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In the Nation's Interest

Quality Child Care Matters: Time for An Alternative Financing Strategy

Several reports that have been recently released re-affirm what has long been known about child care throughout the United States.  First, quality child care matters to the healthy development and school readiness of children. Second, the price of child care is hard for many families to afford (not just a hardship for low income families). And, third, child care workers earn very low wages – which affects the ability to hire and retain quality staff, the turnover of staff, and the interaction between staff and the children they serve, all serving to undermine the quality of child care programs.

Last week, Child Care Aware of America released a report, “Parents and the High Cost of Child Care,” a 2014 update to annual reports that have been released over the last decade. The report found that in 2013 the annual cost of infant center-based care ranged from $16,549 in Massachusetts to $5,496 in Mississippi. In fact, the annual cost of center-based infant care exceeds the cost of college tuition and related fees in 31 states (which includes the District of Columbia). Clearly, many families, particularly those with more than one young child, struggle with the cost of child care.

Last month, the Center for the Study of Child Care Employment released a new report, “Worthy Work, Still Unlivable Wages,” reviewing the wages and resulting economic insecurity of the child care workforce. The report compares workforce data between 1997 and 2013. During that time, average hourly wages of child care workers increased from $7.03 to $10.33. The report shows a wide disparity in wages compared to similarly educated professionals with child care worker wages barely above the poverty level. According to the report, despite child care worker educational attainment, their wages are lower than individuals engaged in other early learning settings such as Head Start and State Pre-Kindergarten programs. This means that even as child care worker qualifications (training and education) have increased over the years, there has not been a corresponding increase in wages– particularly for those workers involved in child care. As a result, programs have difficulty retaining classroom staff and high turnover continues to plague the industry.

The current child care system relies on parent fees. Yet, as the Child Care Aware of America report shows, parents throughout the country with young children struggle to afford the cost of care. From the neuroscience, we know that 80 percent of brain development occurs in the first three years of live. We know from research related to practice in the field that high quality child care makes a difference in the school readiness of all children, particularly those from low income families.  The quality of the child care workforce is directly related to the quality of child care settings.  To attract and retain a quality workforce, wages in the child care field need to be comparable to other early learning settings – including state pre-kindergarten programs.

“What is clear is that the price of child care is unaffordable for most families, particularly for those families with more than one child. Together with recent research about very low wages throughout the child care workforce, it’s time to think about alternative financing methods to underwrite and strengthen quality child care options for parents,” said Michael Petro, Executive Vice President of the Committee for Economic Development.  “Quality child care makes a difference in the school readiness of children. But, parents just can’t pay more.  It’s time to engage the business community and policymakers at the state and federal level in meaningful discussions about investing in child care – our future workforce depends on it.”

A 2012 CED report, “UNFINISHED BUSINESS: Continued Investment in Child Care and Early Education is Critical to Business and America’s Future,” recognized that investing in early learning is the best foundation for human capital.  The report calls for a new national strategy to ensure that all children have access to high-quality child care and early education, and that families are supported and engaged in their children’s learning from birth through third grade. 

It is time for business leaders, policymakers at the federal and state level, and others interested in early childhood and education issues to gather together and to exchange ideas.  The current financing system for child care doesn’t work.  Parents can’t afford it. Child care worker wages undermine the quality of programs. It is time to explore alternative financing mechanisms and propose more effective ways to invest in early learning: the foundation for a skilled workforce.  Families and employers depend on it.