The aftermath of the Covid-19 pandemic has not only exposed the vulnerabilities in the American economy but has also highlighted the resilience within certain sectors. Child care, in particular, has taken center stage as daycares closed, schools shifted to remote learning, and parents struggled to balance work and childcare responsibilities. While employment in the child care sector has started to return to pre-pandemic levels according to the Bureau of Labor Statistics, there is a noticeable shortage of workers in some areas. This scarcity, coupled with a lack of available slots for children, is putting a strain on the industry.
Families are also facing increased financial burdens when it comes to child care. A recent report by Bank of America revealed that the average child care payment per household has risen between 15% and nearly 30% year on year during the fourth quarter of 2023. The steepest increase was observed among households with annual incomes ranging from $100,000 to $250,000. This surge in costs could be attributed to the expiration of billions in stabilization funds allocated to the child care sector from the American Rescue Plan Act, which could potentially lead to higher expenses for families or even the closure of child care centers.
According to a report by ReadyNation, a group of business executives advocating for policies supporting a robust workforce and economy, the infant-toddler child care crisis is costing the United States an estimated $122 billion annually in lost earnings, productivity, and revenue. This figure has more than doubled since 2018, indicating a worsening crisis exacerbated by the pandemic. Furthermore, the report highlights the ripple effect of this crisis, affecting all taxpayers by reducing earnings and purchasing power, ultimately impacting the economy as a whole.
One of the key solutions proposed by ReadyNation is to support the “workforce behind the workforce,” referring to early child care providers. Ensuring that child care providers have access to benefits and additional training is crucial in addressing the challenges faced by the sector. Advocates emphasize the importance of investing in the early childhood workforce to not only improve the quality of care but also to elevate the status and well-being of child care providers.
In California, the economic toll of the child care crisis is estimated to be $17 billion, surpassing that of any other state in the nation. While child care jobs in the state have rebounded to pre-pandemic levels, the sector faces challenges in recruiting and retaining workers. Child care providers in California, represented by the Child Care Providers United union, are advocating for better reimbursement rates to cover the full cost of providing care. Low wages and difficulty in hiring staff are common issues faced by providers, further exacerbating the workforce shortage.
Lawmakers acknowledge the progress made in addressing the child care crisis but emphasize the need for further action. State Senator Nancy Skinner, representing parts of the Bay Area and chair of the California Women’s Caucus, has been vocal about prioritizing early child care and education. The Caucus successfully advocated for a $2 billion increase in the state’s spending on early care and education over the past two years, totaling $6.5 billion. Maintaining steady rate reimbursement rates for child care providers is a current focus for the Caucus as they navigate through budget challenges.
The child care crisis in the United States is not just a social issue but a significant economic concern affecting families, businesses, and the overall economy. Addressing the shortage of workers, rising costs for families, and supporting the child care workforce are critical steps in mitigating the impact of this crisis. Legislative support, advocacy efforts, and investment in early child care and education are essential to building a sustainable and thriving child care sector that benefits all Americans.