COVID-19 Impact Series: Why The Child Care Industry Is On The Brink of Collapse

This blog is part of a series on the impact that COVID-19 has had on the child care industry and children and families in Onslow County.

For far too long, early educators and advocates have been outspoken about the chronic underinvestment and structural challenges that the child care industry faces. But with the COVID-19 pandemic, the true fragility of our nation’s child care system has been completely exposed—and many are worried about what is next for the future of child care in the United States.

Child care providers have historically operated on razor-thin margins, making the pandemic particularly challenging. Millions of child care providers improvised throughout the last year; many reported offsetting the increasing costs of daily operations with their own personal finances.

With a lack of government infrastructure to stabilize the industry, the question for the past year has been: How long can child care providers hold on? And what are the long-term solutions that are desperately needed to reform and evolve the child care ecosystem for lasting, sustainable change?

The Challenges

Child care is too expensive.

According to a study published in 2010, per-child spending overall doubled from the 1970s to the 2000s—and while parents did spend more money on education, toys, and games, the largest expense was child care, which increased by a factor of 21—approximately 2,000 percent—over the course of those 40 years.

The average national cost to provide center-based child care is $1,230 per month. For home-based care, the average cost is $800 per month. In no state does the cost of a center-based child care program meet the federal guidelines of affordability—no more than 7 percent of annual household income. In Onslow County, families spend an average of 21 percent of their income on child care.

Child care is too hard to access.

Not only is child care much too expensive but, for many families, it is nearly impossible to access. In the most recent data from April 2020, 68 percent of families in Onslow County live in a child care desert—a community where there are too few child care slots to meet demand. Additionally, transportation options in Onslow County are extremely limited, further deepening this challenge of gaining access to affordable care.

Child care providers are paid insufficient wages.

The average early educator in North Carolina earns just $10.72 (compared to $11.65 an hour nationally). Early educators with a bachelor’s degree are paid 28.8 percent less on average than their colleagues in their K–8 system; the poverty rate for early educators in North Carolina is 17.6 percent, compared with 10.6 percent of North Carolina workers in general and 2.4 percent of K–8 workers. Approximately 50 percent of child care workers nationwide rely on public assistance to make ends meet.

Child care providers are not making enough money to stay open.

Many child care providers have seen a 47 percent increase in operating costs during the pandemic—a nearly insurmountable challenge for child care providers who often exist on thin margins. In North Carolina, 70 percent of child care centers noted substantial, additional costs due to the pandemic: Staffing (72 percent), cleaning supplies (92 percent), and personal protective equipment (81 percent).

This increase in operating costs has put early childhood providers in a difficult position: In June 2020, one in four early educators in North Carolina reported that they applied for or received unemployment benefits, and 73 percent of programs indicated that they had or will engage in layoffs, furloughs, and/or pay cuts.

Government Support

The pandemic has exposed critical problems within the American child care ecosystem—and it is evident that robust support is absolutely required in order to build a sustainable future for children and parents.

In March 2021, a $1.9 trillion relief package that Congress passed included an additional $25 billion to bail out child care providers—but experts say this isn’t enough for long-term economic recovery.

On April 28, 2021, President Biden unveiled the first half of a two-part infrastructure plan, known as the American Families Plan, that will potentially contribute another $25 billion to support children and families in the U.S., ideally providing additional stability and propel the child care industry away from the brink of collapse.

In addition to a plethora of other support initiatives, the bill outlines a few distinct methods of making the U.S. child care system more sustainable, affordable, and accessible for families and early child care providers:

Cost of Child Care

With the support of the American Families Plan, low- and middle-income families will spend no more than seven percent of their income on high-quality child care. This is projected to save the average family $14,800 per year on child care expenses, support thousands of child care providers and workers, and allow over one million parents to enter the workforce.

Investment in High-Quality Care

Child care providers will receive funding to cover “the true cost of quality early childhood care, including a developmentally appropriate curriculum, small class sizes, and culturally and linguistically responsive environments that are inclusive of children with disabilities.”

Investment in the Care Workforce

The bill will ensure that a $15 minimum wage is paid to early care and education staff—and ensure that those with similar qualifications receive comparable compensation and benefits. It also provides child care workers with professional development opportunities.

Our Impact

At One Place, we are pleased to see federal funding and dialogue around these crucial issues and we look forward to continuing to unpack federal initiatives in support of strengthening and re-envisioning the child care industry.

To support the future of child care, we provide the Quality Enhancement Initiative (QEI) to centers in our community, which includes stipends to enhance overall program quality. We also provide annual bonuses to QEI staff at participating centers.

Additionally, our Child Care Resource and Referral Program educates parents and caregivers on high-quality licensed and regulated early education centers, and provides information on available options in Onslow County. To learn more, click here: https://www.oneplaceonslow.org/for-parents-and-early-educators/

COVID-19 Impact Series: Why The Child Care Industry Is On The Brink of Collapse

Sources Consulted