RuralOrganizing.org polling has shown repeatedly that rural Americans want solutions focused on increasing jobs and wages, decreasing daily expenses, and improving their quality of life, but these goals are unattainable without available, affordable, high-quality child care.
Our child care economy is broken on all fronts – child care businesses are barely squeaking by, child care workers are living in poverty, and families cannot afford, or in rural areas, even access, child care.
Federal policy is needed to reduce the costs of child care and improve the number and quality of child care jobs and to convert our child care economy so that this public good is no longer treated as a private consumer service. Additional investment in current programs, such as the Child Care and Development Block Grant (CCDBG) will help, and reforms are also needed to the delivery of these federal programs to ensure child care providers can cover the true costs of providing high quality early childhood programs.
While federal interventions are necessary to begin managing child care as a public good, bringing back the Expanded Child Tax Credit will provide families with an immediate way to get by, recovering the benefits of incredible poverty alleviation and improved access to child care we saw with this temporary relief during the COVID-19 pandemic.
CHILD CARE IS A PUBLIC GOOD TREATED AS PRIVATE
A thriving national economy depends upon labor force participation and a full economic recovery requires eliminating the gender gap in workforce participation largely attributable to gendered child care expectations (just ask Vice President Kamala Harris). One calculation estimates our economy is losing out on $57 Billion in lost earnings, productivity and revenue due to the lack of child care infrastructure. But still, child care in the United States continues to operate as a private option instead of the public good it is.
Treasury Secretary Janet Yellen herself showed that the United States’ gross domestic product could be 5% higher if women participated in the workforce at the same rate as men, a barrier that stubbornly continues to be in place due to gendered child care expectations. And to verify the data, women routinely report leaving the workforce when child care is unavailable.
Universal child care and generous paid leave programs approach the equalized labor force participation the American economy needs, and privatized business models simply cannot provide this – the government must. A study by the Bipartisan Policy Center demonstrated that 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.
Indeed, a study from the Center for the Study of Childcare Employment at the University of California Berkeley found that “a values-based budget for early care and education that ensures a well-qualified and fairly compensated early care workforce providing a high standard of care for the children of [Alabama] would cost from $4.7 billion to $6.4 billion, or $27,000 to $29,000 per child, annually, when fully phased in.”
Emerita Professor of Management at the MIT Sloan School of Management Lotte Bailyn pointed out that the vast majority of people paying for child care are families who are typically at the beginning of their earnings trajectory, which makes the financial burden all the harder to manage, adding additional inequity to a broken child care ecosystem which treats work as an obligation but child care as a luxury.
OUR CHILD CARE ECOSYSTEM IS BROKEN, ESPECIALLY IN RURAL PLACES
Child care systems are in need of an overhaul. In 2010, families who made less than $1,500 per month with children under the age of five spent more than half of their monthly income on child care expenses (52.7%). Subsidies aren’t reaching these families – only about 30% of low-income families using center-based child care, and 16% using an in-home care center for a child under the age of six, received subsidies. Most subsidies come in sporadic and unpredictable reimbursements, meaning families or providers are required to pay upfront without knowing when or if the financial relief will come.
The picture is even harder in rural areas where nearly two-thirds of rural families live in a child care desert and lack of child care is extreme for infants and toddlers, with babies outnumbering licensed child care slots by 9-to-1 across rural counties. Lack of child care is contributing to population loss in rural communities as families see no option but to relocate.
Further, rural families have unique child care needs such as nontraditional hours. However, child care offerings in rural communities often fail to simply have enough child care openings for each child that needs one and rural families struggle even more with finding quality child care that meets their preferences, such as a child care center providing school-readiness programming.
Child care is also more expensive for families who face other systemic barriers to social equity: single parent families and multiracial households face higher costs, as percentage of their household incomes, than those in single race/ethnicity and married households.
