Research tells us education begins at birth. High-quality, interactive early learning experiences are foundational for later success in school, career, and life. For parents with young children, accessing child care that will yield lifelong developmental benefits is paramount.
Any working parent who has gone through the process of securing care for their child knows it can be a herculean task. This is especially true when finding care for infants and toddlers. I recall a conversation with one working professional who joked that she shared her pregnancy news with her child care provider before her family because open spots for infants are scarce.
When parents do find quality care, it often comes with a price tag that approaches or exceeds some college tuition rates. In Middlesex County, Massachusetts, families with one child pay approximately $20,000 annually for child care. A working mother with a 10-month-old and a 3-year-old enrolled full-time in a center, can expect to pay upwards of $35,000 a year if they do not participate in public subsidy programs. Tuition costs vary based on factors such as location, program quality, and type (i.e., center vs. family childcare home).
A decade ago, I was a young mother who had just accepted a new teaching job, and my salary barely covered child care costs for our two children under age 5. I wondered if I could afford to work, let alone contribute to our other household costs. I was not alone. American families spend more on child care than almost any other country in the world, disincentivizing entry into the workforce.
As parents face the high costs of child care, they question how it can possibly be so much. Child care is very labor intensive, and it cannot be outsourced. Yet, child care workers earn some of the lowest wages in the country, averaging $14 per hour.
According to the U.S. Chamber of Commerce, 94% of child care owners are women, and 40% are people of color. Historically, these groups have shouldered the burden of providing quality, affordable care. They are the unseen subsidizers of American child care. How can child care be so expensive when the workforce makes so little?
The problem lies in the child care business model used by hundreds of thousands of providers nationwide. It is lean in the best of times and broken in the worst of times. Most for-profit child care facilities operate on razor-thin margins that are usually less than 1%. Providers can only charge what parents can afford, and most parents cannot afford the true cost of quality care.
Simon Workman of the Prenatal to Five Fiscal Strategies developed a cost estimation tool demonstrating the costs of operating a high-quality early learning program in each state. Let’s examine the per-child costs a provider might incur to offer care in Massachusetts. We will assume the child care center is high-quality and offers staff the employment benefits many of us take for granted, including access to health care and retirement. This center has:
- fewer children per teacher.
- salaries slightly higher than average.
- staff that receive retirement and health insurance.
- teachers with dedicated planning time.
- larger than average classrooms (around 42 square feet per child).
- resources to purchase extra supplies or replace broken or used materials.
According to the estimator, the annual per-child cost for child care businesses to provide care in this scenario ranges from $18,984 for preschoolers to $35,556 for infants. To cover these costs, providers would have to charge prices that most families cannot or are not willing to pay.
Public subsidies support low-income families and improve access, but most states only reimburse about 75% of the market rate, leaving parents responsible for paying the difference through copays. For many low-income families, these copays can be unaffordable and result in barriers to child care access and workforce participation.
Post-pandemic, child care providers face the additional challenge of a looming fiscal cliff as the clock runs out on the $24 billion dollars of federal relief funding allocated to the industry. Many small business owners who applied these funds to support their workforce wonder how they will make payroll through the end of the year. Some will close their doors for good, decreasing the already fragile supply of available child care spots.
While the challenges facing child care providers and the families they serve are significant, policies and statewide initiatives across the country offer promise and hope. States are increasing the number of families eligible for subsidies, moving to a true cost-of-care reimbursement model, and investing in programs promoting high wages and staff retention.
Child care impacts the vitality of every industry and demands action to ensure that working parents can access the care they need to participate fully in the workforce. Quality, affordable child care should be a right, not a privilege.
Alison LaRocca ’06 is President & CEO of Luminary Evaluation. She partners with nonprofit and public-serving organizations to measure program effectiveness and identify opportunities to increase impact. You can connect with Alison on LinkedIn or via her website.
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