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Positive Economic Data Is Still Hiding Bleak Reality for Families

6 minute read

Goldstein is Care Reporting Fellow for the Better Life Lab at New America. Her report, A Playbook to Transform How America Cares, is out October 24. She’s also a speaker and journalist who writes on mothers, caregivers, and gender equity and the creator of The Double Shift newsletter, podcast, and community.

Jennifer Trippett’s child care center in Bridgeport, West Virginia has 20% of its classrooms sitting empty. This isn’t for a lack of demand, Trippett told the 19th News. Parents are desperate for child care, but Trippett can’t find enough qualified providers for what she can afford to pay. The result is over 400 children are on the waitlist. I seriously doubt that the median national wage increase of 2.2% in 2023 is addressing the biggest economic stressors of those 400 families.

While many economists are celebrating that the country appears to no longer be headed for a recession, many are forgetting to explore a crumbling pillar for families: childcare. As the mother of three young children, I’ve faced many childcare crises over the last four years, and my ability to access reliable childcare impacts nearly every aspect of my personal and professional life. Right now, families with young children are being forced to shoulder the burden of a sector-wide collapse of the childcare industry. For decades, childcare had been expensive and hard to get, but the pandemic wreaked havoc on an industry that was already barely getting by. Before the pandemic, 98% of other occupations paid more than childcare workers earn, and as hiring boomed in retail and other sectors, 100,000 workers left the industry between 2020 and 2022. Between December 2019 and March 2021, 16,000 childcare centers and home-based providers closed their doors for good. Federal government money was the lifeline that kept some programs open at all, first in the form of Paycheck Protection Program (PPP) loans, followed by an infusion of cash through the American Rescue Plan Act (ARPA) that raised worker pay and helped struggling centers keep their doors open. In Fall 2023, Congress refused to extend those $24 billion ARPA child care stabilization grants. As this money phases out and individual states are left to fill in its gaps (or in many states, not,) we’re hearing more and more stories from across the country like those of child care center owner Trippett. More woes are likely coming in the form of higher costs for families, cut operating hours, and more worker shortages. As a result of this “cliff,” the Century Foundation predicts the failure to extend the ARPA money could result in 3 million children losing their spots and 70,000 centers across the country closing.

While increased funding of $725 million for Child Care Development Block Grants, and $275 million increase for Head Start fund compared to fiscal year 2023, is a welcome, and rare, bi-partisan funding effort in Biden’s 2024 budget, it’s more of a nod of acknowledgment about the depth of the problem, rather than anywhere close to a meaningful solution.

As as the childcare sector needlessly crumbles, too many leaders with power and influence seem far removed from today’s reality of what families are going through, daily, to make work happen when childcare is this expensive and inaccessible.

So for those who still aren’t quite getting this pain, here’s an analogy. Imagine if much of the country didn't have reliable internet. There were years long waiting lists to get it, and its cost was so high you aren't sure how you'd afford it even if you got off the waitlist. You could hot spot sometimes, for a few hours at a time, but it's compromised and not reliable. Maybe you could work from your car for an hour outside the library, but sometimes the lot is too full when you get there. Sometimes you could go to a friend or family member's house and use theirs, but because the broadband is so precious you don't want to risk damaging the relationship by asking too often. What if every single day you had to cobble together how to find internet from all of these sources just to do your job and provide for your family? This is what it’s like to be a working parent in need of childcare in America.

While the federal government can’t solve all of our problems, it’s maddening because it can solve this one: President Biden has proposed a new program for his 2025 budget where most families would be able to access high-quality childcare for $10 a day or less, but it stands little chance of making headway in the face of Republican opposition.  

This ARPA childcare funding cliff is the perfect storm of timing for parents to feel serious economic doom. Parent Kalisha Sherman told Boise Dev, “We’re paying $400 a week right now just for daycare.” Her child care center in Idaho had to raise prices after it lost its ARPA funding. “It’s more difficult just because like funding for everything is ending all at the same time. So we’ve got the daycare and then we’ve got student loans starting, plus inflation and interest rates are really high. So I think that’s the hardest part about it for us with finances is just all that’s kind of coming down at the same time.”

The childcare crisis isn’t just for families with young children in private programs; after-school care and camps for the four months a year that most kids are not in a K-12 educational setting are also becoming more expensive and fiercely competitive to even get into. Part of why I think so many parents feel anywhere from glum to downright desperate about their childcare situation and how that impacts their economic outlook is that we don’t believe things will get better. So many of the overwhelming hardships families faced during the pandemic like virtual school felt endless, but we knew on some level it was temporary. During the first two years of the pandemic, there were federal programs that materially made families’ lives better, like some limited paid family and sick leave and the Child Tax Credit that lifted over 3 million children out of poverty.

While my family is financially better off than many, the $950 directly deposited into our bank account for my kids or a blissful six months majorly helped cover unexpected childcare costs we had from my kindergartener’s public school being virtual. Do you know what else it did? It improved my outlook on our family finances. Seeing that money show up during a time of personal instability of caring for three little kids, including baby twins, as the pandemic dragged on, while also dealing with ongoing professional turbulence in the unstable industry of journalism felt like a reassuring pat on the back that said, maybe, everything was going to be OK. But since all of these programs were allowed to expire by a Republican Congress and meaningful federal investment in our care infrastructure that was proposed in Biden’s Build Back Better package failed to pass in 2021, we are now faced with what feels like a grim status quo. 2024 economic realities for families are no great mystery novel, they are in fact, a short, predictable, sad story that doesn’t have to end this way.

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