The US Is Facing a Childcare Crisis — Here's What Needs to Be Done to Fix It

There's a childcare crisis unfolding in this country — full stop. A report published by the Joint Legislative Audit & Review Commission (JLARC) in October made headlines for revealing that an estimated 80 percent of families in Virginia cannot afford childcare, which on average ranges between $100 and $440 per child, per week. While this study focuses on a single state, the results are a microcosm for a more significant issue sweeping the nation, one that experts unanimously underscore is not new.

According to Child Care Aware, a nonprofit research and advocacy organization dedicated to making childcare more accessible, the national average price of full-time daycare can account for seven to 18 percent of a married couple's median income, depending on where they live. The Economic Policy Institute, a research think tank, reports that in Virginia, the average cost of infant care is $14,000 annually, with the median family income being $77,000. Most states demonstrate a direct correlation between average state income and cost of childcare, and when accounting for this, Virginia ranks as the 10th-most expensive state in the US.

"Childcare has been unaffordable for Virginia families for decades; it's just that the pandemic highlighted the problem in unprecedented ways, and in ways that employers and policymakers were unable to continue ignoring," says Angela Wirt, the executive director of Child Care Aware of Virginia. "It finally became abundantly clear during this crisis that available, affordable childcare is critical to our economic sustainability."

Why are we talking about this now? On Sept. 30, 2023, a COVID-era federal funding subsidy ran out, leaving 70,000 daycares and upwards of three million children in the US without funding or care. That raised awareness of issues countrywide that had been mounting for decades. In Texas, for example, 27 percent fewer childcare entities exist in 2023 than in 2020; in New York, a daycare operator was forced to close her operation because she was making only $3 per hour for each child she cared for after expenses. In California, childcare has ballooned 220 percent, costing more than tuition at San Diego State University.

It raises the question — where do we go from here? These are the complicated yet necessary solutions that experts say need to happen to remedy the childcare situation.

The federal funding that expired in September was awarded to about 80 percent of all childcare centers and allowed the owners to cover basic expenses like utilities, rent, and payroll. Without the funding, the research think tank Century Foundation has extrapolated, upwards of 200,000 childcare-sector jobs will disappear, and the loss in tax and business revenue will topple states' budgets, stealing $10 billion of economic activity per year.

"While childcare is deeply personal to each family, we must recognize the pivotal role it plays in driving the overall economy, making it a very public issue that deserves systemic and scalable solutions from the federal government," says Bryan Jamele, head of government affairs and public policy at Care.com.

Several Democratic congresspeople have introduced a bill called The Child Care Stabilization Act to help rectify the funding shortages that will occur given the subsidy expiration. However, nothing has been passed (though it's worth noting that Congress was at a standstill while the House of Representatives was without a speaker).

At the state level, Wirt maintains that more work is also needed, and she pushes us to understand that accessible childcare is not a problem that will be solved with a single piece of legislation. "State investment in childcare is most needed, and it's not one policy or one bill — it's a concerted, continued investment in supporting early childhood education programs, childcare subsidies, provider incentives, and myriad workforce supports," she says.

Remember that childcare worker mentioned above who only took home $3 per child per hour? Keeping childcare costs low so that parents can work and support the economy while also ensuring that daycares have enough funds to support staff and other operating expenses creates a complex dynamic with an inherent push-pull of priorities.

While the specific subsidy policies vary by state, programs typically support low-income families or families in which the primary parent is in school. Usually, children qualify to go to daycare centers that are also state or federally funded; however, even still, there can be long waiting lists in some areas, and subsidies don't always cover the total cost of childcare.

In Virginia, the Department of Education increased the funds that went to subsidy-backed childcare programs last year. They've continually assessed and raised the amounts paid to these facilities to make sure that childcare providers are taken care of, and families receiving subsidies can find the care that they need.

"These approaches seem to be working," Wirt says. "These program improvements for parents and providers have increased subsidy participation back to or above pre-pandemic levels. We need to keep moving in this forward trajectory; the state cannot afford to backtrack."

At present, the data overwhelmingly suggests that remote work has helped women — who tend to bear the brunt of childcare responsibilities — to make up ground in the workforce. In September, just as the federal childcare subsidies were set to expire, research was released that showed the gender gap was reaching an all-time low. Notably, women with children under age 5 made historic gains in the labor market, with over 70 percent holding down roles.

However, despite this data and other intel that suggests WFH workers are more productive and have lower attrition rates, many companies are pushing for their employees to get back into the office. Salesforce, Disney, Twitter, and more want butts in chairs, and when headlines about these behemoths are splashed on front pages, other CEOs and small-business owners might begin to follow suit. One of the best ways to continue the momentum we've seen with women gaining ground is to keep work flexible.

While there are many public-sector steps to be taken, companies can also strengthen their childcare benefits. "Parents should tap into whatever benefits are offered through their employer, starting with a pretax Dependent Care Flexible Spending Account, as well as any other childcare subsidies and backup care options that might be available," says Jamele, who cites research from Care.com that indicates that almost half of employers are prioritizing childcare benefits.

The task of fixing the broken childcare system will take policy changes and private-sector shifts, and in the interim, we must make immediate changes. "Reach out to your legislators and emphasize how important this all is by sharing your challenges and the urgency of this matter," Jamele says. "As we approach the upcoming election year, now is the time to create a sea change for childcare policies in America."