Demanding Change: Repairing our Child Care System

The pandemic illuminated how indispensable child care is for the well-being and economic security for our children, families and communities, while simultaneously revealing the system’s many shortcomings. Child care has been underfunded for decades, resulting in an inadequate supply of high-quality programs and too many families priced out of the system. Providers can only charge what families can afford, which often translates into near-poverty wages and limited benefits (if any) for early educators. It is no secret that COVID-19 exacerbated these past and present challenges.

The financial strain of the ongoing COVID‑19 pandemic on providers continues to result in more program closures. Years of undervalued work by child care providers has led to staffing shortages across the country. Parents who already had limited options for affordable, high‑quality child care before the pandemic are facing even fewer options today. This, in turn, is keeping parents, particularly mothers, out of the workforce—hindering the country’s economic recovery. Child care currently exists in a precarious state, and our families, children and communities can’t wait any longer for change.

The silver lining throughout these challenges is that attention is finally being paid to the importance of child care to our communities. A groundswell of support among voters and policymakers for continued investments in child care has emerged. This is the result of sharing data collected on the status of child care and amplifying the experiences of providers and families.

After a year and a half of temporary pandemic relief funding solutions, Congress has the opportunity to provide new long-term investments in the Build Back Better Act. We could be at the turning point for a more equitable system of early learning, as the provisions in this historic, proposed legislation will support our families and communities by funding universal preschool for 3‑ and 4‑year‑olds and funding initiatives that increase wages for child care providers while making high‑quality child care accessible for millions of families. Our demands for change have been heard.

Child Care Aware^® of America’s (CCAoA) research reiterates what has remained consistent throughout the pandemic– that comprehensive policy change that provides long-term, sustainable solutions is needed to transform child care. Our 2020 report, Picking Up the Pieces, focused on how the COVID‑19 pandemic was affecting child care supply, affordability and quality. Demanding Change follows up on our 2020 report and focuses on four aspects of the child care system and the issues impacting them:

Each section of this report features updated child care data gathered from CCAoA’s annual survey of Child Care Resource and Referral agencies (CCR&Rs). The report also features case studies that focus on critical issues facing our country and how they impact the child care system, including equity, COVID‑19, the role of data and the economy. 

Prior to COVID-19, the U.S. did not have an adequate supply of high-quality child care spaces. This was particularly true for marginalized and often-overlooked communities. Black and Latino families are more likely to have someone who works a nonstandard hour schedule, and this type of child care is in short supply nationwide.

The pandemic has only made this supply gap worse. Researchers from UCLA found that 296 child care programs had closed in Los Angeles in 2020 – resulting in a loss of nearly 7,500 slots. A study in North Carolina found a 2% decline in child care programs. While this may seem like a negligible amount, it’s important to remember that child care supply was already dwindling before the pandemic began. Even small dips in the supply of child care can have a catastrophic effect on communities, and certain communities have been more affected than others. The Center for American Progress noted that some predominantly Black and Latino communities will continue to fall behind when it comes to child care supply. The pandemic caused the temporary closure of Migrant and Seasonal Head Start programs, which put a strain on agricultural workers in rural communities. From December 2019 to March 2021, we found a total of 8,899 child care centers closed in 37 states for which we had data. In that same time period, 6,957 licensed family child care (FCC) programs (also known as home-based care) closed in 36 states. This represents a 9% loss in licensed centers and a 10% loss in licensed FCC programs. 

In 2020, our Picking Up the Pieces report examined the supply crisis the U.S. faced before and during the COVID-19 pandemic. We found that prior to the outbreak of the pandemic, the child care supply was decreasing. Our annual survey results showed that between 2018 and 2019, 53% of states reported a decline in the number of child care centers. More alarmingly, 79% of states reported a decline in family child care (FCC) providers. When we compare 2018 data to 2020 data, the picture is grimmer. In total, 24 of the 39 states which completed both surveys reported a loss in the number of centers and center-based slots (64%). For family child care, 31 of 37 states reported losses (84%). As of late 2020, some programs were still listed as temporarily closed and may open again. However, many of these providers are permanently closed.  

There is no doubt the pandemic exacerbated an already fragile child care system. There are several reasons for the severe and sustained crisis in supply. As we will explore in the Workforce section of this report, child care professionals are leaving the field in droves, and they may not return. Years of low wages and lack of benefits, followed by layoffs due to COVID-19, have resulted in severe staffing shortages for child care programs. Without adequate staffing, child care programs cannot accommodate the number of children that they previously could. Owners and directors of child care programs sometimes must fill in as teachers to meet ratio requirements. Many of them have been barely hanging on financially for years, and when COVID-19 hit, they could not overcome the crisis.  

