With the closure of her twins’ day care fast approaching, Lexie Monigal finds herself in a familiar dilemma. She’s desperately searching for child care options while contemplating the possibility of quitting her full-time job as a surgical nurse in Menasha, Wis. This isn’t the first time her twins’ day care has unexpectedly announced plans to close due to financial difficulties, leaving her without reliable care for her two-year-olds. Unfortunately, this situation only exacerbates the already existing child care shortage in Wisconsin.
Monigal, who is currently eight months pregnant with her third child, has exhaustively searched for alternatives but has yet to find a suitable solution. She’s now at the point where she’d rather quit her job and face financial struggles than continue the constant worry of finding child care.
Millions of parents, especially mothers, may soon find themselves making similar decisions as states deplete the $24 billion in stimulus money that Congress had allocated for child care during the pandemic. This significant investment has helped sustain the industry by supporting workers’ salaries, enhancing training programs, and waiving family payment requirements. However, with the expiration of this funding, an estimated 70,000 child care programs could face closure, leaving 3.2 million children without care. According to a study by the Century Foundation, this could result in a loss of $10.6 billion in economic activity in the United States, further straining a nation that already grapples with a severe child care shortage.
The depletion of federal funding coincides with a precarious time for the U.S. economy, which is already experiencing a slowdown after a period of rapid post-pandemic growth. Job openings are decreasing, home sales are declining, and more Americans are struggling to make payments on car loans and credit cards. While overall price growth is stabilizing, child care costs have been rising faster than inflation for the past five months. Experts predict that day care fees, already among the highest in the world, will continue to increase in the coming months as the supply dwindles.
Both Democrats and Republicans have acknowledged the need for more affordable and accessible child care, but significant obstacles remain. Democrats are advocating for $16 billion in emergency child care funding this year, although such efforts are unlikely to gain traction when Republicans are focused on reducing safety-net programs. Moreover, widespread disagreements over budget policies are pushing the government toward a potential shutdown.
Even with the recent influx of federal funding, the child care industry has struggled since the pandemic forced widespread and sudden closures across the country. The Century Foundation reports that around 20,000 child care centers — or 1 in 10 nationwide — permanently closed in the first two years of the pandemic. This resulted in hundreds of thousands of workers losing their jobs, and many others leaving for less demanding, higher-paying positions. Presently, the industry is still short 40,000 positions compared to early 2020 levels. Experts estimate that an additional 232,000 jobs could be at risk as government funding expires, coinciding with a cooling labor market. In August, the unemployment rate reached an 18-month high at 3.8 percent.
“This additional money was helping us stay afloat,” says Cynthia Davis, 53, who holds a master’s in early-childhood education and operates a 24-hour child care center in Northwest Washington, D.C. “But now we’re back to where we were before. I can’t even afford to pay myself a minimum wage.”
The closure of a single child care facility can have far-reaching consequences, especially in areas with limited child care options. The Center for American Progress reports that over half of Americans, particularly those from low-income families, people of color, and rural areas, reside in “child care deserts.” The United States currently faces a shortage of approximately 3.6 million child care slots, according to Child Care Aware, a nonprofit advocacy group.
“The pandemic exposed and worsened an already precarious child care situation,” states Melissa Boteach, vice president of income security and child care at the National Women’s Law Center. “The American Rescue Plan provided a lifeline, but once this funding runs out, the country’s child care deserts will only become more barren.”
Ashton Nelson, a mother of four in Calvert County, Md., is grappling with the repercussions of her children’s day care closing last week. While she quickly found a preschool for her 4-year-old daughter, her 20-month-old son has been at home all week. Nelson has been relying on help from grandparents, siblings, and friends to navigate this difficult situation so she and her fiancé can continue working. Unfortunately, day care waiting lists are years long, particularly due to recent closures in her area. Hiring a nanny is financially unfeasible, and neither Nelson, a secretary, nor her fiancé, who works in maintenance for local school systems, can telecommute.
“It’s an incredibly frustrating situation,” says Nelson, 32. “Will I eventually need to quit my job? It’s definitely something I’ve considered, but it’s not a decision I can make lightly when I’m responsible for our family’s health insurance. But if things don’t improve, what other choice do I have? I can’t call out of work every day.”
Economists warn that the impending funding rollbacks will disproportionately affect mothers, who have returned to work at record rates since the pandemic. The labor force participation rate for women in their prime working years, currently standing at over 77 percent, is near an all-time high and has significantly contributed to the recent strength of the economy. However, child care disruptions could undermine this progress and exacerbate worker shortages in industries such as nursing, teaching, and hospitality, which have struggled to replenish their workforce since the start of the pandemic.
“If you have young children, you can’t work without child care,” explains Boteach. “This means that more women are likely to be forced out of the labor force, and businesses will face even greater difficulties in finding suitable candidates to hire.”
Indiana resident Kelly Dawn Jones is on the verge of closing her in-home child care center of 14 years, despite her concerns about leaving families in an impossible situation. Jones currently cares for five children, all of whom receive government assistance, while their parents work in various roles such as pharmacy techs, delivery drivers, and kitchen staff at local hospitals.
“I have parents telling me, ‘Thank goodness you’re still open because otherwise, I wouldn’t be able to work,'” says Jones, 49. “But I don’t know how much longer I can hold on.” Financial constraints forced her to lay off two long-time teachers last month, leaving Jones to single-handedly manage her center. While she receives state reimbursements ranging from $157 to $203 per child each week, these payments often come late. She’s had to dip into her personal savings and borrow from friends to cover basic expenses and groceries.
“Closing is all I can think about these days,” she confesses.
Home child care centers like Jones’s, which primarily serve low-income and rural children, face the highest risk of closure. Department of Health and Human Services figures show that over 97,000 licensed family child care homes have shut down since the early 2000s, reducing the overall industry by almost half. Experts predict that several thousand more homes will close this year as pandemic-era funding expires.
This situation will undoubtedly place additional strain on families with young children. Child care costs are already rising faster than inflation, with day care and preschool fees increasing by 6 percent in the past year — nearly double the overall inflation rate of 3.2 percent, as per government data.
In 2020, child care expenses consumed 23 percent of the income of average-wage families, up from 12 percent the previous year.
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