The Covid-19 pandemic has exposed the vulnerabilities of the American economy, particularly in the child care sector. As day cares closed and schools shifted to remote learning, parents found themselves struggling to balance work and caregiving responsibilities. While employment in the child care sector has gradually returned to pre-pandemic levels, there persists a shortage of workers and available slots for children in certain areas. This shortage, coupled with increased costs for families, is placing a heavy burden on the sector. Reports from Bank of America indicate that child care costs have risen between 15% and nearly 30% year on year, with particularly significant increases for households earning between $100,000 and $250,000 annually. The expiration of billions in stabilization funds from the American Rescue Plan Act has further exacerbated the situation, potentially leading to higher costs for families or the closure of child care centers.
ReadyNation, a group of more than 2,000 business executives, has been a vocal advocate for policies and programs that support a strong workforce and economy, including child care. Their 2023 report revealed that the infant-toddler child care crisis in the United States costs the nation an estimated $122 billion annually in lost earnings, productivity, and revenue. This figure represents a significant increase from the $57 billion reported in 2018, underscoring the deepening crisis facing working families and businesses. ReadyNation emphasizes that the impact of the child care crisis extends beyond individual families, affecting all taxpayers. According to Nancy Fishman, national director of ReadyNation, the loss of taxpayers amounts to $1,470 per working parent annually due to lower income taxes and reduced purchasing power.
To address the challenges facing the child care sector, ReadyNation advocates for supporting the “workforce behind the workforce” – early child care providers. This support includes ensuring that child care providers have access to essential benefits, such as healthcare and high-quality child care for their own children. Additionally, programs that offer training and education opportunities for child care providers are crucial for enhancing the quality of care provided. In California, the economic toll of the child care crisis is estimated to be $17 billion, the highest of any state in the country according to ReadyNation. While child care jobs in California have rebounded to pre-pandemic levels, challenges remain, particularly in recruiting and retaining qualified staff.
Child care providers, such as Deborah Corley-Marzett in Bakersfield, California, are struggling to navigate the complex landscape of the child care sector. Despite operating an in-home center for subsidized care, Corley-Marzett faces challenges in hiring additional staff due to financial constraints and a lack of children enrolled in her program. Many child care providers in California earn low wages, with average pay ranging from $7 to $10 per hour. The state’s fast-food sector recently secured a historic $20 minimum wage, further widening the wage gap and creating challenges for child care providers to attract and retain staff.
Lawmakers, such as State Senator Nancy Skinner of California, recognize the importance of addressing the child care crisis through policy solutions. The California Women’s Caucus, led by Senator Skinner, has advocated for increased state spending on early care and education, totaling $6.5 billion over the past two years. The Caucus emphasizes the need to maintain steady rate reimbursement rates for child care providers, particularly as the state grapples with a budget deficit. Despite progress made in the child care sector, there is consensus among policymakers that more work needs to be done to support working families and ensure the economic stability of the child care industry.
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