructure at a cost of $400 billion. Championed by Sen. Patty Murray (D-WA), this proposal would have built upon existing block grant programs for states, expanded the number of childcare and early learning centers, and ensured that childcare would be affordable for nearly all families through the use of subsidies. This approach was expected to reach 20 million children on an annual basis and had the potential to revolutionize childcare infrastructure.   

Studies show that children who experience childcare and early learning do better in school, and are more likely to graduate, attend college, and be employed. 

Unfortunately, Sen. Joe Manchin (D -WV) was not supportive of this investment and other important initiatives in the BBBA and, being a key vote for the Democrats, caused the bill’s early demise. During the pandemic an influx of federal funding enabled his state to increase capacity and improve reimbursements for providers, keeping many centers open but due to run out soon.  A majority of the state’s population lives in a childcare desert, with one in five of West Virginia’s children living in poverty.   

Childcare Sector in Deep Trouble  

Treasury Secretary Janet Yellen was recently quoted as saying, “Childcare is a textbook example of a broken market.” The need for childcare and early learning programs is significant, costs to many families are very high, and providers are not able to retain staff without a living wage. The history of our broken system is tinged with racism and sexism in that enslaved Black women provided childcare and then became domestic workers excluded from job protections, as a recent article by Ms. magazine recounted. At 38 percent of the workforce, there continues to be a disproportionate number of women of color working in childcare and receiving very low wages with few benefits.  

Clearly, the childcare/early learning sector is in deep trouble in the U.S. – primarily due to a lack of prioritization and commitment by successive administrations and opposition to government subsidies for childcare by conservative lawmakers. The United States lags far behind other developed nations in having comprehensive and well-funded policies for childcare and early learning.  In Germany, all children 12 months and above have a legal right to a childcare place, partially subsidized by the government while children ages three to six are assured a preschool slot.  France and the Nordic countries are even more generous. Germany spends approximately $7,000 per child, while Norway spends nearly $12,000 and the U.S. spends about $3,000, according to the Organization for Economic Development and Co-operation (OECD). The United States’ financial resources are comparatively much greater than those countries and so the disparity in spending is shocking.  

The childcare sector was in crisis for many decades prior to the onset of the pandemic. The situation worsened exponentially over the two years with thousands of childcare centers closing and hundreds of thousands of childcare workers laid off or leaving the field. A survey of 36 states found that nearly 16,000 childcare centers and licensed family childcare programs had closed from December 2019 to March 2021, according to Child Care Aware of America.  As for childcare workers, between February and April 2020, the industry lost 376,600 jobs – 95 percent held by women.  As of April 2022, employment was further down by more than 116,000 workers, according to the Bureau of Labor Statistics. 

Lack of Access has Broad Impacts 

We have seen in stark relief what a lack of childcare and early learning infrastructure can do to women’s employment, family economic stability, workforce shortages, and a slowed economic recovery. Women are disproportionately affected by the nation’s severe lack of childcare infrastructure. As online learning became the new norm for school-aged children, parents faced significantly greater caregiving responsibilities. Most of this burden fell onto mothers, interfering with their ability to work outside the home, with 1.1 million women leaving the paid workforce. Over the course of the pandemic, there was a net job loss of 1.2 million, with women workers accounting for nearly 70 percent of those losses.  

With the pandemic receding, the childcare sector gained 2,700 jobs in April, according to a National Women’s Law Center (NWLC) report, but a net 103,800 childcare jobs have been lost since February 2020. One in ten childcare jobs is still missing since the pandemic began. 

One estimate put the number of families without access to childcare programs at close to a half-million currently, but the actual number could be far greater. Many families now live in childcare deserts, with no childcare or early learning facilities in reasonable proximity. It has been reported that on a nationwide scale, for every five infants and toddlers, there is one opening in a childcare center. For rural parts of the country, access is even more limited, with just one opening for every nine children. Families with children who have disabilities are especially disadvantaged by the lack of available and appropriate care.  

