As the child care industry tries to adjust to a fiscal cliff caused by the end of federal COVID-19 emergency funds, early childhood experts expressed some optimism as well as predictions for growing challenges during a Tuesday webinar hosted by The Hunt Institute, a nonprofit organization that aims to improve education policy.
Angela Garcia, CEO and owner of the Toy Box Early Learning and Child Care Center in Las Cruces, New Mexico, said families and child care providers in the state have been buoyed by voters' 2022 approval of a permanent fund for early childhood education, including child care. At the same time, voters also approved a measure to make universal pre-K a constitutional right in that state — the first state to do so.
While the state's child care system is currently "experiencing some difficulty," its financial status isn't as dire as in some states, Garcia said.
"I honestly think that we find ourselves in this position because of advocacy, education and partnership," said Garcia. And while New Mexico's funding approach may not be possible in other states, "it does show that there are solutions that could be had — out of the box solutions."
New Mexico's early childhood funding approach is not reliant on taxes but instead will be drawn from the state’s Permanent School Fund, which collects revenue from oil, gas and mineral production. Stock investment on that money will earn additional income, according to New Mexico Voices for Children, one of the advocacy groups that worked for the measure’s passage.
Elsewhere, many child care providers and families have significant funding concerns. Last fall, The Century Foundation predicted about 3.2 million children would lose access to child care and about 70,000 child care programs would close once $23.97 billion in American Rescue Plan funds for child care stabilization grants to states, territories and tribes expired on Sept. 30, 2023.
Without that funding, nearly 1 in 4 child care programs would likely close, according to a survey released last year by the RAPID Project at Stanford University’s Center on Early Childhood Education.
"It's not profitable or cheap to look after children."
Kathryn Anne Edwards
Labor economist with Bloomberg
The child care industry is a "market failure," said Kathryn Anne Edwards, a labor economist and independent policy consultant with Bloomberg. There is insufficient supply to meet the demand, and the price of child care is out of reach for many families, Edwards said.
"It has nothing really to do with the motivations, the qualifications, the intent of private child care providers, it's that you just can't get the math to work. It's not profitable or cheap to look after children," Edwards said.
Additionally, Edwards said there are no solutions for radical improvements to the child care industry, such as technological advancements that could allow for efficiencies or scale that would lower the price.
"None of that is coming for child care," Edwards said. "Little tiny people need the eyes, the hands, the attention of a capable and careful adult, and there's no making that cheaper."
Edwards added that the cost of child care over the past three years has increased more than other services and expenses like housing, food, energy, medical care and prescription drugs.
Michelle Kang, CEO of the National Association for the Education of Young Children, said that while the low supply and high demand for child care industry predated the pandemic, families are reporting higher child care fees and providers are having to cut back on wages and salary increases or serve fewer children.
Still, child care champions in Congress and state legislatures are advocating for more investments, Kang said. Additionally, she said, "We are seeing shifts in how child care is discussed and prioritized, and I see that as a testament to the incredible work of advocates, educators, parents and allies who have been relentless."
Kang added: "It's honestly not in my nature to abandon hope.”
