Many of the nation’s early learning and child-care systems have reached a critical turning point as revenues decline, wages stagnate and families are priced out of options, experts in the field say.
“Costs are exorbitant and providers can’t afford to subsidize it on their own backs anymore,” said Melanie Rubin, executive director of the North Texas Early Education Alliance. “The wages are low with no benefits, a lot of workers are on public assistance and families can’t pay more than they can.”
Melanie Rubin
The National Association for the Education of Young Children summarized the challenge as a mix of staff shortages and burnout, rising operating costs for providers, an absence of government assistance and more programs closing than opening.
Early learning and child care centers operated by churches also have felt the brunt of the downward trend.
Parents in Alabama were “shocked” to learn last year the Troy First Baptist Church Daycare and Early Learning Center would close in May due to financial, staffing and facilities issues as well for possible renovations.
In Topeka, Kan., Susanna Wesley United Methodist Church shuttered its 30-year child care operation in September due to staffing shortages. Pastor Amy Seifert said the church will seek another group to re-open the service. “But unfortunately, decisions like that take time, and we find ourselves in the position of not being able to continue to provide the quality care that parents have come to expect from our center.”
Last November, Wilshire Baptist Church in Dallas announced its Early Childhood Learning Center would close in May due to dwindling enrollments and revenues since reopening after the COVID-19 pandemic. “We are keenly aware of how this news will affect the current and past families, teachers and other community members who have been involved in the life of the ECLC, and we want to express our sincere compassion for those affected,” Senior Pastor Timothy Peoples explained to the congregation.
Challenging trends
These and other congregations illustrate a much larger trend among churches of all kinds that once upon a time were known for their sought-after preschools.
A perfect storm of multiple factors is pulling apart providers located in churches, schools and private homes across the nation. On the one hand, operating costs have increased dramatically while on the other hand in places like Texas state-sponsored early childhood programs are unevenly pulling families with financial resources out of the marketplace.
While early “childhood education,” “child care” and “pre-K” are not necessarily synonymous, they do overlap in the relief provided to working parents.
Monica Healer
Early learning centers focus more on education for children ages 3 to 4 years old, the same age range for children served in public VPK programs, said Monica Healer, executive director of the Texas-based Early Childhood Christian Network, a nonprofit dedicated to supporting Christian early childhood educators in churches and child care centers throughout the U.S.
“We know the fastest growth in the brain occurs up to age 3, so these providers typically focus on physical, emotional and cognitive needs,” she said. “It’s about caring in tangible and intangible ways — it’s not just changing diapers.”
“The trend across the U.S. is that child care centers are struggling, and not just in church-based settings.”
Cutbacks and closures occurred before the pandemic but have accelerated in the past five years due to rapidly rising costs, Healer said. “The trend across the U.S. is that child care centers are struggling, and not just in church-based settings. Labor costs are going up and have doubled in almost every area.”
In some situations, these challenges are further complicated by inefficiency, she added. “ELC leaders are wonderful people who love God and love children but often have no business experience at all, and lack skills in hiring people, firing people and balancing budgets.”
Regardless, costs are going up and as they do, there are limits to what parents are willing and able to pay.
Some projections are bleak. A 2023 Century Foundation report forecast the nearing closure of 70,000 child care programs nationwide, resulting in the loss of 232,000 child care jobs.
“Parents will be forced to leave or change jobs, reduce work hours or create piecemeal child care options,” the report warned. “On aggregate, we project parents will lose $9 billion in earnings per year across the United States. In six states — Arkansas, Montana, Utah, Virginia, West Virginia, as well as Washington, D.C. — the number of licensed programs could be cut by half or more. In another 14 states, the supply of licensed programs could be reduced by one-third.”
Why is this happening?
The blame for the situation cannot be solely pinned on the pandemic, the Center for American Process said in a 2023 study on child care and early learning in the U.S.: “Across the country, child care access and affordability, as well as job quality for the professionals who make up the sector, has long suffered systemic shortfalls that drive up prices, limit options for care, and leave child care providers and workers vulnerable to broader market changes.”
Most centers have struggled financially for many years, with 220,000 providers barely sustained with COVID-era federal subsidies.
“Even before the COVID-19 pandemic, a typical U.S. child care business operated with approximately a 1% profit margin,” the report noted. “The vast majority of child care providers simply cannot afford to pay workers competitive wages because doing so would require programs to increase tuition beyond what families can pay.”
“Even before the COVID-19 pandemic, a typical U.S. child care business operated with approximately a 1% profit margin.”
