The child-care sector has been surviving on $39 billion in emergency pandemic funding, but at the end of the month, it is coming to an end.
Without renewed funding, The Century Foundation estimated 70,000 childcare programs could shut down, leaving about 3.2 million children in need of child care.
“Beginning September 30, 2023, states will face a steep dropoff in federal child care investment. Without Congressional action, this cliff will have dire consequences. More than three million children are projected to lose access to child care nationwide. Seventy thousand child care programs are likely to close. This will have ripple effects for parents forced out of work or to cut their work hours, for businesses who will lose valuable employees or experience the impact of their employees’ child care disruptions, and state economies that will lose tax revenue and jobs in the child care sector as a result.”
Programs have said they may need to reduce staff wages, increase tuition, serve fewer children, or shut down altogether. That’s why lawmakers are now pushing the Childcare Stabilization Act, which would provide $16 billion a year in funding for child care for the next five years.
In 2022, the Federal Reserve Bank said Kentuck families spent roughly $6,611 per child per year. The Kentucky Center for Economic Policy said even parents who can afford child care have trouble finding available spots.
“This has only gotten worse over the past 10 years as Kentucky has lost 1,759 child care providers — a 46% drop. Now, there are 159,000 child care spots for Kentucky’s 316,000 kids ages 0-5,” the Kentucky Center for Economic Policy wrote.
Even while child care is too expensive for many Kentucky families, child care workers are severely underpaid, earning an average of $25,770 a year. This apparent contradiction is because centers are rightfully required to maintain low teacher-to-student ratios and maximum class sizes for safety reasons. But it means that centers are constantly in a tug-of-war between the need to provide adequate compensation for the workforce while not pushing families out with higher tuition. It’s a classic market failure.
This fragile, but essential industry would have collapsed during the pandemic were it not for hundreds of millions of federal dollars that kept doors open at centers across Kentucky. These funds have helped increase subsidies for families with low incomes, kept tuition down, allowed centers to make building improvements, and resulted in necessary raises for child care workers in a highly competitive job market.
Dustin Pugel, Kentucky Center for Economic Policy
The Century Foundation said more than 40,00 children and 544 child care programs in Kentucky are expected to lose child care without additional funding
“Our findings underscore the urgent need for immediate funding and long-term comprehensive solutions at the federal level that offer safe, nurturing, and affordable child care options to every family,” the foundation said.