In Indiana, Kelly Dawn Jones is getting close to shutting down her in-home child-care center of 14 years, though she worries about leaving families in an impossible position. She cares for five children – all of whom receive government assistance. Anna Powell Denton/The Washington Post
With her toddlers’ day care closing in weeks, Lexie Monigal is back in a familiar bind: desperately searching for child care while contemplating quitting her full-time job as a surgical nurse in Menasha, Wis.
It’s the second time this year her twins’ day care has suddenly announced plans to shutter – both for financial difficulties – leaving her without someone to watch her 2-year-olds and exacerbating a long-standing shortage of child care in this stretch of Wisconsin.
“I’ve called around, searched and searched and searched, and so far, nothing,” said Monigal, 27, who is eight months pregnant with her third child. “I’m getting to the point where I’d rather quit my job and really struggle financially than keep having to worry about finding care.”
Millions of parents – mothers, in particular – could soon be making similar calculations, as states run out of $24 billion in stimulus money Congress had set aside for child care during the pandemic. That record investment has helped keep the industry afloat by propping up workers’ salaries, boosting training programs and waiving family payment requirements.
Now, with the last of that money expiring this month, an estimated 70,000 child-care programs – or about one in three – could close as a result of lost funding, causing 3.2 million children to lose care, according to a study by the Century Foundation, a liberal think tank. That translates to $10.6 billion in lost U.S. economic activity, researchers found, adding new strain to a nation already struggling with a profound lack of child care.
“It isn’t just individual children or parents that will be impacted, it’s the economy as a whole,” said Julie Kashen, a senior fellow at the Century Foundation. “When more than 3 million children lose care, that means all of those parents are going to have to figure out something else or reduce their work hours or leave their jobs altogether.”
The expiration of federal funding comes at a precarious time for the U.S. economy, which is already slowing after a period of brisk post-pandemic growth. Job openings are at a two-year low, home sales are declining and more Americans are missing payments on car loans and credit cards. And although overall price growth is stabilizing, child-care costs have risen faster than inflation for five straight months. Experts say day-care fees, which are already among the highest in the world, are expected to rise even higher in coming months as supply dwindles.
Politicians on both sides have stressed the need for more affordable and accessible child care, but serious obstacles remain. Democrats in Congress are calling for $16 billion in emergency child care funding this year, though such efforts appear unlikely at a time when Republicans are pushing to slash safety-net programs. Meanwhile, the government is on the brink of a shutdown because of widespread disagreement over budget policies.
Despite the recent influx of federal money, the child-care industry has been teetering on the edge since the pandemic forced sudden and widespread shutdowns across the country. An estimated 20,000 child-care centers – or 1 in 10 nationwide – permanently closed in the first two years of the pandemic, according to the Century Foundation. Hundreds of thousands of workers lost their jobs as a result, and many more quit for less demanding, higher paying jobs. Today, the industry remains short 40,000 positions from early 2020 levels. Experts say another 232,000 jobs could be on the line as government funding expires, just as the labor market cools. The unemployment rate rose to an 18-month high in August at 3.8 percent.
“This extra money, it was helping us stay on our feet,” said Cynthia Davis, 53, who has a master’s in early-childhood education and runs a 24-hour child-care center in Northwest Washington, D.C. “But now we’re back in the same ditch we were in before. I can’t even afford to pay myself a minimum wage.”
The closure of a single facility can have large ripple effects, especially in areas with few child-care options. More than half of Americans – particularly low-income families, people of color and those in rural areas – live in “child care deserts,” according to the left-leaning Center for American Progress.
Overall, the United States is already short about 3.6 million child-care slots, according to Child Care Aware, a nonprofit advocacy group.
“The pandemic laid bare and exacerbated what was already a tenuous situation in child care,” said Melissa Boteach, vice president of income security and child care at the National Women’s Law Center. “The American Rescue Plan was a lifeline. And when this money dries up, it will be a slow roll toward making the country’s child-care deserts even drier.”
Ashton Nelson, a mother of four in Calvert County, Md., is dealing with the fallout of her children’s day care closing last week. She quickly found a preschool for her 4-year-old daughter. But her son, 20 months, has been at home all week, while Nelson pieces together help from grandparents, siblings and friends so she and her fiancé can go to work.
Day-care wait lists are years long, in part because so many area centers have recently closed, she said. A nanny would be too expensive. And neither Nelson, a secretary, nor her fiancé, who does maintenance work for local school systems, can work from home.
