THE CASE FOR A CHILD CARE STABILIZATION FUND

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Our nation’s long-term well-being depends on a child care industry that works for every family. In addition to the proven benefits of high-quality child care to a child’s learning and healthy development, access to care is an
essential pillar of America’s labor market and economy. Sixty-seven percent of children under age 6 in the United States have all available parents in the labor force, which means millions of American workers rely on child care just to be able to go to work each day. Unfortunately, the COVID-19 pandemic has pushed an already-struggling child care industry to the brink of collapse.

Dedicated relief through a Child Care Stabilization Fund will enable states to provide grants to struggling child care providers to help shore up the market and ensure parents have access to the care that will allow
them to return to work.

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The Challenges Child Care Providers Face in Reopening, And States’ Efforts to Help

A new blog from the Bipartisan Policy Center (BPC) highlights the different challenges facing child care providers and state administrators across the country as they work to reopen child care centers.

For child care providers, the barriers for reopening and staying open are twofold: higher costs and lower revenues. Already operating on slim margins prior to the COVID-19 pandemic, providers now have to contend with retrofitting their facilities and reducing their class sizes to fit ever-changing safety protocols. On top of that, providers are also seeing lower enrollment and attendance amid parents’ safety concerns about sending children back into care.

Recognizing the importance of child care for getting Americans back to work, state governments are using what’s left of the supplemental Child Care Development Block Grant funds provided through the CARES Act to support child care providers reopening. However, that funding is quickly running out, requiring states to look to other programs and local governments to help fill in the gaps.

Last month, BPC hosted a roundtable with 10 state child care administrators to discuss how states are using the funding made available through the CARES ACT, including the challenges they’ve faced. Many of the states reported that they expected CARES funding to run out shortly, reaffirming that a more substantial and targeted approach is needed from Congress to further stabilize the child care industry. Read more from Bipartisan Policy Center.

New Interactive Tool Shows How COVID-19 Has Exacerbated Child Care Deserts

The Center for American Progress (CAP) Early Childhood Policy team released an update to their expansive child care deserts interactive tool, designed to showcase and assess with greater clarity the communities where there may be the greatest immediate need for child care investment when considering stabilizing and re-opening the wider economy.

An accompanying issue brief summarizing trends and findings demonstrates that the child care crisis has important implications for income and educational inequality, racial equity, geographic equity, and predicts a potentially significant decline in the number of mothers in the labor force.

In the wake of the pandemic, child care closures will be concentrated in low-income and middle-income neighborhoods, according to the report. Additionally, based on conditions that previously existed, Black and Hispanic communities are likely to experience worsening child care deserts during the pandemic. The pandemic also exacerbated child care shortages in rural areas. Without a significant investment in child care, parental employment in rural areas could decline more than in metro areas. Read more from the Center for American Progress.

Families are Losing Child Care Options as Economy Reopens

America needs child care relief to keep the industry afloat during the nation’s economic recovery from the COVID-19 pandemic. The disastrous economic crisis has hit the child care industry especially hard, causing widespread layoffs and closures as a result of catastrophic drops in enrollment. And while the nation’s economic recovery from this crisis will be a slow, phased process, child care providers will be expected to be open to care for children as parents return to work, while operating on financial losses for months to come due to new social distancing requirements and continued low enrollment. Providers will also face increased operating expenses to meet new and important health and safety standards.

The devastating impact of these financial realities cannot be sustained without direct federal investments that ensure child care providers can keep their doors open to meet the needs of children and families.The situation varies from state to state, and even from community to community. Here’s a look at recent news coverage and analysis of the nation’s child care crisis.

THE LATEST: Chilling new data from the results of a nationwide survey released by the University of Oregon’s RAPID-EC Research Group finds that almost half of working families have lost the child care arrangements they were using before the pandemic. This issue is particularly pressing for lower-income families, with 48% of lower-income households reporting that they don’t have the ability to return to their previous child care arrangement. Read more here.

WHY CHILD CARE NEEDS RELIEF: As the economy begins opening in states like California – the world’s fifth largest economy – the fate of the recovery depends on the state of child care, according to reporting in Politico. The pandemic has forced many providers to close due to steep revenue losses and the rising costs associated with reopening clean, healthy facilities for children, and experts say even a small percentage of closures would have widespread impacts on the economy.

THE STATES: Reports coming in from across the country paint a bleak picture for the child care industry. Child care providers in Alaska are struggling to make ends meet without relief, and as many as one-third of North Carolina’s child care programs remain closed as parents return to work. One Washington child care provider estimates that the cost of reopening and limited enrollment have raised the cost to serve children by 250 percent, an unsustainable increase for an industry that already operated on slim margins before the coronavirus pandemic.

