The Covid-19 pandemic revealed both vulnerabilities and strengths in the American economy, with the child care industry taking the spotlight as daycares closed, schools transitioned to remote learning, and parents struggled to balance work and childcare responsibilities. While employment in the child care sector has mostly returned to pre-pandemic levels, there continues to be a shortage of workers and available slots for children in certain areas, leading to increased costs for families. A report from Bank of America showed a significant increase in child care payments per household, ranging from 15% to nearly 30% year-on-year during the fourth quarter of 2023, with the most significant spikes seen in households earning between $100,000 and $250,000 annually.
Childcare advocates argue that the child care crisis is not just a family issue but also an economic one that affects the entire nation. According to ReadyNation, a group of business executives, the U.S. loses an estimated $122 billion annually due to the infant-toddler child care crisis. This figure has doubled since 2018, exacerbated by the pandemic and insufficient policy actions to address the challenges faced by working families and the companies that rely on them. The loss of taxpayers, amounting to $1,470 per working parent annually, further emphasizes the economic repercussions of inadequate child care support.
One of the proposed solutions to the child care crisis is to support the “workforce behind the workforce” – early child care providers. ReadyNation suggests providing benefits, additional training, and education opportunities for child care providers to ensure a robust and qualified workforce. In California, the economic toll of the child care crisis is estimated at $17 billion, the highest of any state in the country. Child care workers in California have organized to advocate for fair wages and reimbursement for the full cost of providing care, including first-in-the-nation retirement benefits. Despite these efforts, child care providers continue to struggle with low wages, staff shortages, and challenges in attracting new workers to the industry.
Lawmakers acknowledge the progress made in addressing the child care crisis but emphasize the need for further action. State Senator Nancy Skinner, representing parts of the Bay Area and chair of the California Women’s Caucus, highlights the Caucus’ commitment to prioritizing early child care and education. The Caucus successfully advocated for a $2 billion increase in state spending on early care and education over the past two years, totaling $6.5 billion. Maintaining stable reimbursement rates for child care providers remains a focus as the state grapples with budget deficits and the ongoing challenges in the child care sector. Skinner notes that despite low unemployment rates, many sectors are struggling to find and retain workers, underscoring the importance of investing in child care to support working families and the economy as a whole.
The child care crisis exacerbated by the Covid-19 pandemic has laid bare the challenges faced by families, child care providers, and the economy at large. As costs rise, workers shortage persist, and families struggle to find affordable, high-quality child care, the need for comprehensive policy solutions and investments in the early childhood workforce becomes increasingly urgent. By supporting child care providers, enhancing training and education opportunities, and ensuring fair compensation, policymakers can help alleviate the economic burden of the child care crisis and build a stronger, more resilient child care system for the future.