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The True Cost of Providing Safe Child Care During the Coronavirus Pandemic

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As the nation continues to grapple with the challenge of the coronavirus pandemic, child care is among the hardest-hit and least supported industries. Parents have long struggled to find and afford child care that meets their needs; and child care businesses have equally struggled to balance the cost of providing quality, developmentally appropriate care with the limited revenues available to them. Now, the pandemic has exacerbated the existing child care crisis and raised significant new challenges. Many child care programs were forced to close for a period of time, and while many have since reopened, they are operating with decreased enrollment and increased instability due to the ongoing impacts of the pandemic. This new reality poses a dire threat to many child care programs, which were already operating on razor-thin margins and lack the financial reserves to weather the current crisis.

While the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress in March 2020, provided states with $3.5 billion through the Child Care and Development Block Grant to support access to child care, this level of funding is woefully insufficient to meet the ever-growing need. Recognizing this shortfall, in July 2020, the U.S. House of Representatives passed on a bipartisan vote the Child Care Is Essential Act, which would provide a $50 billion investment to stabilize the industry. However, as of August 2020, the Senate has failed to act on this bill or to appropriate significant additional funds for child care in a new stimulus package. Meanwhile, child care businesses continue to serve the children of essential workers and others who rely on child care to work. However, without significant federal investment, half of America’s child care capacity is at risk of permanent closure. This would have a catastrophic impact on the American economy, jeopardizing thousands of child care jobs, leaving millions of children without access to child care, and plunging parents and employers into turmoil as they continue to juggle work and family responsibilities.

Despite the critical role of child care in supporting the economy, there is a lack of clear understanding as to what it really costs to provide quality child care—particularly as child care programs face new guidelines and challenges responding to the COVID-19 pandemic. To address this, the Center for American Progress has developed an interactive calculator that estimates the cost of providing child care that meets pandemic-related state guidelines. Initial analysis finds that providers are facing, on average, a 47 percent increase in operating costs during the pandemic, with even higher increases for programs serving 3- and 4-year-olds.

These data underscore the need for immediate federal investment in child care to ensure that providers can meet these additional costs, stay open, and provide safe care for the millions of children and families who rely on it. As states grapple with the economic fallout of the pandemic and the need to balance their budgets, the federal government must step in and provide the funds necessary to support access to child care. Beyond the immediate needs related to the pandemic, policymakers should prioritize long-term funding for child care, recognizing the role the industry plays as the backbone of the economy. Robust public investment is needed to address the inequities in access to child care that have long existed and to fill the gap between what parents can afford to pay and the true cost of providing child care, including a living wage for early childhood educators.

Source: Simon Workman and Steven Jessen-Howard, Center for American Progress, September 3, 2020
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