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Opinion: Our economy is about to meet the childcare cliff — and it will be devastating (


Lisa M. Hamilton


(Lisa M. Hamilton is the president and chief executive officer of the Annie E. Casey Foundation.)

Millions of working parents will face a child care emergency after pandemic-era federal funding ends Sept. 30, just two days from now.

Whether you are one of the affected parents or not, you will feel the impact on our nation’s workforce and economy.

According to estimates, up to 70,000 daycare facilities could close, causing three million child care slots to vanish. This is a loss of educational opportunity for children, but also a devastating loss of support for millions of working parents who may have to leave their jobs.

All of us will surely feel the resulting blow to our economy if a projected $9 billion-plus in earnings is lost.

Related: What American can learn from Canada’s new $10 a day childcare

Sadly, this is just the latest failure in a child care system that has been broken for decades.

As The Casey Foundation recently highlighted in our 2023 KIDS COUNT® Data Book, shortcomings of the child care system already cost the country $122 billion a year in lost wages, tax revenue and productivity.

We cannot allow these cascading consequences to continue.

Every other country with an economy comparable to ours has created a sustainable system that better meets the needs of families, employers and child care workers.

It’s time for policymakers to explore immediate solutions. We know they exist: Every other country with an economy comparable to ours has created a sustainable system that better meets the needs of families, employers and child care workers.

Moreover, we already have evidence in our own economy of what can work. For example, home-based providers are more likely to operate during non-traditional hours, when shift workers, single parents and student parents need them. One thing we can do right away is to increase access to affordable startup and expansion capital for new and existing home-based centers.

A robust, reliable care system requires investment. Average public spending on child care among the comparatively wealthy Organization for Economic Cooperation and Development (OECD) nations is $16,000 a year per child.

The United States invests a mere $500 per child. How can we invest so little in our future workforce? In the leaders of tomorrow?

Related: A wave of childcare closures is coming as funding dries up

Families are working hard to meet their needs but costs continue to rise, putting quality care beyond their reach. Child care costs in the U.S. averaged $10,600 a year in 2021, according to an analysis by the advocacy organization Child Care Aware. That’s 10 percent of a couple’s average income — or 35 percent of a single parent’s income.

In at least 34 states, care for the youngest children is more expensive than in-state college tuition.

What support does exist for families is difficult to get and insufficient. As a result, only one out of every six U.S. children eligible for public subsidies receives them.

Women, single parents, parents in poverty, families of color and immigrant families carry the heaviest burden of this crisis: An analysis of 2017 data indicated center-based care for two children absorbed 26 percent of a white working mother’s median household income. For Latino, American Indian or Alaska Native, and Black working mothers, those figures were 42 percent, 51 percent and 56 percent, respectively.

These figures demonstrate how the cost of care can make it almost impossible for a household to meet other basic needs like housing, food and transportation — which all continue to escalate in cost.

In spite of this, providers themselves, almost all women and disproportionately women of color, are barely staying afloat, operating on one percent margins.

No wonder so many are expected to close their doors starting next month.

In August, more than 1,500 state lawmakers from across the country gathered in Indianapolis for the annual National Conference of State Legislatures summit.

We heard Republicans and Democrats agree that something must be done to address the child care crisis.

They know the fallout will keep us from moving forward, from filling jobs and from ensuring that children are safe and thriving while their parents are working or completing their own education.

It’s time to channel that consensus into urgent action and real solutions.  

This is a time for creativity and thinking big among both the private and public sector. The Casey Foundation urges lawmakers to invest in the child care sector, starting with these steps:

  • Congress should reauthorize and strengthen the Child Care and Development Block Grant Act. The main reason we didn’t lose 75,000 child care centers and 3 million slots during the pandemic was the $40 billion allocated to strengthen the child care sector in the American Rescue Plan Act. We now have evidence that these investments work.
  • Public and private leaders should work together specifically to improve infrastructure for home-based child care providers. Start by increasing access to affordable startup and expansion capital.
  • Governors and legislators should encourage the higher education and business communities to take steps such as co-locating child care at work and learning sites to reduce transportation challenges.

The underpinnings of our families and our economy are too important for our elected officials to continue to ignore what is happening. The pandemic sharpened our understanding of the issues. There are good models to follow.

Now is the moment for generational action to ensure children, parents and guardians, providers and employers are never again standing at the edge of a cliff, looking for a bridge to safety, and wondering whose kids will make it to the other side and whose will be left behind.

Lisa M. Hamilton is president and CEO of the Annie E. Casey Foundation.

This story about the child care funding cliff was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Sign up for the Hechinger newsletter.


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  • IMG_7991: Lisa M. Hamilton, President and CEO, Annie E. Casey Foundation

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