While accessing child care is hard for families, providing child care is equally challenging. Child care jobs are a labor of love, but not sustainable for most. Because child care programs cannot charge the true cost of their programs to parents, educators subsidize the child care system with their low wages and poor quality jobs. In spite of 75% of early educators attending college, many live in poverty.
While most parts of the economy have shown a rebound post-pandemic, child care businesses have not – data collected in May 2022 showed that while 34% reported that their programs experienced staffing shortages prior to COVID-19, nearly double that amount -61% – reported that their programs were currently experiencing shortages in May of 2022. In spite of this extreme demand, the bar chart above shows that most child care providers struggle to meet their own basic needs in these jobs.
FEDERAL POLICIES CAN FIX CHILD CARE
Fixing child care access, affordability, and quality is doable, and falls into two buckets: reduce the costs through more effective federal subsidization and increase federal support for child care jobs and wages to make child care businesses and child care work viable.
Reduce Child Care Costs
Reinstitute the Expanded Child Tax Credit. Putting more money into the pockets of individuals is proven as the most effective way to enable everyday people to meet their basic needs. Columbia University’s Center on Poverty and Social Policy published a July, 2021 report showing that the Expanded Child Tax Credit lifted over 3 million children out of poverty in the first month and the credit supported 59.3 million children nationwide. Getting extra money in pocket without state, local, or social service intermediaries allows families to meet their needs in the way that fits their situation best.
Expand universal pre-K to all children – Universal preschool, provided via Head Start for over 50 years, should be expanded to all children. Universal preschool reduces family cost burdens and equalizes access to early childhood education (ECE), provides higher quality ECE jobs than a privatized preschool economy (on average, the pay is $6.70 higher for the same job in a public school), and delivers economy-wide benefits in reduced social deviance, higher educational performance and college attendance, greater workforce participation, and lower use of safety net programs in adulthood.
Reform and bolster funding to child care, including the Child Care and Development Block Grant (CCDBG) and the Preschool Development Grant Birth Through Five (PDGB5) Program.
Currently, the CCDBG, provides child care to only 15 percent of eligible families due to funding limitations and bureaucratic hurdles. Head Start similarly offers subsidized e
RuralOrganizing.org polling has shown repeatedly that rural Americans want solutions focused on increasing jobs and wages, decreasing daily expenses, and improving their quality of life, but these goals are unattainable without available, affordable, high-quality child care.
Our child care economy is broken on all fronts – child care businesses are barely squeaking by, child care workers are living in poverty, and families cannot afford, or in rural areas, even access, child care.
Federal policy is needed to reduce the costs of child care and improve the number and quality of child care jobs and to convert our child care economy so that this public good is no longer treated as a private consumer service. Additional investment in current programs, such as the Child Care and Development Block Grant (CCDBG) will help, and reforms are also needed to the delivery of these federal programs to ensure child care providers can cover the true costs of providing high quality early childhood programs.
While federal interventions are necessary to begin managing child care as a public good, bringing back the Expanded Child Tax Credit will provide families with an immediate way to get by, recovering the benefits of incredible poverty alleviation and improved access to child care we saw with this temporary relief during the COVID-19 pandemic.
CHILD CARE IS A PUBLIC GOOD TREATED AS PRIVATE
A thriving national economy depends upon labor force participation and a full economic recovery requires eliminating the gender gap in workforce participation largely attributable to gendered child care expectations (just ask Vice President Kamala Harris). One calculation estimates our economy is losing out on $57 Billion in lost earnings, productivity and revenue due to the lack of child care infrastructure. But still, child care in the United States continues to operate as a private option instead of the public good it is.
Treasury Secretary Janet Yellen herself showed that the United States’ gross domestic product could be 5% higher if women participated in the workforce at the same rate as men, a barrier that stubbornly continues to be in place due to gendered child care expectations. And to verify the data, women routinely report leaving the workforce when child care is unavailable.