Forging a Path for National Child Care Data

Reliable data support strategic decision-making for improved policies and family choices. Access to timely data empowers parents searching for child care providers that meet their needs and preferences. It enables advocates, policymakers and other change makers to identify critical needs and inequities, generate effective solutions, target policy proposals and investments effectively and subsequently evaluate the effectiveness of investments. Yet, child care data in the U.S. are currently siloed and inconsistently defined across various state, local and non-governmental organizations – making it nearly impossible to get a full picture of the needs and opportunities in our nation’s child care system.  

CCAoA has over three decades of experience in gathering, analyzing and presenting data to illustrate inequities and data-informed solutions for child care. We are also leading the field in using digital technology to link disparate information networks and fill knowledge gaps. 

In 2019, CCAoA announced our partnership with WorkLife Systems (WLS) to leverage cutting-edge technologies tailored specifically to uplift the work of CCR&Rs. CCAoA’s National Data System powered by WLS is built upon these technologies to collect cross-state provider-level supply and demand data.  

Using sharing agreements, common data definitions and transactional interfaces, CCAoA is working together with CCR&Rs to bring these data to life through interactive point-in-time dashboards and advance towards our vision of data interoperability as defined in our recent suite of papers. 

This example dashboard features child care supply data from January 23, 2022.

The Issue of Quality

Quality is often left out of discussion about child care supply. This has been especially true during the COVID-19 pandemic, when the focus was on finding child care options for essential workers. As we grapple with the many issues that our child care system is facing, we must not forget that quality matters. Far too many families still do not have access to high-quality child care due to barriers such as expense and lack of slots in these settings. It is not enough to simply count the number of licensed child care slots in a community. The number of slots in high-quality settings is equally, if not more, important. Time and again, research has shown that children who attend high-quality programs have more positive long-term outcomes, such as higher graduation rates from high school, higher income and better physical health and stronger families. Short-term gains were noted by researchers in the U.K., who found that young children who continued to attend child care during the pandemic made more gains in language development and vocabulary growth. This was especially true for children from low-income families. A meta-analysis of 22 studies found that participation in high-quality early care and education can lead to reductions in special education placement and increases in high school graduation rates. Some estimate that for every dollar spent on high-quality child care, there is a 13% return on investment annually.

But what is quality child care? 

Among other things: Quality care provides the emotional and academic support children need to be school‑ready by the time they enter kindergarten. From infancy, children need strong social‑emotional connections with responsive caregivers. These interactions can lead to future positive outcomes in academics, interpersonal skills, self‑regulation and motivation.

Quality child care is culturally and linguistically responsive and provided by engaged and caring child care providers. Quality child care nurtures the healthy physical development of children by incorporating physical activity time and developmental screening practices, and uses the most recent food safety guidelines in providing healthy meals and snacks. Ideally, quality child care should be easily accessible for all families, regardless of location or socioeconomic status. However, in many communities, quality child care continues to be out of reach of most families.

States have attempted to define quality measures and 43 states and the District of Columbia currently have a fully operational quality rating and improvement systems (QRIS), with an additional 4 states in the process of piloting these systems. These systems vary considerably across the states in terms of provider participation, measures of quality and financial incentives associated with meeting those measures. In many instances, QRIS serves as a classification structure to provide families with a simple resource to understand the quality of area child care programs. According to the National Center on Early Childhood Quality Assurance, QRIS ratings can be applied to early- and school-age care and education programs that meet a set of defined program standards. QRIS ratings are typically on a three-, four- or five-step scale. In most states, participation in QRIS is voluntary.  

The use of QRIS also carries implications around equity. In 2019, the National Center on Early Childhood Quality Assurance found that in states with voluntary participation policies, around 39% of center-based programs participated in QRIS while only 21% of family child care programs participated. CCAoA annual survey data showed that only three states saw increases in the number of QRIS-participating providers from 2019 to 2020.  

National accreditation is another way for child care programs to enhance quality. Accreditation requires child care programs to meet standards beyond minimum state licensing criteria. However, becoming accredited can be a costly and time‑consuming process, especially for FCC providers. CCAoA annual survey data from 2020 showed that only 11% of licensed centers and 2% of licensed FCCs were nationally accredited.

There is evidence that the current QRIS structure is not equitable nationwide. A recent study found that while QRIS participation is higher in communities with higher levels of poverty, it is lower in communities with larger populations of Black families. The Migration Policy Institute outlined barriers that culturally and linguistically diverse (CLD) child care educators encounter when seeking information about and resources through QRIS, including the presumption of a certain amount of English proficiency and the financial means to participate in QRIS.   

