16,000 Shuttered Child Care Programs Push the Sector Closer to Collapse

Early Learning

16,000 Shuttered Child Care Programs Push the Sector Closer to Collapse

By Emily Tate Sullivan     Feb 11, 2022

16,000 Shuttered Child Care Programs Push the Sector Closer to Collapse

Nearly 16,000 child care programs across 37 U.S. states have permanently closed since the pandemic began, representing a 9 percent decline in the total number of licensed child care providers, according to a new report published this month by Child Care Aware of America.

Though perhaps less severe than some of the worst-case scenarios laid out in early 2020, the loss of thousands of providers reflects an ever-worsening crisis in the field of early care and education, accelerated by—but not originating with—the arrival of COVID-19.

These closures are sure to have major effects on everyone touched by the child care industry, says Mario Cardona, Chief of Policy and Practice at Child Care Aware of America, a national membership association that works to improve child care and the early childhood profession and that conducted the survey which was the basis for the new report.

The decline in child care providers—8,900 of which provided center-based care and 7,000 of which were family child care programs—represents many more thousands of jobs lost along the way. Some of those early childhood educators sought and found other positions in the field, Cardona notes, but others may have decided to look elsewhere, determining that the challenges and stressors in the field had become hard to justify.

“The labor is intense. The work is intense. Health issues continue,” Cardona says, rattling off reasons an early childhood educator might leave for a job in, say, retail or the service industry, where worker compensation has increased during the pandemic. He also notes that the health and risk calculations for early childhood educators and providers remain quite different from that of the rest of the public. Kids from birth to age 4 are still not eligible to receive a COVID-19 vaccine, and mask-wearing only commonly begins after age 2.

Abbie Lieberman, a senior policy analyst on the early and elementary education policy team at New America, a Washington, D.C.-based think tank, pointed out the way closures are affecting children and families as well.

“Families all over the country are experiencing the realities of these closures,” Lieberman said by email. “Child care programs that they may have relied on for years, that they know and trust, have gone out of business and they are scrambling to find a new program that meets their needs.” The situation is more severe and disruptive in communities where child care spots were already limited; more than half of the U.S. population is estimated to live in child care deserts.

“For young children, continuity in care is important,” Lieberman added. “Disruptions in care can make for difficult transitions as children adjust to new providers and situations.”

More than just constraints on availability, the cost of child care has also increased materially, outpacing the rate of inflation on consumer goods. In 2020, the national average price of child care was $10,174 for the year, a 5 percent increase from 2019.

National average child care prices compared to annual inflation rates
Source: Child Care Aware of America

The rising costs of child care can, in part, be attributed to the pandemic, Cardona explained. It was neither free nor cheap for child care providers to put in place mitigation measures over the last two years. The cleaning supplies, protective gear and other safety efforts came at a price. And sometimes, programs would have to beef up their staff or lower their enrollment to get within more palatable teacher-to-child ratios during the worst outbreaks. Other times, lower enrollment was a natural byproduct of the pandemic, and providers, already operating on tight margins, were forced to offset the losses and additional costs somehow.

Though the average cost of child care has risen significantly, it was unaffordable for many families well before the pandemic. The report’s findings track a trend from crippingly high costs a couple of years ago to cripplingly higher costs today.

Child Care Aware examined the burden of child care costs regionally across the U.S. as well as state-by-state. In California, a married couple with an infant could expect to pay nearly 17 percent of their household income on center-based child care. In Rhode Island, it would cost nearly 12 percent of a married couple’s household income to place their infant in family child care.

Out of four U.S. regions—the Midwest, Northeast, South and West—the report revealed that the average cost of center-based child care for an infant exceeds the average cost of housing in three of them. The only exception is in the West, where housing costs—average monthly rent or mortgage payments—slightly surpass child care costs. In all four regions, annual child care costs exceed the cost of one year of in-state tuition at a public four-year college.

Household expenses by region
Source: Child Care Aware of America

What this means is that middle-class families are left to work out a nearly impossible financial situation on their own, Cardona says.

“Families are paying so much for care that it impacts family planning; it impacts whether and when they can purchase a home,” he explains. “If you remove that barrier for families, it provides so many options that they don’t currently have.”

The report highlights a number of woeful realities in the child care sector, but none of them are new. The pandemic has worsened the situation considerably and pushed these issues into the public discourse.

“Families cannot afford to pay any more, and child care providers cannot afford to charge any less,” Lieberman writes. “Providers are already struggling to stay afloat, and the workforce is underpaid. Providing a safe, quality environment costs money. The most viable way to lower the burden on parents and ensure that providers stay in business is to invest public funds in child care.”

Both Lieberman and Cardona expressed hope that early childhood provisions of the federal Build Back Better bill, which includes efforts to reduce the cost of child care on families and to improve the early childhood profession, may yet become a reality.

The bill, which has stalled in Congress, would limit child care costs to 7 percent of income for middle-class families (compared to the 10 to 20 percent many families currently pay) and guarantee access to free, universal pre-K for all 3- and 4-year-olds in the U.S., among other forms of assistance for the field.

“It would make a radical difference,” Cardona says emphatically. “It would change the way we support young families. It would address issues related to supply, compensation for educators, affordability for families. … and it would represent a shift in the way this country values early care and education.”

State and local efforts do exist, and they can make a difference. New York is currently considering universal child care at the state level. In Washington, D.C., local officials have signed off on a plan to give one-time payments between $10,000 and $14,000 to child care workers as part of a larger effort to boost their pay.

Still, short of a federal solution, experts say, providers will likely continue to close their programs. Families will continue to be saddled by the inordinate costs of paying for care. Child care workers will continue to need public assistance to get by, if they don’t exit the field altogether.

“Our country should have addressed this market failure a long time ago,” Lieberman said.

Her colleague Laura Bornfreund, director of New America's early and elementary education policy team, put it more bluntly.

“There has never been a U.S. child care system,” she said by email. “There have been funding streams to help some families meet their child care needs. But even what was previously in place was inadequate. And, now both because of our country’s past failure to put a real system that works for all families in place, years of disinvestment in what was in place, and the current state of child care because of the pandemic, there is a crisis. It is on the brink of collapse.”

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