Our nation’s economic recovery depends on the employment and re-employment of those who have left the workforce. For parents with young children, that means having access to child care. But around the country, the supply of child care — spaces in programs — falls far short of being able to meet the demand.
In 2020, almost 400 licensed child care providers who served more than 5,000 children closed their doors in the state. Prior to COVID-19, the Bipartisan Policy Center mapped both the need for care and the existing supply in 35 states and found the gap is enormous. On average, nearly a third of our children who potentially need care lack access to it in their community, leaving families scrambling for options.
The lack of safe, high-quality care has serious implications for the economy. BPC estimates the country’s lack of access to formal child care for 3.4 million children in 35 states, including D.C., costs the U.S between $84 to $128 billion in economic productivity per year, impacting parents, businesses and taxpayers.
Beyond the gap, the quality of many of our existing child care facilities is grim. Children and early educators deserve high-quality physical environments in which to learn, grow, and teach. Yet in too many child care programs, the program’s facilities do not meet health and safety best practices. The U.S. Department of Health and Human Services Office of Inspector General found that 96 percent of child care providers inspected in nine states and one territory had one or more instances of potentially hazardous conditions.
We have spent decades of our careers talking about the need to invest in child care facilities and the workforce to better serve parents and families. Though based in Minneapolis, First Children’s Finance works in more than 20 states to expand the supply of child care by supporting child care providers to plan for facility investments and improvements and ensure that they can be made in a sustainable manner. But major structural challenges exist that make these efforts challenging.
With razor thin profit margins, many child care programs cannot afford to make the important repairs and renovations needed to provide safe and engaging settings. Providers lack the capital needed for major construction and would not be able to undergo renovations without passing costs on to parents. And, as we all know, parents are already pushed to the brink and many are already struggling with the high cost of child care. Without a dedicated federal investment in child care facilities, the current gap will only continue to widen.
President Biden proposed $25 billion in dedicated funding to specifically address the supply and quality of child care across the country. If enacted, this funding could fix the deplorable state of many existing facilities and add at least 650,000 additional slots.
As Congress develops legislation to enact President Biden’s “human infrastructure” and economic agendas through the pending reconciliation bill, it must include dedicated funding for child care facilities alongside investments to help parents access and afford care. Notably, the House Ways and Means Committee’s Build Back Better Act includes $15 billion in dedicated funds for the expansion of child care facilities and addresses the complicated nature of construction and major renovation.
Dedicated funds for construction and renovation will go a long way toward fixing the current stock and expanding the supply. The pending reconciliation bill is an opportunity to help solve the supply gap and support parents where the private market has fallen short. It’s also an opportunity to support the healthy development of children and support employers in their ability to retain and recruit parents as part of their workforce.
The House Ways and Means Committee proposal is structured in a way that best supports children, parents, employers, and communities. Any final reconciliation bill should include it. Our nation’s economic recovery depends on it.
Linda Smith is director of the Early Childhood Initiative at Bipartisan Policy Center. Jerry Cutts is president and CEO of First Children’s Finance.