“You don’t have a functioning economy without a strong childcare system” – House Appropriations Committee Chairwoman Rosa DeLauro.
I want to start this letter with a quote that I believe is the best way to describe how crucial the childcare system is to any country, especially in our country where both parents need to work.
The daycare industry faces many problems and challenges: from daycare tuition fees, cost of operating daycare centers, quality of teaching personnel, the list goes on. But today, I want to focus on the problem that affects not only the daycare industry but also the economy.
I want to emphasize how the problem in the daycare industry holds back our country.
We are in the middle of a childcare employment crisis, and we have been for decades. Workers leave daycare jobs, creating a big hole in an industry considered as the backbone of the U.S. economy.
Before the pandemic, the childcare industry was already struggling to meet the demand. PBS reports that before the pandemic, the lack of childcare cost the economy $50 billion. And COVID-19 made the situation even worse. About 126,000 daycare jobs are still open, more than 10% of the pre-pandemic numbers. If the average ratio between a caregiver and children is 1:4, more than 500,000 children are left at home with a parent or relative. According to Washington Post, 1.6M moms of children under the age of 17 still can’t enter the workforce, not because there are not enough jobs, but because there isn’t anyone left to attend to their children. The Economist reported that parents (men or women) taking care of their children are less inclined to go back to work because it is hard to juggle work and childcare.
For families, this means two things: one, the family is losing income – income that could have been spent on the family’s needs such as food, clothing, healthcare, home, insurance, and education. And two, children may not be getting the proper attention they require, especially if parents are overwhelmed, and more so if there is more than one child in the household.
For us in the industry, this means the gap will further increase. Without teachers, we cannot open classrooms for infants and toddlers, no matter how much we want to.
There are already daycare deserts across America. And for communities that do have daycare centers, some are unlicensed. These centers provide cheaper services than licensed daycare centers but offer poor-quality services.
And the problem is not isolated to low-income families and communities. Even middle and high-income families also feel the daycare employment shortage. Parents could not get a slot because daycare centers do not have enough teachers to fill the vacancy.
To put it into perspective, a pregnant mother calling for a slot in a daycare center is already on the waiting list. And if there are no slots available, parents are forced to quit their jobs to either take care of their children or relocate to find a slot in a daycare center while also looking for employment opportunities.
In addition to the lack of daycare workers, retaining quality teachers is another big problem. Daycare workers are leaving their jobs for higher-paying ones in different industries. And those who stay are getting poached by other companies.
Unfortunately, it is hard to increase the salaries of teachers. Currently, salaries eat up 60-80% of the total daycare budget. By increasing salaries, providers will need to increase daycare tuition fees.
On average, daycare fees already cost 10% of the family income or about $10,000 per child – even higher in some states. For single parents, it is worse. Some states report that childcare fees can go as high as 15% of household income.
Sadly, daycares and families absorb most of the cost. Daycares are cutting back on expenses to keep businesses afloat. The longer this continues, the number of daycares closing will increase. As a result, more parents cannot return to work, thus leaving other industries in employment shortage. The cycle goes on until the government and all stakeholders address this.
Our childcare system is about to collapse. To quote Sen. Tammy Duckworth, “I think COVID really illustrated to people how broken our child care system is in a way that people finally understood,”
Good news is that the government is taking action, and it is now closer than ever. President Biden’s Build Back Better Agenda, which appropriates $225 billion in investment towards childcare over 10 years, is bound to address this problem.
This plan is designed to address the main problems encountered by daycare providers and workers. One of the goals is to increase the minimum wage of daycare workers to $15/hour.
However, just making it mandatory without giving any public funding is not only expensive but is also unsustainable. And to pass the cost to the families is out of the picture.
In response, the government is to increase public funding of daycare providers so that a family will pay no more than 7% in child care services. In addition, businesses can apply for grants and subsidies in their respective states.
Additionally, the Build Back Better bill increases tax credits and the number of families that can avail of the credits.
While these changes and their corresponding effect don’t happen overnight, I am positive that this is the step we need to take to give our children, families, and country a better tomorrow. It is up to us to provide our children with all the opportunities they deserve. For if we will not take care of our children, who will?