“It’s one big frustrating jumble,” Nelson, 32, said. “Will I eventually have to quit my job? Of course it’s something that’s crossed my mind but it’s not a decision I can make lightly when I carry our family’s health insurance. But if things fall through, what can I do? I can’t call out every day.”
Economists say the impending rollbacks could deal a disproportionate blow to mothers, who have returned to work at record rates since the pandemic. The share of women in their prime working years in the labor force, at more than 77 percent, is near an all-time high and has helped prop up much of the economy’s recent strength. But child-care disruptions could threaten those gains and lead to worsening worker shortages in industries such as nursing, teaching and hospitality, which have all struggled to refill their ranks since the start of the pandemic.
“If you have young children, you can’t work without child care,” Boteach said. “That means you’re going to likely see more women being pushed out of the labor force. And you’re going to see businesses having an even harder time finding people to hire.”
In Indiana, Kelly Dawn Jones is inching closer to shutting down her in-home child-care center of 14 years, though she worries about leaving families in an impossible position. She cares for five children – all of whom receive government assistance – while their parents work as pharmacy techs, delivery drivers and kitchen staff at local hospitals.
“I have parents say to me, ‘Thank God you’re still open because that’s the only way I can get to work,'” Jones, 49, said. “But I honestly don’t know how much longer I can hang on.”
Money is so tight that she had to lay off two longtime teachers last month, leaving Jones to single-handedly run her center. She receives between $157 and $203 per child in state reimbursements each week, but those payments are often late, she said. She’s dipped into her own savings and borrowed from friends to buy groceries and cover basic upkeep.
“These days, all I can think about is closing,” she said.
Home child-care centers like Kelly Dawn Jones’s, which disproportionately serve low-income and rural children, are among those at highest risk of closure. Money is so tight Jones had to lay off two longtime teachers last month, leaving her to single-handedly run the center. She receives between $157 and $203 per child in state reimbursements each week, but those payments are often late, she said. She’s dipped into her own savings and borrowed from friends to buy groceries and cover basic upkeep. Anna Powell Denton/The Washington Post
Home child-care centers like Jones’s, which disproportionately serve low-income and rural children, are among those at highest risk of closure. More than 97,000 licensed family child-care homes have shuttered since the early 2000s, cutting the overall industry by nearly half, Department of Health and Human Services figures show. Another several thousand more are expected to go dark this year, experts say, as pandemic-era funding expires.
That is expected to put even more pressure on families with young children. Child-care costs are already ticking up much faster than inflation: Day-care and preschool fees have risen 6 percent in the past year, nearly double the overall inflation rate of 3.2 percent, government data show.
Last year, U.S. child-care costs ate up 23 percent of income for average-wage families, up from 12 percent in 2021, according to data from the Organization for Economic Cooperation and Development. Now many worry the financial burden on families will become even greater as government help dies off.
Child-care providers say a mix of high expenses and low wages have made it exceedingly difficult to stay afloat. Caring for children, especially young ones, is labor-intensive and costly: Many states require one caretaker for every three or four infants. Add in insurance, staff training and rent, and many say they are barely eking by.
Janna Rodriguez, a child-care provider in Long Island, hasn’t taken a salary since January. Keeping up with inflation has been such a struggle that last year, she didn’t pay herself for nine months.
Almost all of the 16 children she cares for rely on federal assistance. But the money isn’t enough to cover her costs: Monthly rent has risen 20 percent to $4,100 in the last three years. Electricity, water and liability insurance are all up 25 percent.
Meanwhile, her food bill has more than doubled, from about $800 a month to $1,800. Every other weekend, Rodriguez, 33, spends a half-day driving to three grocery stores – BJ’s Warehouse, Walmart and Trader Joe’s – to buy milk, fruit and meat for the children’s breakfasts, lunches and snacks.
“I’ve had to sacrifice my own financial independence to be able to provide not just for the children, but making sure my staff are paid,” she said. “Even with that, the only thing I can afford to pay is minimum wage. Who wants to do this work when you have a bachelor’s degree or master’s degree and are making less than what you would at McDonald’s?”
Back in Wisconsin, Lexie Monigal is hoping to hire a nanny even though that means her monthly child-care costs could double to $3,200. It’s a last-ditch effort, she said, before she considers leaving the workforce until her youngest child enters kindergarten. Quitting her job would be less than ideal: She would have to pay back a substantial signing bonus if she leaves before her two-year contract ends and would lose her family’s health insurance.
“I’m really trying to keep working, but if this doesn’t work, or it ends up being too astronomical, there’s literally nothing else I can do,” she said. “We don’t have any other option.”
Send questions/comments to the editors.