Universal child care and generous paid leave programs approach the equalized labor force participation the American economy needs, and privatized business models simply cannot provide this – the government must. A study by the Bipartisan Policy Center demonstrated that 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.
Indeed, a study from the Center for the Study of Childcare Employment at the University of California Berkeley found that “a values-based budget for early care and education that ensures a well-qualified and fairly compensated early care workforce providing a high standard of care for the children of [Alabama] would cost from $4.7 billion to $6.4 billion, or $27,000 to $29,000 per child, annually, when fully phased in.”
Emerita Professor of Management at the MIT Sloan School of Management Lotte Bailyn pointed out that the vast majority of people paying for child care are families who are typically at the beginning of their earnings trajectory, which makes the financial burden all the harder to manage, adding additional inequity to a broken child care ecosystem which treats work as an obligation but child care as a luxury.
OUR CHILD CARE ECOSYSTEM IS BROKEN, ESPECIALLY IN RURAL PLACES
Child care systems are in need of an overhaul. In 2010, families who made less than $1,500 per month with children under the age of five spent more than half of their monthly income on child care expenses (52.7%). Subsidies aren’t reaching these families – only about 30% of low-income families using center-based child care, and 16% using an in-home care center for a child under the age of six, received subsidies. Most subsidies come in sporadic and unpredictable reimbursements, meaning families or providers are required to pay upfront without knowing when or if the financial relief will come.
The picture is even harder in rural areas where nearly two-thirds of rural families live in a child care desert and lack of child care is extreme for infants and toddlers, with babies outnumbering licensed child care slots by 9-to-1 across rural counties. Lack of child care is contributing to population loss in rural communities as families see no option but to relocate.
Further, rural families have unique child care needs such as nontraditional hours. However, child care offerings in rural communities often fail to simply have enough child care openings for each child that needs one and rural families struggle even more with finding quality child care that meets their preferences, such as a child care center providing school-readiness programming.
Child care is also more expensive for families who face other systemic barriers to social equity: single parent families and multiracial households face higher costs, as percentage of their household incomes, than those in single race/ethnicity and married households.
While accessing child care is hard for families, providing child care is equally challenging. Child care jobs are a labor of love, but not sustainable for most. Because child care programs cannot charge the true cost of their programs to parents, educators subsidize the child care system with their low wages and poor quality jobs. In spite of 75% of early educators attending college, many live in poverty.
While most parts of the economy have shown a rebound post-pandemic, child care businesses have not – data collected in May 2022 showed that while 34% reported that their programs experienced staffing shortages prior to COVID-19, nearly double that amount -61% – reported that their programs were currently experiencing shortages in May of 2022. In spite of this extreme demand, the bar chart above shows that most child care providers struggle to meet their own basic needs in these jobs.
FEDERAL POLICIES CAN FIX CHILD CARE
Fixing child care access, affordability, and quality is doable, and falls into two buckets: reduce the costs through more effective federal subsidization and increase federal support for child care jobs and wages to make child care businesses and child care work viable.
Reduce Child Care Costs
Reinstitute the Expanded Child Tax Credit. Putting more money into the pockets of individuals is proven as the most effective way to enable everyday people to meet their basic needs. Columbia University’s Center on Poverty and Social Policy published a July, 2021 report showing that the Expanded Child Tax Credit lifted over 3 million children out of poverty in the first month and the credit supported 59.3 million children nationwide. Getting extra money in pocket without state, local, or social service intermediaries allows families to meet their needs in the way that fits their situation best.
Expand universal pre-K to all children – Universal preschool, provided via Head Start for over 50 years, should be expanded to all children. Universal preschool reduces family cost burdens and equalizes access to early childhood education (ECE), provides higher quality ECE jobs than a privatized preschool economy (on average, the pay is $6.70 higher for the same job in a public school), and delivers economy-wide benefits in reduced social deviance, higher educational performance and college attendance, greater workforce participation, and lower use of safety net programs in adulthood.
