The September Community Word covered financial threats to child care as government aid was on the verge of ending. Money from the American Rescue Plan Act stopped Sept. 30.
“The basic business model of child care — where it costs more to produce than parents can afford — is further complicated when there is a gap in the workforce where very few receive a reasonable pay for a demanding job,” said Linda Smith, director of the Early Childhood Initiative at the Bipartisan Policy Center think tank.
“Child care has widely been seen as a classic example of market failure,” she continued, talking to Stateline news. “It’s worth understanding because it was bad before COVID, and it has gotten worse.”
The 2021 American Rescue Plan Act included $24 billion to stabilize child-care centers during the COVID-19 pandemic and another $15 billion to boost grants to states to help low-income households with child-care costs. Providers were supposed to use the money to stay open, and some used it to raise salaries to recruit and retain workers. States were permitted to use the funds to help cover child-care costs for low-income families and also essential workers.
The end of such assistance may force more than 70,000 child-care programs to shut down, according to a study from the Century Foundation in June.
“Some states have increased their own investments in child care, providing a cushion against the end of the federal aid,” wrote Stateline reporter Robbie Sequeira, citing new laws and new spending in New Mexico, New York and Washington state.
In the short term, state efforts might save some child-care providers from cutbacks or closures after the pandemic-era assistance ended, but long-term, accessible and affordable child care, centers’ low pay and staff turnover all remain.
“Child care advocates assert that most, if not all, states eventually will need federal help,” Sequeira added.
If so, one idea might come from Canada.
Perhaps considering Scandinavian countries with strong federal support for child care, Canadian lawmakers accepted that public funds could underwrite child care in a nationwide program, and during the pandemic they committed $30 billion over five years to create a Canada-wide early learning and child-care system, according to the Hechinger Report. In the years since, the government initiative started focusing on lowering parents’ child-care fees to $10 a day.
In the system, each Canadian province controls much of its own child-care structure.
Canada’s system is in year 2 of the build-out process and has some of the same challenges Americans face, such as adequate staffing, but already, almost half of its provinces and territories offer regulated child care — for an average of $10 a day.