STORIES TO READ: Darlene Mount cares for the children of emergency personnel at the YMCA of Greater Monmouth County, New Jersey and has shared what it is like being a child care provider during the coronavirus with TIME. She recounts the challenges she faces as a hands-on provider who cannot physically connect with her children during this health crisis.

IN CASE YOU MISSED IT: A new, first-ever analysis and ranking of how each country in America protects and provides for its children has found that communities of color, especially in rural, impoverished, Southern areas of the United States are the most disadvantaged. The rankings are based on four factors that cut childhood short: hunger, dropping out of school, teenage pregnancy, and early death due to poor health, accident, murder, or suicide. Read more about this Save the Children report here.

WHAT WE ARE READING: As COVID-19 Threatens Millions of Child Care ‘Slots,’ Families Face Deep Disruptions to Their Children’s Early Learning and Social Development and to Their Own Jobs: Early learning and child care advocates estimate that the COVID-19 pandemic could eliminate 4.5 million child care slots due to providers permanently closing their doors. These slots represent the children who are missing out on access to high-quality early learning and parents who rely on child care in order to go to work every day. This will have long-term effects on children, families, and economies. Read more from The 74 here.

New Poll Shows Child Care Is Inaccessible for Many Working Families

More than four million child care slots at risk as American households prepare to return to work

WASHINGTON—New data released by the University of Oregon’s RAPID-EC Research Group finds that almost half of working families have lost the child care arrangements they were using before the pandemic. This issue is particularly pressing for lower-income families, with 48% of lower-income households reporting that they don’t have the ability to return to their previous child care arrangement.

Overall, the loss of child care supply due to the pandemic could result in a permanent loss of 4.5 million child care slots. This new data makes this clear: without their previous child care options, a significant proportion of working parents may be unable to return to work. As the economy reopens, we won’t be able to return to pre-pandemic business-as-usual if millions of parents are unable to access reliable child care.

Although COVID-19 has created an acute child care crisis in the U.S., the pandemic is not fully to blame. Even before the pandemic, the child care system was under pressure and many families lacked access to quality care, with 3 in 5 rural communities identified as child care deserts.

According to RAPID-EC’s survey, the majority of working families are worried and anxious about returning to child care, and over half of these families said that either they or their partner will provide child care in the next month. Meanwhile, child care providers are in a double bind as they face increased costs to reopen, as well as significantly reduced capacity due to safety measures and concern from parents who may not bring their child back to their provider.

These statistics underscore the challenges that face the child care industry due to its unique business model. Quality child care is an expensive service to provide, but providers often keep tuition rates low enough for families to afford, while covering basic expenses such as payroll and rent. Most providers only break even if they are operating at full or close to full capacity, meaning that reduced enrollment will further damage the industry. The pandemic has only exacerbated the financial struggles of a child care system that was already struggling financially.

The University of Oregon’s RAPID-EC Research Group conducts a weekly survey of households with children ages five and under to gather data on access to child care and early childhood education, financial and work circumstances, and child and adult emotional well-being. The survey launched during the COVID-19 pandemic on April 6, 2020. To learn more about the critical need for child care relief to keep providers in business, including stories directly from people facing these challenges around the country, please visit https://childcarerelief.org and follow https://twitter.com/ChildCareRelief

COVID-19 Child Care News Update – June 11

Extended stay-at-home orders and massive declines in enrollment have forced nearly half of child care providers to close their doors; those still operating or reopening will have to operate on financial losses for months to come as a result of new social distancing requirements and low enrollment, as parents slowly return to work.

The situation varies from state to state, and even from community to community. Here’s a look at recent news coverage and analysis of the nation’s child care crisis.

Yesterday, 41 state and local Chambers of Commerce urged Congress to provide targeted assistance to child care providers in its next legislative package. The letter follows recent efforts by the First Five Years Fund and other national advocacy partners to encourage lawmakers to include dedicated, specific relief for the child care industry to prevent a collapse. The business leaders wrote, “To ensure that more Americans can quickly return to work and to support our nation’s overall economic recovery, Congress should provide timely, targeted, and temporary emergency assistance to licensed childcare centers and homes.” Read the full story here.

Citing recent survey data from the National Association for the Education of Young Children (NAEYC), Marketplace reports on the growing struggle parents are facing as they return to work with no child care available in their communities. With most child care providers saying they are losing income and cannot survive a closure of a month of less without support, Black-owned providers and those serving low-income communities are expected to be the hardest hit, exacerbating gender and racial inequality already seen in the child care industry. Read more here.

A New York Times report highlights the ways parents are being forced to quickly adapt to changing child care availability as thousands of providers are forced to close their doors due to declining enrollment and increasingly slimmer margins. As these facilities close, parents seeking other forms of child care are paying higher costs and those who cannot afford to pay more are at a greater risk of losing their jobs, impacting households and businesses. Read more here.

