We Need a Daycare Revolution

Kristen Moss pays $2,800 to $3,000 a month for her 2-year-old to go to daycare five days a week and her 4-year-old to attend pre- school and aftercare four days a week. “It was worse last year when both kids were in daycare,” says the corporate communications professional, who lives in the Boston suburb of Melrose, MA. “We have a calendar counting down the days until September 2018, when our son goes to kindergarten and we will have an extra $1,500 a month.”

Massachusetts may have been voted the best place to live by U.S. News & World Report in February, but it has the highest daycare costs in the country after Washington, DC: It’s an average of $1,422 a month for full-time, center-based infant care in Massachusetts, and $1,065 a month for a 4-year-old. Budget-busting childcare costs like these are a reality pretty much across the country. In fact, only one state—Louisiana—offers childcare that costs 7 percent or less of household income, what the Department of Health and Human Services defines as affordable.

Louisiana’s lower costs are thanks to its School Readiness Tax Credits, five separate benefits providing $16 million a year for early-childhood education. In addition to offsetting fees, the provisions incentivize daycare workers to strengthen their credentials, and offer financial support for care providers, many of whom are moms themselves. These changes have made good childcare in Louisiana more within reach, but they remain the outlier.

A Question of Quality

Unfortunately, exorbitant costs don’t often guarantee great care. In a comprehensive assessment from 2006, the most recent study, the National Institute of Child Health and Human Development found just 10 percent of daycare programs were high quality, with the majority of America’s pro- grams rated “fair” or “poor.” Researchers examined safety, group size, adult-to-child ratios and other factors. “Positive caregiving,” defined as “sensitive, positive and frequent interactions” between adults and kids, was one of the strongest indicators of high-quality care. Not surprisingly, it was more pronounced in centers with low adult-to-child ratios and caretakers with higher education levels.

These early interactions affect kids for life. “Children who receive high-quality early education are less likely to fail future grades and more likely to graduate high school and go to college,” explains Bob Sanborn, Ph.D., CEO of the Texas-based research and advocacy group Children at Risk. “They are better able to work and cooperate with others, less likely to end up in the justice system, and tend to be better citizens.”

Since we’re acutely aware of how crucial these early years are, you’d think the system would prioritize training and motivating childcare workers. But the reality is just the opposite. Daycare teachers earn a median hourly wage of $9.77, on par with fast-food workers.

“Young people see working with 4-year-olds as a pathway to poverty, so if they want to work with little kids, they will work with 6-year-olds,” says Marcy Whitebook, Ph.D., director of the Center for the Study of Child Care Employment at the University of California at Berkeley. Kindergarten teachers earn a median income of $54,650 a year, compared with daycare workers’ $21,170. The problem is that committed educators are the very ones daycares need to recruit and retain, says Whitebook, because they know how to improve overall care quality.

Low wages not only attract a less educated workforce, but they also further reduce the quality of care. Many childcare workers live below the poverty level, and almost half receive public assistance like food stamps and Medicaid. That’s twice the rate of the U.S. workforce overall. The financial stresses “interfere with caregivers’ ability to have positive interactions with young children,” says Whitebook. What’s worse, a turnover rate of 30 percent means kids might not see the same teachers every day, which can prevent them from forming secure attachments and fully developing social, emotional and language skills.

Minimum-Wage Hikes Doing Minimal Good

Boosting workers’ salaries would seem to be the answer, but there are some pesky complications. At least 19 states began 2017 with new minimum-wage requirements, with hourly spikes of five cents to $1.95. Yet many daycare centers can’t afford these increases without passing along the burden to families. Parents who are minimum-wage earners themselves may no longer qualify for childcare subsidies because of their own raises.

Christina Norris is a full-time teacher making minimum wage at Parkview Early Learning Center in Spokane, WA, a state that increased pay from $9.47 to $11 in January. Last year, childcare subsidies meant a co-pay of just $65 a month for her now 18-month-old daughter to attend Parkview. This year she has to pay $800 a month. A nonprofit has been helping with her costs, but the aid will soon run out. “The pay increase is supposed to benefit people, but it actually makes it harder for everyone,” she explains. “We’ve had to raise tuition prices to stay in business.”

There’s also this: Those with less education may now earn nearly the same as credentialed workers. Centers can’t afford to pay better-educated workers more because they’re shelling out for the state-imposed increases for minimum wage. Cyerra Eby is one of those credentialed workers who started out making $11 per hour. “I try my hardest while I’m at work, but some teachers’ attitudes have gone down,” she says. “It’s demotivating when there’s no room to earn more.”

“We’re remodeling our wage structure to bring it in line with the cost of living, as we should, but we forgot it’s connected to the childcare system, which didn’t change,” Whitebook says. “It’s like putting brand-new appliances in your kitchen and realizing you need to rewire behind the walls.”

No Simple Solution

While no other state quite matches Louisiana’s affordability, some have recently introduced similar plans. New York and North Carolina both passed new budgets including expanded childcare tax credits. In the meantime, President Trump’s multipronged childcare proposal would allow couples making up to $500,000, and single parents earning up to $250,000, to deduct childcare costs from their taxable income. Critics say the deductions help only families that make enough money to have a tax liability, not low- to middle-class families who don’t. “Deductions tend to help higher-income people more because they pay higher tax rates.” Plans like this can lower their rates significantly, says Heidi Hartmann, Ph.D., president and founder of the DC-based nonpartisan Institute for Women’s Policy Research.

Hartmann points to a recent report from nonpartisan think tank Tax Policy Center that says families with incomes below $40,000 would see after-tax income grow by $20 or less. More than 70 percent of the total benefits would go to families with income above $100,000—and 25 percent to families making above $200,000.

Trump’s policy would also expand dependent-care savings accounts, which allow people to put money aside, tax-free, for childcare costs. The government would even match the first $1,000. But saving that amount of money is difficult—if not impossible—for many low-income families. Plus, “the new tax savings accounts can be used for almost any child-related activity, like music lessons or summer camps, which the rich spend more on than the poor,” says Hartmann.

Also of note: The deduction, which will be capped at the average cost of childcare in your state, can be taken “even if one parent is staying home to provide care and isn’t paying cash for childcare at all,” says Hartmann. Since this is not available to families claiming the tax credit, it will be used only by richer families, she explains.

Positives to the plan include the Earned Income Tax Credit. Lower-income families who don’t have a tax liability (so can’t get the deduction) would be eligible for up to $1,200 in spending rebates. “This extra cash will allow families more daycare choice and help them get better quality care,” says Aparna Mathur, Ph.D., a resident scholar in economic policy studies at the American Enterprise Institute, a conservative-leaning think tank in Washington, DC. Detractors, though, say that amount barely makes a dent in annual childcare fees.

As families wait to see how the government will ease their financial burden, at least they’re satisfied with the quality of care, no matter what that dismal 2006 study says. Nearly 60 percent of parents believe their child receives “excellent” care, according to the report, Child Care and Health in America by NPR, the Robert Wood Johnson Foundation and the Harvard T. H. Chan School of Public Health.

Lauren Gard of Wayne, PA, a Philadelphia suburb, pays $1,200 a month for her 19-month-old son’s care and is among the satisfied. The public relations exec says, “It’s expensive, but knowing he’s in the hands of energetic, responsible and compassionate caregivers makes it worthwhile for me.”