What is the child care crisis, exactly?

A pre-school class gets excited about their reading. | Kathryn Scott Osler/The Denver Post via Getty Images

Leaders should say what they actually want to fix.

Nearly every day a new story is published about “the child care crisis” in America. (I’ve written stories referencing it myself.) President Joe Biden referred to the “acute, immediate child care crisis” and recently prioritized more spending for child care programs in his new presidential budget.

But what exactly is that crisis? A closer look at the various articles, think tank reports, advocacy campaigns, and political speeches reveal that not everyone is talking about the same thing.

Is the crisis the inability of families to afford child care? The struggle to land spots in licensed centers, or find care close to home or work? Is it a lack of support for parents who want to stay home with their kids, or the failure to provide support to other informal caregivers? Is it the inability to attract child care workers in the competitive labor market? Is it inequitable enrichment opportunities for children, or the challenges parents, particularly mothers, face when trying to work? Is it all of the above, or only some?

Crises are often multifaceted, and disagreement over what should be prioritized to address them is not unusual. But the “child care crisis” rhetoric, by combining several problems into one, often muddles the picture, and implies there’s more consensus on said crisis than actually exists. This matters because not all proposed child care solutions would address the respective concerns, and some interventions could even make aspects worse.

The first step to solving a crisis is understanding it. And policymakers know less about the child care landscape than one might expect. For instance, despite many anecdotal stories reporting a shortage of child care staff, researchers admit they do not actually have a good idea of what the supply and demand mismatch for child care actually is — what kind of care do parents actually want for their kids, and would they use center-based care if it was available? Private and informal arrangements — be it through grandparents or nannies from sites like Sittercity and Care.com — remain vastly understudied.

The concept of a “child care desert,” which has been popularized by advocates in recent years, refers to communities that have more than three kids for every licensed slot, and presumes parents would want those official slots if they were available. Experts admit they don’t know this is the case.

“The data is horrible, it’s very, very limited, we’re all trying to stitch things together from multiple incomplete sources,” said Aaron Sojourner, a labor economist who has studied the sector. “And I don’t love the ‘child care desert’ metaphor — it’s a great communications tool, everyone understands immediately that putting children in a desert is dangerous — but as a research tool, it’s fairly arbitrary, and doesn’t take into account who really wants care and under what circumstances.”

Some groups, like the Bipartisan Policy Center, have been trying to gather more precise estimates, and concluded recently that across 35 states, a gap between supply of available care and potential need for it exists for 3.5 million children, or 31.2 percent of kids. But researchers involved acknowledge their data does little to clarify parental demand for care. Those 3.5 million kids might need slots in child care, but they might not.

Separate surveys the Bipartisan Policy Center has led in partnership with the polling firm Morning Consult found that while two-thirds of parents prefer “formal care” — meaning a child care center, a home-based child care business, pre-K, or Head Start — one-third of parents prefer “informal” care — meaning care from relatives, parents, friends, neighbors, and nannies. Indeed most parents currently using informal care told pollsters they’d prefer it, even if a free and convenient formal option were available to them.

This suggests “there’s not one solution for child care needs,” said Morning Consult pollster Claire Taylor.

Leaders should say which problem they are trying to fix

Journalists often report on parents struggling to find child care, or child care businesses struggling to hire and retain staff. But not knowing what the demand really looks like complicates crafting a solution.

Should policymakers look to boost the number of licensed child care businesses run out of homes, or primarily centers? Since 2005, home-based child care businesses — which tend to be cheaper for parents — have declined by almost 50 percent, in part due to increased competition and rising regulatory burdens. Should child care be targeted to traditional working hours, or do parents need more flexible options? How has remote work affected demand?

The number of child care providers backed by private equity has also increased significantly over the last few decades, while the number of children participating in nonprofit child care, like a church-based program, has declined. Patrick Brown, a fellow at the Ethics and Public Policy Center, has argued policy should be designed to better support nonprofit options, which could help address affordability concerns and better align with parent preferences.

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Is the key crisis of child care the cost families are paying? One fundamental challenge is that an individual’s peak earning potential — in their 40s — doesn’t align with when most families have young children.

Many experts argue the government should increase spending on early childhood — partly to bring expenditures more in line with public spending on older children. But there’s debate over whether the government should subsidize the cost for more affluent households. In late 2022, Arizona State University professor Chris Herbst found that families spent 8.7 percent of their annual income on child care costs in 2019, up from 6.6 percent in 2005. This increase in cost burden, Herbst found, was similar for families regardless of income level and marital status.

Even though not all parents want formal child care, researchers do feel confident in saying the current prices deny many families, particularly low-income families, a real choice between formal options and informal ones.

