The child care industry is in crisis. Since the nation’s patchwork of providers suddenly — and responsibly — shut their doors to prevent the spread of COVID-19, an industry that was already struggling is near collapse. While some childcare centers were able to receive Paycheck Protection Program (PPP) loans, the vast majority of the industry has been largely ignored. Now, the industry received a $3.5 billion in bailout during the first coronavirus stimulus response package. While it seems sizable, experts agree that at the very least, more than 14 times that amount is needed.
So what can be done to save the childcare industry? For answers, we posed this question to five policy experts. Their suggestions ranged from giving localities lots of flexibility over federal funding and fully funding the Child Care Development Block Grant, to treating child care as a public good, rather than a for-profit industry. One thing is certain: the industry is in dire need of a solution. Here’s what they said.
We Need to Allocate Federal Funds Flexibly
Who: Christine Johnson-Saub, Senior Policy Analyst, Center for Law and Social Policy
The federal government needs to put a lot more money into child care for the immediate emergency, and in the long term. The number we’re circling around is $50 billion. That would go a long way towards helping providers, and in turn, families get through this crisis. But then there’s the challenge of, once you have that money, how do you make sure it’s being used to meet the needs that parents actually have? In terms of the types of care they need, the location where they need it, the hours that they need it? That all children have access to high quality, that parents have choices? If they want to use a relative caregiver, can they use funds to do that?
We need to make sure that the way funding is distributed supports the whole range of choices for parents, and reflects what they identify as needs. The only way to do that is really to talk to parents and gather that data both quantitatively and qualitatively, to really understand what the need is. The other big picture need is to sustain providers in a more structural or foundational way. Child care has existed on a child by child payment basis for forever. That is just not sustainable, and particularly not sustainable when providers have to meet high health and safety standards. We need substantive structural support.
So many of our policy decisions are driven by scarcity. Right now, states are making really difficult choices, and some are supporting private pay programs, in addition to programs that accept [government] subsidies. To be clear, those lines aren’t really real — many providers who accept subsidy have a mix [of private paying and subsidized clients], right?
But because of the scarcity of funds, somebody is getting left out in every case, right? Yeah, that’s not good for anyone. We need an infusion of federal funding.
We Need to Treat Child Care As Though It’s K-12
Who: Rasheed Malik, Senior Policy Analyst for Early Childhood Policy, Center for American Progress
There were problems in this industry, but now, they’ve gotten the spotlight shined on them. Caregiving and childcare is now understood to be a crucial part of getting families back into the economy. There are about 50 million parents with a young child in child care and about 13 million of them don’t have any other childcare option, and probably wouldn’t be able to go back to work [unless we bailed out the industry so that child care centers can remain open.]
The cold hard math is that without childcare, you’re not going to get your unemployment rate back down below 10 percent. That’s a hard floor, if you don’t address this crisis now.
The House introduced the Childcare for Economic Recovery Act. That was meant to complement the Child Care Is Essential Act by sending lots of resources out to states so that they can increase the capacity and quality of their networks of childcare providers. But even that is not going to be enough to actually solve the problem, or to begin to solve the problem. It’s a good first step and a down payment.
We have to think about childcare on the scale that we think about public education. This is a whole reimagining of how we support families with young children, and those children themselves, and the childcare workforce. The Biden campaign released their big proposal yesterday. It really does acknowledge that child care is essential and needs to be a part of our economic recovery, and that for way, way too long, we have underpaid and undervalued our childcare workforce, which is 90 plus percent women, disproportionately women of color, who are paid too little. It’s just not a sustainable career path for people, and has consequences for the quality of care that we’re able to invest in.
It’s really disheartening to know that businesses that have industries that have generated billions and billions of profits for investors immediately got their foot in the door in a crisis to make sure that they’re okay. But the real economy, that is represented, in this respect through the childcare industry, needs even more attention, because they’ve just been hanging on.
We’re talking about hundreds of thousands of small businesses that make up many millions of childcare workers who have been sacrificing and subsidizing the work of others, and allowing for others to go to work. [The industry has] a multiplier effect. It’s important for the economy and for families. Everybody who’s in a position of power always says “They want to do everything they can for our kids. They’re our most precious resource, they’re our future.” But when it comes time to set budgets, the United States has spent less on our children, and especially our youngest children, than every other country that we like to compare ourselves with. In the United States, the age group that are the most likely to live below the poverty line are babies that haven’t yet had their first birthday. That is indicative of a broken system and one that values profits over people.
