The Covid-19 pandemic has revealed both vulnerabilities and resilience in the American economy. One area that has been significantly impacted is child care, as day cares closed, schools switched to remote learning, and parents struggled to balance work and childcare responsibilities. Despite the return of employment in the child care sector to pre-pandemic levels, there is a shortage of workers and available slots for children in certain areas, putting strain on the industry.
As per a February report from Bank of America, the average child care payment per household increased by 15% to nearly 30% year-over-year during the fourth quarter of 2023. The most significant rise was observed among households with annual incomes ranging from $100,000 to $250,000. This surge in costs is a burden for families, especially in the wake of the expiration of stabilization funds from the American Rescue Plan Act designated for the child care sector.
ReadyNation, a group advocating for policies that support a robust workforce and economy, released a report in 2023 revealing that the crisis in infant-toddler child care costs the U.S. an estimated $122 billion annually in lost earnings, productivity, and revenue. This figure has more than doubled from $57 billion in 2018, highlighting the exacerbated challenges faced by working families and the businesses that rely on them. The group emphasizes that the repercussions of the child care crisis are felt by all taxpayers, with a loss of $1,470 per working parent every year.
A significant part of the solution to the child care crisis involves backing what ReadyNation terms as the “workforce behind the workforce” – early child care providers. Ensuring that child care providers have access to benefits, including healthcare and high-quality child care for their own children, is crucial. Programs offering additional training and education for child care providers are also essential in maintaining a strong workforce and economy.
In California, the economic toll due to the child care crisis is estimated at $17 billion, which is the highest in the nation according to ReadyNation. While child care jobs in the state have rebounded to pre-pandemic levels, other states have seen more significant job gains post-pandemic. Child care workers in California, organized under the Child Care Providers United in 2019, represent over 40,000 providers. These providers are part of the state subsidy program and unionized to secure better working conditions, including retirement benefits. Advocating for full reimbursement of the cost of providing care, child care providers in California strive for dignity in their work and attracting new providers to the workforce.
Deborah Corley-Marzett, who runs an in-home child care center in Bakersfield, California, highlights the struggle of hiring staff due to financial constraints. Low wages in the child care sector compared to other industries, such as fast-food, make it challenging to attract and retain qualified personnel. Lawmakers recognize the progress made in addressing the child care crisis but acknowledge the need for further action to support providers and families in need.
The child care crisis in America has far-reaching economic implications, affecting families, businesses, and the overall workforce. Addressing the shortage of workers, increasing costs for families, and supporting early child care providers are crucial steps in mitigating the impact of this crisis and fostering a stronger, more resilient economy for all.
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