The trend is interrupting childhood learning and development and wearing on family finances, the report said. Close to 14.5 million, or 68%, of children under age 6 have both parents in the workforce, and 2.7 million parents have reported changing jobs due to child care problems, the CAP study found. Average annual tuition for center-based child care in 2022 was $13,167 for one infant, $10,472 for one 4-year-old and $23,639 for an infant and a 4-year-old.
Many — but not all — church-based early childhood programs served families that could pay tuition, not poor families. And many of these church-based programs were in urban areas, where families with resources in states like Texas now have greater access to state-funded programs.
Still out of reach
Meanwhile, pre-K programs in public schools are helpful but out of reach of many families. “Public preschool programs — state-funded and -run early childhood education programs serving children ages 3 and 4 — are an essential part of child care supply. However, most children lack access to high-quality, publicly funded preschool,” the report explained.
Even before the pandemic, only 6% of 3-year-olds and 34% of 4 year-year-olds were enrolled in state-funded early education programs. As far back as 2018, CAP said it documented 51% of the U.S. population living in child care deserts devoid of licensed providers.
“While stabilization grants were essential in keeping many providers afloat during the COVID-19 pandemic, case-study examples indicate that many areas across the country have experienced a decrease in child care supply, leading to a growth in new child care deserts. Additional research suggests that worsening child care deserts likely had the most substantial impact on Black, Hispanic, rural and low- or middle-income communities.”
“Many child care providers cannot afford to raise wages because doing so would raise tuition beyond what most families are able to pay.”
At the same time, the early learning and child care workforce continues to be undervalued and underpaid, with workers typically earning “poverty wages” with little or no benefits. “Many child care providers cannot afford to raise wages because doing so would raise tuition beyond what most families are able to pay,” the report stated.
Seeking a larger child care tax credit
Parents’ ability to afford child care will weaken considerably if Congress does not include an existing child care credit in its ongoing tax bill deliberations, said Anne Hedgepeth, senior vice president of policy and research with Child Care Aware of America.
Anne Hedgepeth
She joined advocates with the National Association for the Education of Young Children and the First Five Years Fund on a Jan. 29 webinar about how to press federal legislators to support and expand the Child and Dependent Care Tax Credit.
“It is the only tax credit that helps working families keep more of what they earn to pay for child care,” Hedgepeth said. The provision “is the only tax credit that helps families with their child and dependent care costs and expenses. It reaches millions of families and provides a limited amount of relief for child care expenses. It really needs an update, so we have the opportunity to make the case and we also have to stand firm and tell Congress not to cut the” credit.
That credit enables families to claim up to $3,000 for one child and up to $6,000 for two or more children, which comes nowhere close to covering enough of a family’s child care needs, Hedgepeth said. “We’ll be making the case for an update to or an enhancement of the (credit) so that parents and families have more resources, all the while fighting for annual funding for our child care and early learning programs so we can grow the child care supply and provide more support to families.”
State approaches
In some states, government, business and nonprofit groups are working to make child care more affordable. For example, Florida offers parents child care financial assistance, Alabama uses a voucher system to supplement child care costs and Michigan’s Tri-Share program divides the cost of child care between the state, employees and employers.
In Texas, more than 120 advocacy, faith-based, business, health care and education groups have urged the Legislature to act boldly on behalf of struggling child care providers and users.
In an October statement, they pressed lawmakers to expand the Texas Workforce Commission’s child care scholarship program, provide grants communities can use to expand services in child care deserts, and increase public pre-K availability through community-based partnerships.
The groups estimated 80,000 or more children were stuck on child care waiting lists in 2024 and one of the organizations, Children at Risk, reported there are 337,000 more low-income children under age 6 than spaces available in early learning and child care settings.
“Unfortunately, Texas is experiencing a child care crisis, and many working families are unable to find and afford the high-quality care they need,” the report said. “Because of a lack of funding, programs struggle to recruit and retain staff and serve parents in need,” and the economy suffers because “Texas businesses rely on high-quality child care to recruit and retain an effective and reliable workforce.”
The early learning and child care situation will continue to spiral downward if legislatures, businesses and providers do not work together, Rubin added. “We are at a critical juncture in a system that has been long broken. The challenge exists in every state and it will take creative solutions to address it.”
Child care advocates met with Texas lawmakers Feb. 12 to appeal for a funding increase for the commission, The Dallas Morning News reported. “Child care centers will continue to close, wait lists grow longer, and parents will remain stuck in a cycle where they cannot work because of a lack of child care, yet they cannot afford child care without work,” the operator of two child care centers said during a Senate committee meeting.