We Need to Pass the Childcare Is Essential Act
Who: Averi Pakulis, Vice President, Early Childhood and Public Health Policy, First Focus on Children
We are asking, along with a number of other advocates, for $50 billion in child care and emergency childcare funding in the next COVID-19 packets that Congress passes. That sounds like a lot of money, and it is a lot of money. It is not too much money, though, for an industry that is an enormous part of our economy. It’s estimated that in order to just maintain the system that’s in place, child care at the top here sector needs $9.6 billion per month, which is pretty, pretty significant.
We are appreciative that Congress thus far has provided $3.5 billion in its emergency COVID-19 legislation that has been signed into law to date, and also the PPP Loan Program, which some childcare providers have been able to access and take advantage of, but the vast majority of them have not. So that is helpful. But what would benefit most providers? A pretty big infusion of $50 billion into the system.
House Democrats, in the HEROES Act, included an acknowledgement of the need for childcare funding, but they only included $7 billion. That’s not even enough to keep the system afloat for a month.
We’re hoping that the Senate will include more it’s its next piece of legislation. I will note that the House, this week, should pass two pieces of child care legislation. One is the Child Care is Essential Act, which would provide the $50 billion that we’ve been asking for. The Ways and Means Committee has a new child care bill that would enhance the Child and Dependent Care Tax Credit and provide some additional mandatory child care money and a few other tax provisions. The House is likely to pass that, as well.
If there is any kind of silver lining, it’s that I think people are learning to appreciate child care more. It’s an equity issue. In the first three months of the pandemic, 300,000 people had lost their jobs in the care sector. So we are talking about child care as a place that parents need for their children, but it also provides hundreds of thousands of jobs across this country.
We Need to Actually Fully Fund the Child Care Development Block Grant
Who: Diane Schilder, Senior Fellow, the Urban Institute
Currently, there are a number of federal laws in place that support childcare and early education, like the Care Development Block Grant. That’s a piece of federal legislation that provides funding for, not only childcare subsidies, but the state’s role in ensuring quality and health safety standards for licensed child care programs. This has been in place for a few decades. One of the issues is that child care subsidies are available for low income parents, but many states do not provide the match that is required [for those parents] and therefore, even though parents might be eligible [for a subsidy,] they miss out on these services. For example, one of the models shows that there are at least 800,000 families who could be eligible for these entities who are missing out. As a result, a lot of children do not have access to services, and child care providers and family child care providers don’t have access to the childcare subsidy dollars that would stabilize the situation for them, especially during a time like right now. So that’s one policy area that is immediately available for lawmakers.
There was additional funding put into the Child Care Development Fund. But again, one of the challenges is related to the state match. Some states are expanding the child care subsidies, and they’re paying providers to stay open. Some are paying providers even if they’re closed to ensure stability so that they’re able to reopen [through the grant].
We Need to Make Sure The Costs of Reopening Don’t Fall to Parents
Who: Aaron Loewenberg, Policy Analyst, Early & Elementary Education, New America
The child care industry is currently in a real crisis. Things weren’t great before COVID. They were already operating on pretty thin profit margins and most healthcare employees were not getting paid well prior to COVID. There’s definitely very significant federal funding we see in the CARES Act — $3.5 billion — but most advocates say we need closer to $50 billion. That is included in the Child Care is Essential Act, which is supposed to be voted on as soon as Monday, actually, in the House.
The HEROES Act, a bill that passed in the house, put $7 billion for the Child Care and Development Block Grant, which is basically childcare funding. The goal is that we get closer to that $50 billion. A survey was put out last week that showed that across the country, enrollment in child care ws, on average, down about 67%. And that two out of five, so about 40, of providers predicted that they would have to permanently close without more public assistance.
So the Center for American Progress put out an analysis showing without significant federal assistance, we can lose about 4.5 million childcare slots, which is about half of our country’s childcare capacity. So in the short term, I would just sum it up by saying we’ve had $3.5 billion in federal funding. We need a lot more closer to that $50 billion figure right? We’ll see what happens when the Senate and the House kind of come together in the next month. It looks like there will be one more big stimulus COVID relief bill before the election, try to get some immediate funding just to kind of stop the bleeding and some of these providers stay open.
With this new world, there are so many more constraints: the number of students, the new requirements for enhanced sanitation, all the different safety requirements, which are necessary, but they’re also costly. It’s hard to pass those extra costs on to parents when parents are already paying a lot of money. So, we need to get as much relief from the federal government in this next bill. But, in the long term, a huge amount of this, of course, depends on the outcomes of the election. If we have a president and a Senate with a Democratic majority, I think you could see a much greater chance to get more federal funding for the child care industry.