Child care centers, both home, and center-based, are a critical part of the economy. They help millions of parents continue working by providing quality care for their children.
However, the COVID-19 pandemic forced thousands of centers to close permanently. While California’s economy is beginning to reopen as vaccines and resources roll out, underpaid workers, child care shortages, and struggling parents are still on the rise.
Status Quo
How has the COVID-19 pandemic impacted California’s child-care industry? Let’s crunch the numbers:
Between January 2020 and 2021, 14% of home-based child care providers closed statewide. That’s a loss of 3,365 sites. On the other hand, 33% of center-based facilities shut down– 4,875 sites lost. The shortage of child care centers has forced parents, especially mothers, to compromise their jobs to take care of their children. Low-income families are disproportionately affected since they already live in areas where local child care centers are scarce.
Employees in open child care facilities are not faring any better. With COVID-19 regulations that are causing a 47% spike in child care operation costs, many employers at child care centers can’t afford a decent wage for their workers. In fact, the current median wage for child care employees is $13.43. That’s just 43 cents more than the $13 legal minimum wage in California. As a result, 17% of California child care workers live in poverty.
Next Steps
With the child care industry in disarray, what steps is the government taking to help?
President Biden’s “American Rescue Plan” enacted in March 2021 consists of a $1.9 trillion economic stimulus package, including the Child Care Development Block Grant. The $15 billion grant will help low-income families pay for child care and assist mothers who are getting back into the workforce.
Additionally, Biden has also announced the “American Families Plan.” Its objective is to strengthen the US economy and families’ well-being by providing tax cuts to parents, high-quality and affordable childcare, universal preschool for three to four year olds, and four years of free education. Although the plan has a price tag of $1.8 trillion, empirical research has shown that providing support to disadvantaged families and children will generate economic growth that covers the price many times over. For example, a paper by the National Bureau of Economic Research finds that one dollar invested in high-quality childcare for low-income children will generate a $7.30 output.
Conclusion
Although wealth inequality and poverty have increased due to the shortage of California child care centers during the pandemic, national government reforms spark hope of recovery. As our economy continues to recover from COVID-19, it is imperative that our nation’s working parents have the resources to ensure high-quality and affordable care for their children.
(For information on how each California counties’ child care centers were impacted by the pandemic, see the COVID-19 child care supply graphs at California Child Care Resource and Referral Network.)
