This is the true cost of the childcare crisis

By Kathleen Davis

November 22, 2021

The childcare crisis in America isn’t new. Parents in the U.S. have always known that childcare—especially from birth to Kindergarten—is expensive, hard to find, and a frequent source of stress.

The average cost of full-time childcare is higher than in-state college tuition in more than 30 states, which means that childcare often costs more than many parents make. The pandemic has also made childcare more difficult to find as many childcare centers (one in four by some estimates) have gone out of business in the last two years.

Parents have always juggled finding care for their school-age kids for the summer months, or school breaks, or even just the three hours between the end of the school day and the end of the workday. It’s always been a precarious balancing act, and those with less money and fewer resources struggle the most.

But until the pandemic hit, it was viewed by many as a personal problem. Once schools shut down and childcare centers shuttered, our unsustainable childcare system finally became an urgent part of national conversation. Now, as we navigate what the future will look like, we have the opportunity to rethink and rebuild this broken system.

To break down the problem and explore both public and private sector solutions I was joined by Wendy Chun-Hoon, director of the Women’s Bureau of the Department of Labor, and Elliot Haspel, an education policy expert and author of Crawling Behind: America’s Childcare Crisis and How to Fix it. (The episode was recorded at the Fast Company Innovation Festival earlier this fall.)

With labor shortages across industries, Chun-Hoon laid out how a lack of childcare impacted mothers’ workforce participation. “It’s still 2.8 million women who are not back in the labor force. Over a million fewer moms with kids who are under 13, are employed now as opposed to pre-pandemic,” said Chun-Hoon.

Haspel agreed. “Childcare truly is infrastructure. It is the sort of industry that underpins every other industry. Women with children under age six made up 10% of the workforce before the pandemic, but accounted for 22% of the jobs during the crisis,” he explained. “The ability to find quality childcare is likely to be a determining factor for employment. We know that the lack of childcare is holding the economy back, and a lot of that’s happening because the childcare industry itself is in crisis.”

The cause of the the crisis within the childcare industry, Haspel says, is decades of underinvestment. The real cost of care is so high that childcare can’t easily raise wages to compete with other industries, which means there are fewer spots for children, since centers have to keep a low child-to-teacher ratio. Fewer spots means parents are left without options and can’t work themselves. “We have to start by stabilizing the childcare industry with public funding before we do just about anything else,” he says.

Private sector solutions such as onsite daycare aren’t enough, both Chun-Hoon and Haspel agreed. Quality childcare is difficult and expensive to set up—and even if it’s put into place it only serves a small number of people and a small portion of needs. Also care, Haspel argues, shouldn’t be a job-linked benefit.

Both agree that public funding is the best solution, and that true care infrastructure goes well beyond childcare for kids under five years old. “Families and children don’t exist in vacuums, dealing with issues around elder care issue or a significant medical needs can just easily put a strain on a family. So I think sometimes we zoom in a little too close on to the kids [when] actually it’s the ecosystem of the family around them,” Haspel says.

Listen to the full episode for a detailed breakdown of public policy solutions, including paid family leave and Universal Pre-K, as well as an explanation of the lifelong ripple effects of early childhood education and the long-term economic impacts.

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