Understanding the critical role child care plays in our economy, supporting every other industry, former Treasury Department economist Ernie Tedeschi stated the current crisis clearly, “Child care could be the next big headwind to hit the [United States]. Child care is the lynchpin of so much else in the economy.” Read more in the Los Angeles Times here.

The harsh realities of the effects of the coronavirus pandemic on the child care industry are being played out in states across the country as parents plan to return to work.

The Honolulu Civil Beat is reporting that Hawaiian teachers, ready to return to work and serve their communities, are facing the same challenges as other parents who are juggling returning to work and finding high-quality child care. In 150-plus pages of testimony sent to the state education board, teachers from across the state are sounding the alarm about the growing crisis of limited child care and pre-k spaces for their children.

A recent survey of Kentucky’s child care providers found that as many as 15 percent may close permanently due to the COVID-19 crisis, according to WTVQ. Providers are calling for significant state and federal financial support to prevent closures and ensure the child care infrastructure in the state is sustained immediately and in the long term.

Stories from Massachusetts and Louisiana paint a stark picture of the challenges both child care providers and families are going to face as facilities are allowed to reopen. Enrollment caps and necessary safety measures designed to protect the health of young children and child care providers are causing additional financial strain felt by the entire industry. State and national advocates are raising the alarm that without relief, these providers will be forced to close, causing a ripple effect with far-reaching consequences to the entire economy, which is supported by the child care sector.

Chamber Leaders from Across the Country Call for Federal Child Care Relief

In a letter sent to Congress this week, 41 state and local Chambers of Commerce urged lawmakers to provide targeted assistance to child care providers in the next COVID-19 recovery package. Citing the importance of child care as a part of our national economy and the recent reports that thousands of child care providers have been forced to close their doors permanently, the business leaders raised concerns about the effects the closures would have on their communities and families.

The signers of the letter point the economic impact of child care on their state’s economy and the role it plays in plans to reopen their state. Allowing the child care industry to collapse will have long-term costs for businesses and families, and the coronavirus crisis has made the threat of collapse all the more realistic.

“For millions of Americans, returning to work is not just contingent on the lifting of stay-at-home orders and their employer reopening, but on securing care for their children,” the group wrote in the June 10 letter to Congress. “To ensure that more Americans can quickly return to work and to support our nation’s overall economic recovery, Congress should provide timely, targeted, and temporary emergency assistance to childcare centers and homes.”

The letter also references the Paycheck Protection Program loans in the CARES Act. These funds were intended to provide relief to small and very small businesses, but according to a recent survey from the National Association for the Education of Young Children (NAEYC) only one-quarter of child care providers received a loan through this program.

This letter, signed by business leaders in states and communities across the country, comes as national child advocacy organizations have increased pressure on lawmakers to provide significant, dedicated relief to struggling child care providers through a child care stabilization fund, a policy proposal that has received bipartisan support in recent weeks.

Read the full letter from the 41 state and local Chambers of Congress here.

The full list of signers includes:

Alaska Chamber
Arizona Chamber of Commerce and Industry
Arkansas State Chamber of Commerce/AIA
California Chamber of Commerce
Connecticut Business & Industry Association
Delaware State Chamber of Commerce
DC Chamber of Commerce
Florida Chamber of Commerce
Chamber of Commerce of Hawaii
Idaho Association of Commerce & Industry
Illinois Chamber of Commerce
Indiana Chamber of Commerce
Iowa Association of Business and Industry
Kansas Chamber of Commerce & Industry
Kentucky Chamber of Commerce
Louisiana Association of Business and Industry
Maine State Chamber of Commerce
Maryland Chamber of Commerce
Associated Industries of Massachusetts
Minnesota Chamber of Commerce
Mississippi Economic Council
Missouri Chamber of Commerce & Industry
Montana Chamber of Commerce
Nebraska Chamber of Commerce & Industry
Las Vegas Metro Chamber of Commerce
New Jersey Chamber of Commerce
New Mexico Association of Commerce & Industry
The Business Council of New York State
North Carolina Chamber
Ohio Chamber of Commerce
State Chamber of Oklahoma
Oregon Business and Industry
Pennsylvania Chamber of Business and Industry
Puerto Rico Chamber of Commerce
South Carolina Chamber of Commerce
South Dakota Chamber of Commerce and Industry
Vermont Chamber of Commerce
Virginia Chamber of Commerce
Association of Washington Business
West Virginia Chamber of Commerce
Wisconsin Manufacturers & Commerce

Dedicated relief through a Child Care Stabilization Fund will enable states to provide grants to struggling child care providers to help shore up the market and ensure parents have access to the care that will allowthem to return to work.

Dedicated relief through a Child Care Stabilization Fund will enable states to provide grants to struggling child care providers to help shore up the market and ensure parents have access to the care that will allow
them to return to work.