Reform and bolster funding to child care, including the Child Care and Development Block Grant (CCDBG) and the Preschool Development Grant Birth Through Five (PDGB5) Program.
Currently, the CCDBG, provides child care to only 15 percent of eligible families due to funding limitations and bureaucratic hurdles. Head Start similarly offers subsidized early childhood education programs but only serves about 7 percent of eligible children under age three. Reimbursing providers robustly and based on enrollment, not attendance, will help ensure eligible children get the support they deserve.
Support comprehensive work-family policies – these include a child care spending cap indexed to the state median income, a guaranteed living wage and job quality standards for early education workers (such as health insurance), and federal funding for paid family and medical leave. Indeed, 90 percent of Democrats, 70 percent of independents, and 70 percent of Republicans support efforts in Congress to increase funding for child care assistance and to expand access to early learning.
Increase Federal Funding for Child Care Jobs and Wages
Many of the solutions above can address both quality jobs and wages and child care costs simultaneously. In addition, the following policy recommendations can help ensure that child care providers are supported to ensure child care is accessible and high-quality, in addition to being affordable.
Increase funding to existing federal programs which fortify the rural child care supply – programs like the Rural Innovation Stronger Economy (RISE) grant program have the flexibility to create new child care slots or businesses in rural communities.
Leverage the Community Reinvestment Act – Because of the demonstrated economic development impacts of investing in early childhood education, banks and rural communities, alike, can benefit from linking child care investments to bank obligations under the Community Reinvestment Act, especially in rural areas.
Invest in innovative models – Rural stakeholders are innovating solutions to child care challenges like cooperative businesses and employer-provided child care. Federal policy should reduce barriers to, increase equity in, and bolster funding for these innovations and others which are solving the availability, affordability, and quality concerns of rural child care.
Ensure child care funding reaches rural communities – the Department of Health and Human Services, the Department of Labor, Employment and Training Administration, state governments, and nonprofit organizations are working to create solutions for our broken child care economy. Federal policies must provide a rural guarantee for federal child care funds and target funding to the most distressed communities to ensure rural communities are not left out of solutions in child care access and affordability.
arly childhood education programs but only serves about 7 percent of eligible children under age three. Reimbursing providers robustly and based on enrollment, not attendance, will help ensure eligible children get the support they deserve.
Support comprehensive work-family policies – these include a child care spending cap indexed to the state median income, a guaranteed living wage and job quality standards for early education workers (such as health insurance), and federal funding for paid family and medical leave. Indeed, 90 percent of Democrats, 70 percent of independents, and 70 percent of Republicans support efforts in Congress to increase funding for child care assistance and to expand access to early learning.
Increase Federal Funding for Child Care Jobs and Wages
Many of the solutions above can address both quality jobs and wages and child care costs simultaneously. In addition, the following policy recommendations can help ensure that child care providers are supported to ensure child care is accessible and high-quality, in addition to being affordable.
Increase funding to existing federal programs which fortify the rural child care supply – programs like the Rural Innovation Stronger Economy (RISE) grant program have the flexibility to create new child care slots or businesses in rural communities.
Leverage the Community Reinvestment Act – Because of the demonstrated economic development impacts of investing in early childhood education, banks and rural communities, alike, can benefit from linking child care investments to bank obligations under the Community Reinvestment Act, especially in rural areas.
Invest in innovative models – Rural stakeholders are innovating solutions to child care challenges like cooperative businesses and employer-provided child care. Federal policy should reduce barriers to, increase equity in, and bolster funding for these innovations and others which are solving the availability, affordability, and quality concerns of rural child care.
Ensure child care funding reaches rural communities – the Department of Health and Human Services, the Department of Labor, Employment and Training Administration, state governments, and nonprofit organizations are working to create solutions for our broken child care economy. Federal policies must provide a rural guarantee for federal child care funds and target funding to the most distressed communities to ensure rural communities are not left out of solutions in child care access and affordability.
