A new study conducted by the Bipartisan Policy Center finds that the COVID-19 relief packages passed by Congress were a lifeline for struggling and sinking U.S. child care programs. Nearly all child care providers in an 11-state survey said the relief packages were essential for keeping their businesses open during the pandemic.
Child care providers used relief funds to pay for staff, rent or mortgage, facility maintenance, and personal protective equipment. The funds also allowed them to integrate competitive hiring strategies, such as retention bonuses and flexible schedules.
While the pandemic led to declining enrollment, closures, and other challenges for child care programs, providers say government assistance helped stabilize their businesses and allowed them to keep their doors open.
- To stabilize the child care market, Congress approved roughly $53 billion in supplemental child care dollars through three COVID-19 relief packages:
- Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020
- Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act in December 2020
- American Rescue Plan (ARP) Act in March 2021
- Receiving government stabilization assistance was critical to the survival of the child care marketplace during the pandemic. Nearly all child care centers (93%) and most home-based providers (83%) received government funding.
- On average, child care centers received $157,680. Large centers with more than 75 children averaged $220,284 and small centers ranged from $95,564 to $105,590. The top three uses of funds by child care centers were for paying:
- Teachers and classroom staff (58%)
- Rent or mortgage (17%)
- Facility maintenance or modifications (8%)
- Family child care homes received $20,389 on average in stabilization support. The top four uses of funds by family child care homes were for paying:
- Rent or mortgage (33%)
- Facility maintenance or modifications (19%)
- Assistants (18%)
- Personal protective equipment (13%)
- On average, lead and assistant teachers received more than a $4,000 annual boost in income. The salary for lead teachers jumped from $12/hour to $14/hour and jumped for assistant teachers from $10/hour to $12/hour.
- Child care centers and family child care homes of all sizes say the government funds were very helpful for bringing stability to their programs.
The pandemic exposed serious, fundamental flaws in the child care business model. Essentially, quality child care costs more to produce than the average family can afford to pay. The child care market is—and has been for decades—very fragile. The workforce, which consists mostly of women, is severely underpaid. Child care programs, the majority of which are small businesses, make ends meet by subsidizing costs for the most expensive children, infants and toddlers who require lower staff to children ratios. Still, for many parents, child care is both unavailable and unaffordable.
COVID-19 relief funding kept the child care market afloat, but as we emerge from the pandemic, we must address the flaws in the business model so that child care can survive, and our economy can fully recover. We need to examine the true costs of child care and who is responsible for ensuring the country has a stable, high-quality system that meets the needs of all concerned—parents, children, businesses, and our education system. Child care provides a public good and Congress and our nation needs to ensure every parent has access to safe, affordable, quality child care.
The survey represents a random sample of over 1,100 child care centers and over 1,200 family child care homes across 11 states. The random sample was selected from lists provided by the states of all licensed child care centers and family child care homes, and the data were weighted by state and licensed capacity to ensure an accurate representation.
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