The US Is Facing a Child-Care Crisis – Here’s What Needs to Be Done To Fix It

There’s a child-care crisis unfolding in this country – full stop. A report published by the Joint Legislative Audit and Review Commission (JLARC) in October made headlines for revealing that an estimated 80 percent of families in Virginia cannot afford child care, which on average ranges between $100 and $440 per week per child. While this study focuses on a single state, the results are a microcosm for a more significant issue sweeping the nation, and one that experts unanimously underscore is not new.

According to Child Care Aware, a nonprofit research and advocacy organization dedicated to making child care more accessible, the national average price of full-time daycare can account for 7 to 18 percent of a married couple’s median income, depending on where they live. The Economic Policy Institute, a research think tank, reports that, in Virginia, the average cost of infant care is $14,000 annually, with the median family income being $77,000. Most states have a direct correlation between average state income and cost of childcare, and when accounting for this, Virginia ranks as the tenth-most expensive state in the US.

Related: Joe Biden Wants to Make Child Care More Affordable For American Families – Here’s His Plan

“Child care has been unaffordable for Virginia families for decades; it’s just that the pandemic highlighted the problem in unprecedented ways, and in ways that employers and policymakers were unable to continue ignoring,” says Angela Wirt, the executive director of Child Care Aware of Virginia. “It finally became abundantly clear during this crisis that available, affordable child care is critical to our economic sustainability.”

Why are we talking about this now? On September 30, 2023, a COVID-era federal funding subsidy ran out, leaving 70,000 daycares and upwards of three million children in the US without funding or care. That raised awareness of issues country-wide that had been mounting for decades. In Texas, for example, 27 percent fewer child-care entities exist in 2023 than in 2020; in New York, a daycare operator was forced to close her operation, making only $3 per hour for each child she cared for after expenses. In California, child care has ballooned 220 percent, costing more than tuition at San Diego State University.

It raises the question – where do we go from here? These are the complicated yet necessary solutions that experts say need to happen to remedy the child-care situation.

The Policy Changes That Need to Happen

1. Passing State- and Federal-Level Funding

The federal funding that expired in September was awarded to about 80 percent of all child-care centers and allowed the owners to cover basic expenses like utilities, rent, and payroll. Without the funding, the research think tank Century Foundation has extrapolated, upwards of 200,000 child-care sector jobs will disappear, and the loss in tax and business revenue will topple states’ budgets, stealing $10 billion of economic activity per year.

“While child care is deeply personal to each family, we must recognize the pivotal role it plays in driving the overall economy, making it a very public issue that deserves systemic and scalable solutions from the federal government,” says Bryan Jamele, head of government affairs and public policy at Care.com.

Several Democratic congresspeople have introduced a bill called The Child Care Stabilization Act to help rectify the funding shortages that will occur given the subsidy expiration. However, nothing has been passed (though it’s worth noting that Congress was at a standstill while the House of Representatives was without a speaker).

At the state level, Wirt maintains that more work is also needed, and she pushes us to understand that accessible child care is not a problem that will be solved with a single piece of legislation. “State investment in child care is most needed, and it’s not one policy or one bill – it’s a concerted, continued investment in supporting early childhood education programs, child-care subsidies, provider incentives and myriad workforce supports,” she says.

Related: Daycare or Nanny? Experts Share the Pros and Cons of Each

2. Increasing the Funds to Child-Care Operators

Remember that child-care worker mentioned above who only took home $3 per child per hour? Keeping child-care costs low so that parents can work and support the economy while also ensuring that daycares have enough funds to support staff and other operating expenses creates a complex dynamic with an inherent push-pull of priorities.

While the specific subsidy policies vary by state, programs typically support low-income families or families where the primary parent is in school. Usually, children qualify to go to daycare centers that are also state- or federally-funded; however, even still, there can be long waiting lists in some areas, and subsidies don’t always cover the total cost of child care.

In Virginia, the Department of Education increased the funds that went to subsidy-backed childcare programs last year. They’ve continually assessed and raised the amounts paid to these facilities to make sure that child-care providers are taken care of, and families receiving subsidies can find the care that they need.

“These approaches seem to be working,” says Wirt. “These program improvements for parents and providers have increased subsidy participation back to or above pre-pandemic levels. We need to keep moving in this forward trajectory; the state cannot afford to backtrack.”

Related: The Harsh Reality of Daycare Costs Forced Me to Quit My Job

3. Continuing To Support Remote Work

At present, the data overwhelmingly suggests that remote work has helped women – who tend to bear the brunt of child-care responsibilities – to make up ground in the workforce. In September, just as the federal child-care subsidies were set to expire, research was released that showed the gender gap was reaching an all-time low. Notably, women with children under age 5 made historic gains in the labor market, with over 70 percent holding down roles.

However, despite this data and other intel that suggests WFH workers are more productive and have lower attrition rates, many companies are pushing for their employees to get back into the office. Salesforce, Disney, Twitter, and more want butts in chairs, and when headlines about the behemoths are splashed on front pages, other CEOs and small business owners might begin to follow suit. One of the best ways to continue the momentum we’ve seen with women gaining ground is to keep work flexible.

4. Strengthen Business Supports for Child Care

While there are many public sector steps to be taken, companies can also strengthen their child-care benefits. “Parents should tap into whatever benefits are offered through their employer, starting with a pre-tax Dependent Care Flexible Spending Account, as well as any other child-care subsidies and backup care options that might be available,” says Jamele, who cites research from Care.com that indicates that almost half of employers are prioritizing child-care benefits.

The task of fixing the broken child-care system will take policy changes and private-sector shifts, and in the interim, we must make immediate changes. “Reach out to your legislators and emphasize how important this all is by sharing your challenges and the urgency of this matter,” says Jamele. “As we approach the upcoming election year, now is the time to create a sea change for child care policies in America.”