Child care industry on verge of collapse

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A new report lays out how the COVID-19 pandemic and the response to it have devastated child care providers in a way that could permanently damage the industry – making child care even less accessible and affordable to American parents and their children.

The report, released by Congressman Don Beyer (D-VA-08), vice chair of the Congress Joint Economic Committee, makes it clear that one of the key factors holding back the U.S. recovery is that more parents, particularly mothers, are having to choose between going to work and ensuring their children have safe, quality care.

According to a recent poll, 13 percent of parents have been forced to reduce hours or quit their jobs because of problems with child care, losing a full day of work per week on average.

“Workers cannot get back to work if there is nowhere to send their children,” Beyer said. “This is particularly true for working mothers who are more likely to bear the brunt of closed schools and child care providers. In fact, because of the impact that the coronavirus has had on the child care industry, a generation of social and economic gains made by women may be rolled back in a matter of months.

“Many working mothers have had to cut back their hours or quit their jobs altogether, which will have lasting, long-term impacts on their careers, lifetime earnings and ability to retire,” Beyer said.

Devastating impact

Six months ago, 12 million children ages 5 and under were in some form of child care in the U.S.

Half of the child care providers in business in March have had to close their doors. And even at those still open, enrollment is down 67 percent, according to a survey conducted by the National Association for the Education of Young Children.

According to the report, the U.S. invests less than half as much as European countries in child care, as a percentage of GDP, ranking third from the bottom of the 37 OECD countries.

Most certainly related to that lack of investment, parents in the U.S. who have children in child care spend on average 23 percent of their net income to pay for it.

In many states, parents spend more on child care than they would on a college education.

Also relevant here: the report details that as of 2018, more than 50 percent of American families with young children lived in “child care deserts” – areas where the demand for licensed child care far outpaced the local supply.

This is particularly true for middle-income families who make too much to qualify for child care subsidies and not enough to pay for child care without such support.

“Our nation should treat child care like most other developed countries do—like a public good, not a private benefit,” Beyer said. “Doing so would mean doubling our investment in child care, so parents do not have to choose between going to work and ensuring their children have safe, quality care.”

Time to act

Absent government intervention, the situation is almost assuredly going to deteriorate.

To wit: as of August, approximately 214,000 child care workers – one-fifth of the pre-pandemic level – are still out of a job. In addition, more than four-fifths of child care providers report that if they don’t receive additional public assistance, they expect to close permanently.

The issue there: child care is a direct service, providers can’t cut costs like other businesses do by outsourcing services or entire jobs or replacing them with technology.

They’re a bit hamstrung in that sense by state laws requiring specific staff-to-child ratios and indoor and outdoor space ratios further limit providers’ ability to cut costs.

“Families were struggling to find affordable child care long before the COVID-19 pandemic. Now, the child care industry is on the brink of collapse,” said Congressman Bobby Scott (D-VA-03), chair of the House Committee on Education and Labor. “This report illustrates the need for an immediate and significant investment to keep child care providers open and cut costs for families. Without a strong child care system, parents cannot return to work, businesses cannot reopen, and children lose invaluable learning opportunities in their early years.

“Congress must pass a comprehensive coronavirus relief package that includes robust child care funding to support children, families, and the healthy development of our economy,” Scott said.

Story by Chris Graham


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