Participation in QRIS requires providers to invest time and money. These barriers can be impossible to overcome among programs that are struggling to stay in business during this chaotic time. Additionally, while states have directed considerable investment to QRIS, research suggests that states’ defined quality measures may only show modest improvements in some child outcomes.

As states gain the resources necessary to expand services to more children and families, CCAoA seeks to assist policymakers, advocates and child care providers in developing more consistent definitions and measures of quality that support child development, affirm parent preference and choice, and provide support and resources for all providers, particularly those that are much less represented in current quality improvement efforts, such as FCC, license-exempt providers and providers of color.  

How many young children need child care?  

During which hours of the day do they need child care? 

 What are parents looking for when searching for child care programs?  

These questions can be difficult to answer, especially without timely data. We at CCAoA are the forefront of identifying, adapting and scaling innovative research techniques and data collection methods to answer these and other questions to better understand the demand for child care across the country.

For years, CCAoA has surveyed CCR&Rs and lead agencies to find out the annual price of child care for various provider types and age groups. And each year, we report that child care continues to be unaffordable for too many families in the U.S. During the COVID-19 pandemic, the cost to provide child care has increased due to several factors, including fewer children in the classroom or FCC home and the need to purchase health and safety supplies. As we will explore in the Child Care Workforce section, many child care programs are struggling with staffing shortages. This impacts their ability to care for more children. So although there may be fewer staff members on the payroll, child care programs still have to pay their existing staff with less money coming in. Child care programs need a certain number of children in order to make ends meet and pay for staffing and other expenses. The staffing shortages are contributing to a vicious cycle of increased costs. At the same time, many programs cannot raise prices for parents who are already struggling to pay the current price. For FCC programs, there are fewer data available. However, according to a recent survey of child care providers by NAEYC, FCC homes reported higher enrollment rates than centers, but an average daily attendance rate lower than centers. This could indicate that many children in these programs are only attending part-time or sporadically. Fewer children attending full-time is having a dire impact on FCC programs’ bottom lines. 

Our analysis found that California was the least‑affordable state for infants incenter‑based settings while Our analysis found that California was the least‑affordable state for infants incenter‑based settings while Washington was the least affordable for infants in FCC settings. On average, a married couple with an infant in California paid 16.7% of income for center‑based care. In Washington, FCC for a married couple with an infant would take up 11.8% of annual income. Please see our Appendices for complete rankings of states by age group and provider type.

The chart below provides a comparison of child care prices to other common household expenses by region. In three out of four regions, the annual price of center‑based child care for an infant exceeds the cost of housing. In all four regions, the annual price of child care exceeds the annual cost of in‑state tuition at a public four‑year university.

Price Versus Cost

CCAoA gathers its child care price data through an annual survey of states, who source this data from its most recent market rate survey or through a database of providers that includes prices. While this is valuable information, these prices do not fully represent the true cost to provide care. As noted by the Bipartisan Policy Center, if programs were to charge families the amount that they needed to run at minimum licensing and safety standards, many families would not be able to afford it. The true cost of offering high-quality child care would be even more out of reach for parents. For example, hiring more classroom teachers to reduce the teacher-child ratio beyond minimum licensing would be very costly for a program. This situation puts child care providers in a situation where they need to find additional sources of funding such as grants or risk operating at a loss.

Simply put, there is a difference between price and cost. The following example illustrates this difference. The Center for American Progress released an updated Cost of Child Care calculator, which estimates the true cost for providers meeting minimum licensing standards and how those costs change when different quality indicators are added. In Delaware, this calculator estimated cost to provide care for an infant in a center meeting basic licensing standards is $1,403 per month (or $16,836 per year). The price reported to CCAoA for an infant in a center in Delaware was $11,761 per year. This difference between estimated cost and price was seen in every state. Either way, the point is the same—child care is unaffordable for most families.

If the Build Back Better Act becomes law, participating states would be required to use a cost estimation model or cost study rather than a market rate survey to establish child care subsidy reimbursement rates. Moving away from market rate surveys toward cost modeling methodologies would ensure that child care providers are getting fairly reimbursed for the valuable education they are providing young children. It will also shed light on the continued need for public investment in child care, which can make child care more affordable for families while allowing providers to remain in business.

National Price Averages

Each year, CCAoA generates state-based rankings by affordability — the amount of median household income it would take to cover the average price of child care in that state. In response to multiple requests for a national price of child care, we have attempted these calculations for the past two years. We report three approaches for child care prices for an infant and a 4-year-old in center-based and family child care homes. We discuss each methodology in more detail below. We have not included school-age prices at this time because of the enormous variability in this dataset across the country.  