Or is the child care crisis around unequal learning opportunities for children? Some researchers argue that boosting “quality” of programs, even if that makes them more costly to run, is essential. Others argue the trade-offs required to boost quality metrics are unnecessary and unduly expensive, and only serve to impede access to care.

Or is the lack of affordable child care a crisis due to its impact on workforce participation? When costs get too high for care, many parents — and usually moms — decide it makes more sense to reduce their hours or quit altogether.

Or is it the low wages paid to child care workers — which can fuel high turnover and disrupt parents’ work schedules? “The wages are undeniably empirically low,” said Herbst, who found that the median hourly wage ranked 16th lowest out of 753 occupations on a federal labor survey — in between cashiers and sports bookers. To raise staff wages without public subsidy would likely mean raising parent fees. In practice, this would mean fewer families able to afford formal child care at all.

The trade-offs of contemporary child care proposals

This won’t be an exhaustive list, but to illustrate some of the ideas above, it’s perhaps easier to look at concrete ideas people are already talking about.

One idea is increasing investments in the Child Care and Development Block Grant (CCDBG), a longstanding federal program aimed at reducing child care costs for low-income families. There’s already bipartisan support for this, as right now only a tiny fraction of those families eligible actually receive assistance.

Additional CCDBG funding could help more low-income mothers work in the labor market, and find affordable child care. But many progressive child care advocates argue policymakers should increase public subsidies to all or most families, not just low-income households, and warn increased funding to CCDBG alone would do little to incentivize quality improvements, or address low wages in the sector.

Another idea is increasing immigration. Expanding immigration could bring down the cost of child care for families by increasing the supply of workers and help more moms work in the labor market. Past research has shown that when US communities increase their supply of low-skilled immigrants, the employment of high-skilled women goes up because they can hire more nannies and cleaners. Other research found that tougher US immigration policy decreased the number of immigrants working in child care, and led to reduced employment of college-educated women.

Whether an increasing supply of immigrants would help with wages is unclear. One study found metro areas with increased low-skilled immigration between 1980 and 2000 saw “larger decreases in the median wages of childcare workers” but another found reducing immigrants led to lower wages for immigrant and native child care workers alike. Past research found that the arrival of low-wage immigrants has little to no negative effect on native-born workers’ wages or employment. Matthew Yglesias, author of the pro-immigration book One Billion Americans, noted that expanding the supply of Spanish-speaking child care workers could, for example, create new positions for bilingual child care workers to work as supervisors.

Yet many child care advocates express ambivalence about immigration as a solution — warning that the workers could be exploited and that it could detract from their broader goal of boosting the status of child care work in the US. “The history of child care in America is that it’s been done by Black women, immigrant women, and unpaid labor of moms, so there are artificially depressed wages based on discrimination,” said Julie Kashen, the director for women’s economic justice at the left-leaning Century Foundation. “The idea is to fight against the discrimination, not just to play into those kinds of ideas.”

An idea Kashen and many other advocates support instead is increasing public subsidies for licensed “high-quality” child care, as Democrats proposed doing in their failed Build Back Better package in 2021, and which Democrats plan to introduce again soon.

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This new public spending would boost child care wages and likely induce new workers to the field, though would offer little help to those parents uninterested in formal care, and could raise prices sharply for higher-income families.

Another basic idea is simply to give parents money with the discretion to spend it as they see fit. This could help more parents afford child care if they want, and potentially allow child care businesses to raise their prices and increase wages. A child allowance, however, wouldn’t necessarily boost the supply of workers, the quality of programs, or maternal labor market participation.

These trade-offs are playing out in real-time right now in Vermont, where Democrats are advancing a proposal to increase subsidies to early childhood programs, paid for in part by repealing a child credit Vermont authorized last year. Vermont’s robust child subsidy was based in part on the success of the federal government’s expanded child tax credit during Covid-19, which helped families buy household essentials and reduced the child poverty rate by 30 percent.

Vermont’s proposed reshuffling of funds would likely raise the wages of child care workers, though take money away from informal caregivers. Josh McCabe, director of social policy at the Niskanen Center, called this a “breathtakingly bad idea” and noted progressives rejected work requirements in the federal child tax credit but are now “pushing for the expansion of subsidies only accessible to households where all parents are in paid employment.”

The bottom line is you’d be hard-pressed to find anyone who says they don’t want to support children, families, and child care workers — and if “tackling the child care crisis” simply means that, then yes, everyone agrees. But figuring out exactly how to do that is where things get tricky, and where the political rubber meets the road. It also helps explain why so little has gotten done, despite seeming consensus on the crisis rhetoric.

Better data would help, particularly more research on parent preferences and informal care arrangements. But so too would speaking in plainer language about what measures we’re fighting for, and which ideas to support parents, kids, and workers we’re not.