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The COVID-19 pandemic has brought to the surface the cracks and resilience in the U.S. economy, with child care taking center stage as daycares close, schools stay remote, and parents try to juggle their children and their jobs.
While employment in the child care sector has returned to baseline after the pandemic, according to the latest data from the Bureau of Labor Statistics, a shortage of workers and available places for children in some areas is impacting the sector.
Costs are also higher for families. A February report from Bank of America showed that household costs increased between 15% and about 30% in terms of average child care payments per family, year over year, during the fourth quarter of 2023. The largest increase was seen among households with Average income. Income ranges from $100,000 to $250,000 per year.
Advocates of the policy argue that care for children, including infants and toddlers, is an economic issue that affects all Americans, not just those with young children.
Billions in stabilization funds from the American Rescue Plan Act allocated to the child care sector expired last fall, potentially increasing costs for families or centers that close their doors.
ReadyNation, an advocacy group of more than 2,000 business executives, lobbies to support policies and programs at the state and federal levels that support a strong workforce and economy, including child care.
The group released a report in 2023 that found the nation's infant and toddler care crisis costs the United States an estimated $122 billion in lost profits, productivity and revenue each year. That's up from $57 billion in 2018, before the pandemic exposed and exacerbated gaps in the system for working families and the businesses that depend on them.
The ReadyNation study found that a combination of “Covid-19 and inadequate policy measures has now significantly worsened the crisis.”
“All taxpayers are affected by this. We have to realize that taxpayers lose $1,470 per year per working parent due to lower income taxes paid and lower sales taxes due to the lack of purchasing power of the unemployed,” Nancy said. Fishman, national director of ReadyNation.
Part of the solution at the national level is to support what the group calls “the workforce behind the workforce” — early child care providers.
“Supporting the early childhood workforce can include things like making sure child care providers have benefits. We all know how important benefits are, whether it's health care benefits, or the ability to find high-quality child care for their children. Their children,” Fishman said. For CNBC. “Programs that support additional training and education for child care providers are also important.”
Solutions in the Golden State
In California alone, economic losses, including lost profits, productivity and revenue, are estimated at $17 billion, according to ReadyNation Projects. That's higher than any other state in the country, according to the group's estimates.
While state child care jobs have rebounded to a 2020 baseline as of this spring, according to an analysis from the Center for the Study of Child Care Employment, other states have seen larger job gains after the pandemic.
Some California child care workers organized in 2019, with the Child Care Providers Union, which today represents more than 40,000 licensed and license-exempt child care providers, friends, and family. The providers are part of the California State Support Program, and the union is a partnership between SEIU Locals 99 and 521, as well as UDW/AFSCME Local 3930.
The group won its first contract in 2021 and gained access to the first retirement benefits in the country.
The union says child care providers currently receive compensation at a percentage of the cost of providing care in the state. The average pay for child care providers is $7 to $10 per hour, she said, with many providers reporting no take-home pay.
Providers are currently advocating through the state budget process to be reimbursed for the full cost of providing care to create more dignity in their work, keep providers open and attract new providers into the workforce.
Deborah Corley-Marzet runs a home-based supported care center in Bakersfield, California. She told CNBC that she would like to hire more staff to help support her and her children, but it is difficult to find the right person and offer competitive wages in this environment. For example, low-wage workers in the state's fast food sector earned a historic minimum wage of $20 per hour, putting pressure on other sectors to keep up.
“I'm understaffed. I literally can't afford to hire someone to come and work with me in the morning right now. I can't afford it,” Corley Marzet said. “I don't have enough children right now. But I physically can't have any more children.”
Lawmakers say progress has been made, but there is more work to be done. State Sen. Nancy Skinner, a Democrat who represents parts of the Bay Area and president of the California Women's Caucus, said the group continues to prioritize early child care and education. The group called for a $2 billion increase in state spending over the past two years toward early care and education, for a total of $6.5 billion.
The caucus' current focus is maintaining stable reimbursement rates for child care providers as the state seeks to reduce its budget deficit.
“We have a low unemployment rate, but many sectors of the economy are looking for workers,” Skinner told CNBC. “If your family is in a position where you can't go to work because you don't have adequate care for your children, or because you can't afford child care, you won't be able to do that job that's sitting there, vacant and waiting for you.”