It is important to understand the following caveats when considering a national average price for child care. Each year, extraordinary efforts are involved in making sure that each state is represented accurately; our team works very closely with CCR&R agency staff to ensure that data is collected as uniformly as possible. However, each state’s child care landscape is nuanced and unique; distinctive differences are lost when attempting to calculate a national average. We generally do not recommend using a national average of child care prices, and particularly not as a standard of comparison with any state’s average prices of child care.  

Despite these reservations, we are reporting these price estimates in response to demand for a national average. We developed three methodologies that take into account such factors as number of slots by age group and number of programs, which could affect the price of child care in states. An explanation of each methodology, along with calculations are below. 

What is the Takeaway?

When examining the overall average of each methodology (both provider types, infant and age 4), we are left with a national annual average price of around $10,174. Without the context explained above, this does not mean much, particularly in a child care landscape that varies so dramatically from state to state.

However, if you take those figures and compare them to the national median income for married couples with children under 18, you can determine it would take more than 10% of household income to cover the child care prices for one child. That is well above the U.S. Department of Health and Human Services (HHS) recommendation that the price of  child care be no more than 7% of household income. For a single parent, this would be 35% of household income.

CHILD CARE PRICES AND INFLATION

To provide additional context for increasing child care prices, a comparison to rates of inflation is useful. The table below shows that for the past two years, the price of child care has exceeded the annual inflation rate. In 2019, child care prices exceeded the inflation rate slightly (0.12%). However, in 2020, these prices exceeded annual inflation by nearly 4%. Families already struggling to afford child care are finding that it is more expensive than ever, and their wages are not keeping pace with price increases.

Source: National average price calculations based on CCAoA annual survey data

**Inflation Rate Source

The child care workforce is facing its biggest crisis yet. In May 2018, the average wage for a child care professional in a center was $11.83 per hour, or $24,610 per year. By May 2020, wages had barely moved, with a child care professional in a center earning an average of $12.24 or $25,460 annually. According to the Bureau of Labor Statistics (BLS), the number of child care professionals in centers dropped from 564,630 to 494,360. A study from Louisiana found that those who worked in private child care programs were more likely to leave the sector entirely compared to those who taught in public pre-K or Head Start programs. Infant and toddler teachers are also more likely to leave the field entirely when compared to those who taught preschool-age children. Family child care (FCC) providers face their own set of challenges that may contribute to leaving the field. In a recent study, FCC providers described feelings of isolation and being underpaid. They often find taking time off for family issues is especially challenging as they do not have substitute staff. Finally, these providers described the stress associated with playing multiple roles in their programs (educator, accountant, custodian, nutritionist, nurse, social worker, etc.). Child care professionals from all settings are underpaid and rarely get the respect they deserve.  

COVID-19 only worsened these existing challenges. There is growing evidence that the child care workforce will continue to shrink due to the stresses brought on by COVID-19. Over 370,000 child care professionals were laid off or lost their jobs in the early days of the pandemic. The child care workforce has only recovered to 84% of pre-pandemic levels – from 1.03 million in November 2019 to 867,200 in December 2020. Although demand for child care is growing as parents return to work, child care staffing shortages are preventing programs from caring for more children. In July 2021, the National Association for the Education of Young Children (NAEYC) released updated results from its survey of child care providers. Four out of five center-based survey respondents reported that they are experiencing staffing shortages. Furthermore, 83% of respondents from minority-owned programs and 88% of respondents working in programs that serve families needing financial assistance reported staffing shortages. These shortages result in longer waitlists, reduced operating hours and fewer children served.  

While the child care system endured many challenges this past year as a result of the COVID-19 pandemic, the passage of the Build Back Better Act would bring historic new federal investments and the promise of change for families and providers across the country.  

For decades, child care has remained unaffordable and inaccessible for too many American families. Those responsible for providing child care and early education to young children have been undervalued as demonstrated by continued low wages and lack of benefits. As a result, more and more are leaving the field entirely, exacerbating an existing staffing crisis nationwide. The much‑needed assistance from the federal government in the form of the CARES Act, Coronavirus Response and Relief Supplemental Appropriations Act, and the ARP Act was a critical first step for the system to recover from the challenges brought on by COVID-19.

However, the Build Back Better Act would address the fact that families and providers across the country need a substantial and lasting transformation to both the child care and early learning system. Now is the time to get to work and repair our child care system so that it works for all families.