Even with federal aid, an estimated one third of child care centers have closed since the onset of the pandemic. What was already a complex issue pre-pandemic has only further become a source of stress for households across the US.
According to research from the First Five Years Fund, as of 2018, more than half of Americans were already living in a child care desert, which is defined as only one available child care spot for every three children in need of care. In child care deserts, the labor force participation rate of moms with young children is 3 percentage points lower than in other areas.
Werklabs research highlights the very real consequences of child care deserts. In our interviews with parents, some moms say staffing shortages have caused child care centers in their areas to reduce operating hours or shut down altogether. For parents who have been able to secure child care, many feel they cannot rely on their child care center to remain open or continue operating at full capacity. Particularly in places where child care options are already scarce, the effects of these changes can be devastating for working families.
“...I feel like our financial well-being is almost being put in jeopardy [because of] the [child care] situation. So that's a little terrifying. But we're still trying to figure things out. And we're hoping that [our daughter’s] child care doesn't shut down. But unfortunately, it's not looking too good at this time.”
Why it matters
Notably, these shortages continue despite an influx of federal aid dollars to child care centers. In 2020, a total of $14 billion was disbursed by the CARES Act and other relief legislation. While stimulus aid has helped many providers keep their doors open, federal dollars have been unable to fully address labor shortages —a primary driver of child care deserts. In fact, the number of child care employees declined precipitously over the course of the pandemic.
Child care providers now say their biggest challenge is attracting workers, particularly in a competitive labor market in which they cannot compete with the wages paid by other employers. According to data from the Bureau of Labor Statistics, the median pay for child care workers in 2020 was just $12/hour. Child care centers have also struggled as a result of pandemic-related health restrictions, as they need to have enough employees to remain open in the case of COVID exposure, and working conditions have become increasingly difficult.
Many of the same hiring strategies implemented across a variety of sectors – including things like competitive wages, benefits and professional development – have been fruitful for child care providers that have managed to hire in recent months. KinderCare, the nation’s largest for-profit childcare provider, hired more than 11,000 workers in 2021, largely by offering many of these perks. But the vast majority of child care providers in the U.S. are small businesses that don’t have the scale to offer workers these benefits, making it even harder to attract top talent. Moreover, with the price of child care already a significant financial burden, many parents cannot afford the tuition it would cost to sufficiently increase worker benefits and wages.
“It was pretty much the only [daycare] that was available in the area. We really [had] no other option but to go there. Since I needed to go back into the office, there were no other options. And it was a little hard, too, because we also had to pay $1,200 a month for [our daughter] to go there. So, between the limited availability [of] places and the income, it was definitely a stressful time for us.”
What's next
In March 2021, Congress passed the American Rescue Plan Act, which allocated $39 billion for child care. While states have until April 2022 to allocate these funds, many governors have already directed funds toward subsidizing the high cost of child care for families and opening new child care centers. But these measures will inevitably fall short of addressing the increasingly urgent issue of child care deserts as long as child care centers remain unable to attract and retain labor. As states roll out their plans for spending these funds, some of the most crucial aspects to watch for will be how they choose to implement funding and programs that aim to stabilize or increase the supply of child care labor.
Some states have already earmarked some of these funds: In January 2022, Michigan Governor Gretchen Whitmer announced $1,000 bonuses to all full time child care staff throughout the state. In Maryland, all child care providers received two rounds of base grants of $10,000, first in October 2021 and then in January 2022.
Final thoughts
As many companies look toward bringing employees back to work in person, child care demand will only continue to increase. Demand will rise even further as companies improve child care benefits to attract workers in an increasingly competitive labor market. The pressure on the child care industry is likely to further increase with more than a third of child care providers reportedly considering quitting or shutting down in the upcoming year.
A lack of accessible, affordable child care is a primary reason women stay out of the workforce. In fact, caretaking is the most common reason women with children experience periods of joblessness.
Werklabs researchers continue to study the realities of child care for families across the US and, more specifically, how the COVID-19 pandemic has impacted those options. We will release our findings in a forthcoming report and webinar on the state of child care today.
Georgia Anderson-Nilsson, PhD
Georgia is a WerkLabs researcher specializing in policy issues and thought leadership related to working parenthood. A new mom herself, she’s passionate about using data-driven approaches to help power better workplaces.
What does child care look like for you and your family? How has the pandemic impacted your child care options? Share your thoughts in the comments below.
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