Many sectors are reeling from massive labor shortages — but few affect families more intimately than what is happening with child care. With lengthy waiting lists and soaring costs, the scale of the crisis is obvious. Less clear is how the country can quickly fix it.
First, the problem: Like other caregiver industries, child care was hit hard by COVID-19. There are nearly 90,000 fewer child-care workers today than in February 2020 — an 8.4 percent reduction in the workforce. According to a February 2022 report by Child Care Aware of America, a nonprofit association, nearly 16,000 programs in 37 states shut down during the pandemic. With birthrates rebounding and millions of workers returning to the office, these closures have placed enormous pressure on parents.
Yet child care was in trouble long before the pandemic. The industry has operated on a flawed business model for decades. Because infants and toddlers require more staffing than other age groups, programs are labor-intensive and costly to run. But imposing higher charges to reflect those costs would make them unaffordable for many families. As a result, centers operate at very slim profit margins, offering workers low wages and few benefits for grueling work. It’s no wonder so many caregivers have left to work in industries such as retail and hospitality.
Moreover, providers are concentrated in higher-income neighborhoods, while communities of color and rural areas are severely underserved. In 2018, the Center for American Progress found that more than 50 percent of Americans lived in “child care deserts” — places where supply was insufficient.
The status quo is plainly untenable. But creating a better model will require creative thinking, collaboration and resources.
BOOSTING PUBLIC INVESTMENT
Without a measure of government intervention, the child-care crisis will almost certainly worsen. Currently, public spending on child care is fragmented, inconsistent and relatively meager: The U.S. government spends about $500 on child care per toddler annually, while the average for the Organization for Economic Cooperation and Development is $14,436. The pandemic relief packages, particularly the American Rescue Plan, were lifelines for the industry at a desperate moment. But those funds are set to lapse in September 2024, leaving states and D.C. with a fiscal cliff of nearly $50 billion. If we do not want American families to bear the financial burden for a sinking industry, government will have to step in.
This could take several forms. The most politically feasible option would be for Congress to bolster the Child Care and Development Block Grant program, which supports low-income families. That would alleviate pressure on the most vulnerable households but would not address the labor shortages. Other possibilities include expanding the Child and Dependent Care Credit — or extending and strengthening the child tax credit for all families. Both would help more families pay close to the real cost of child care, allowing providers to increase wages.
And it should not all fall on the federal government. New Mexico, for example, announced in April that it would provide a year of free child care to families earning up to 400 percent of the federal poverty level, using funds from taxes on fossil fuel production. Though it would be difficult to make that sort of expansive model permanent or replicate it elsewhere, states have room to get creative with revenue streams.
REDUCING BARRIERS TO ENTRY FOR PROVIDERS
However, subsidizing child care without reforming the way the industry operates could quickly become an unsustainable drain on resources. It would be better to supplement robust public investment with policies that reduce burdens on providers.
For a start, state and local authorities should streamline the complex regulatory regimes governing child care in many areas. Diluting some requirements, such as staff-to-child ratios, could harm the quality of care. But many regulations are more trivial: requirements for parking spaces, how many balls a provider must supply per child, what materials certain toys should be made of. These rules can encumber new and smaller providers. It is also time to rethink minimum education requirements. A particularly egregious upcoming rule in D.C. will require many child-care workers to have college degrees, placing unnecessary restrictions on recruitment and hiring.
States should likewise simplify processes for licensing and credentials. A recent study from the University of Virginia and the University of California at Los Angeles found that more than two-thirds of those seeking child-care credentials in Louisiana between 2016 and 2018 did not earn them. When surveyed, many cited administrative burdens and excessive paperwork as obstacles. Fewer hurdles and more support for candidates would create a stronger pipeline of qualified workers.
LEVERAGING THE PRIVATE SECTOR
The private sector can also play a role. As Post Opinions columnist Alyssa Rosenberg has noted, more companies are investing in on-site day care, which can increase employee retention and morale while reducing pressure on other providers. Governments can promote these sorts of programs with tax breaks and other incentives but should tread carefully: If high-earning parents in white-collar fields no longer pay for outside child care, independent centers will lose a crucial source of income. Without protections or other revenue sources, this could drive out providers, deepening inequities and depriving low-income communities of solutions.
Another option is to expand public-private partnerships. These collaborations could involve establishing alternate funding streams, offering supplies and technological support to providers, and creating pathways between educational institutions and child-care centers. In addition, partnerships between providers and public facilities such as libraries could help match workers with childproof, learning-oriented spaces.
MAKING THE MOST OF TECHNOLOGY AND INNOVATION
The conventional wisdom is that caregiving sectors don’t particularly benefit from technology because they require a hands-on touch. Yet technological advancements have already proved useful: During the worst stages of the pandemic, start-ups connected essential workers with short-term and emergency child care and helped providers quickly adapt to new safety requirements.
With many parents struggling to find affordable, quality care, apps and databases could help match families with providers that meet their needs. Technology can also enable shared service networks among smaller, often home-based providers, in which they can share administrative burdens and overhead costs. Because larger centers are more likely to be profitable, this could help create economies of scale and allow caregivers to access broader support systems. These innovations will not transform the industry on their own — the funding gap is simply too large — but they can make the system more efficient.
As millions of families vividly experienced over the past two years, child care is the backbone of an effective economy and society. Investing in a more functional and equitable system would yield enormous dividends in labor, productivity and childhood development. With the crisis deepening in many parts of the country, there is no time to lose getting started.
The Washington Post