Costs for Childcare a Major Barrier  

Clearly, affordability is a problem. Childcare expense is frequently the largest expense families face at more than $10,000 per year, on average, though in some areas of the country the cost is significantly higher. It is clear that if childcare is to become affordable for families, adequate and sustained federal investments are essential. 

Even though the cost childcare is increasing, wages have not risen proportionately. Despite the essential work of early educators and care providers, wages for childcare workers remain depressed, and benefits are minimal. In fact, the average childcare worker in the United States makes just $13.50 per hour, with many more earning only $10 per hour. Chronically low wages in the childcare sector have disincentivized many workers from remaining in the field. Adequate compensation is necessary to maintaining a qualified and diverse childcare workforce. Core problem is that without substantial and sustained government support, day care center owners cannot afford wage increases to attract and keep qualified staff.  Wages for daycare workers average $12.40 an hour or $25,790 a year according to the Bureau of Labor Statistics. Not many persons can sustain a family on such low wages. 

Fewer Women in the Workforce 

Women have been far less able to return to the labor force.  Inadequate childcare infrastructure is a serious impediment to women’s equal earnings and equal representation in the workforce as well as affecting families’ economic well-being.  

Of the 438,000 jobs added to the economy in April, women gained 278,000 or 65 percent of those gains. But the economy is down 1.2 million net jobs since February 2020 and women are still short of 829,000 jobs, according to data from the Bureau of Labor. The NWLC notes that 181,000 women ages 20 and older left the labor force in April. That figure became part of the 1 million fewer women in the labor force when compared to February 2020. Even though 

131,000 men left the workforce in April, there were still 362,000 more men ages 20 and over in the labor force in April 2022 compared to February 2020. 

The unemployment rate for all women ages 20 and over out of work for six months or longer was 3.2 percent in April, but 5.0 percent for Black women, 3.8 percent for Latinas, 2.4 percent for Asian women, and 7.0 percent for women with disabilities. But these figures do not include women who are unemployed, but who are no longer looking for work. 

Promoting a Rescue Plan for Childcare Infrastructure 

Recognizing the very serious continuing need for strengthening the childcare infrastructure of this country, several congressional leaders have been working to rescue what they can of the childcare/early learning, and pre-kindergarten infrastructure expansion proposed by the Build Back Better Act. Instead of the $400 billion in the BBBA, Sens. Murray and Tim Kaine (D-VA) are proposing a much more modest investment, somewhere between $150 and $200 billion, over six years. Funding would go to all 50 states and territories. 

Most of those funds would be allocated to the Child Care and Development Block Grant (CCDBG) program to provide more adequate childcare subsidies. Due to long-term insufficient funding, the CCDBG serves only 11 percent of income-eligible young children and provides insufficient reimbursement to providers. 

Some of that amount would be used to scale up the childcare infrastructure reducing childcare deserts and improving the supply of high-quality care. Some $18 billion would fund a new grant program that would help states expand access to pre-K and another $12 billion would be sent to Head State to raise wages for teachers.  The plan includes a pilot program for states to match federal dollars to expand childcare assistance to middle-income families and access to high-quality preschool for 3- and 4-year-olds. 

They also want to provide $50 billion to $100 billion on a pilot program in CCDBG that would cap childcare expenses for families making up to 250 percent of their state’s median income so that families would not have to pay more than seven percent of their income on care for a child up to the age of 5. The federal government would cover 90 percent of eligible families’ childcare costs.  

The increase in CCDBG funding would also support a variety of programs, including child care centers, home-based family childcare providers, and faith-based programs. 

The hope is that this package will be incorporated into a Reconciliation spending bill that only requires 51 votes.  When Congress returns to business on June 6th this legislation could be headed to a floor vote.  

Grassroots pressure on senators is needed to assure that they accept the Murray-Kaine childcare/early learning infrastructure package. Go here (link) to send a message.  

NOW Government Relations Intern, Nora Weiss, contributed to this article. 

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