Child Care: A Big Investment Today for an Equitable Economy Tomorrow

There’s an old saying, sometimes things have to get worse before they can get better. The COVID-19 pandemic has shown this to be true for the early education and care sector in Massachusetts and across the nation. The sector had struggled for decades pre-pandemic, responded heroically to provide essential services during the crisis, and now requires systemic reform and bold investment to build back stronger. Old progressive policy goals like universal, affordable child care that once seemed far out of reach are now part of what’s necessary for an equitable economic recovery for all. If lawmakers don’t seize the current opportunity, the next time the child-care sector is pushed to the brink it may be too late—children, families and providers simply cannot withstand another national emergency.

Pre-pandemic, Massachusetts was making slow but steady investments in early education and care:

As our economy recovered from the aftershock of the Great Recession, our state budget started to make annual increases in the Department of Early Education and Care (EEC) and the many child-care and out-of-school time programs it regulates statewide. We’ve now seen eight consecutive years of post-recession budget increases, $346 million since Fiscal Year 2013, thanks in part to rising federal budget appropriations for child care. But the money is spread thin, across thousands of subsidy-accepting child care programs and tens of thousands of educators. It should also be noted that the 2008 Great Recession led to five years of state budget cuts, so much of the recent progress essentially backfills what was lost.
In a severely under-resourced sector and workforce, recent public investments have helped stabilize providers and inch salaries up for some members of this undervalued and underpaid set of educators, 92 percent of whom are women and 32 percent people of color.¹ Although 15.3 percent of early childhood educators still live below the poverty line,² a growing number of practitioners, advocates and champions in the State House were moving the issue in the right direction.
Boston’s development of its pre-kindergarten program was lauded as one of the highest quality, research-proven models in the nation. No, it was not universal, but it was on a path to achieve universal access by 2024 with continued federal, state and local investment. Collaborative partnerships between Boston Public Schools and community-based child-care programs were taking root with funding levels high enough to actually support quality programming. Similar grant-funded preschool models had begun in eight Gateway Cities.
A new coalition (now dubbed Common Start) had formed around the idea of universal, affordable child care. Cross-sector advocates were committed to the principal that early education and child care should be a public good. Massachusetts consistently ranked as one of the least affordable states in the U.S. for child care,³ pricing many families out of the market, including those who were eligible for a public subsidy based on their income. We had identified the problem and were working on solutions.

During the pandemic, the narrative of slow-and-steady progress suddenly shifted to one of existential crisis. All licensed early education and care providers were ordered to close from March 23 to late June, 2020.⁴ Out-of-pocket parent payments stopped during this time, and many families with young children and school-age children struggled economically. In Massachusetts, child care is a $4 billion industry, whose largest revenue source is parent fees. Our conservative estimate is that the industry has lost $1 billion due to lost parent fees during the pandemic, and it continues to operate at very thin margins in 2021.⁵ As of February 2021, only 83 percent of child care providers had reopened, representing 200,000 spots or 87 percent of pre-COVID capacity, and most programs have seen reduced enrollment.⁶ Nationally, 2.5 million women have left the workforce since the beginning of the pandemic, many citing child care responsibilities.⁷

Yet, through these challenges the child care sector has persisted, revealing the opportunity within the crisis for policy change and increased public investment. A small number of programs, 550 statewide, stayed open from March to June to provide child care for essential workers.⁸ These health and safety pioneers led the way for the rest of child care to reopen in June. The Department of Early Education and Care was able to cover the daily rate and parent fees for the 55,000 children who have a child care subsidy.⁹The policy flexibility shown by the Department, offering families financial relief and programs stable funding based on enrollment and not attendance, gave a glimpse of what the future could hold for the sector. Boston Opportunity Agenda reported that accepting subsidies was the strongest predictor of a Boston child-care program declaring its intention to reopen in September 2020.¹⁰

As the pandemic dragged on, child care started to receive the attention and public recognition needed to move big issues. Massachusetts’ early education and care system saw historic public investment in the past year—$165 million increase in the state budget, $45.6 million in the CARES Act, $130 million in the Consolidated Appropriations Act of 2021 (aka CARES II), and $510 million in the newly enacted American Rescue Plan.¹¹

Now, rather than go back to pre-pandemic normal—lower enrollment, slow-and-steady public investment, educator salaries inching towards a living wage—we must seize the opportunity to build back stronger. This is how advocates in all 50 states are meeting the moment. For example, Strategies For Children contributed to a national report by the Alliance for Early Success, calling for substantial reforms and funding in order to increase access and affordability for all families, advance the early care and education profession, reform child-care financing, and build a better child-care business model.¹² Coincidentally, many of these structural reforms are addressed by the new Common Start legislation filed here in Massachusetts.

The current child-care financing system is broken, a private market where the affluent can buy high-quality care that meets their needs, while most families struggle to pay for care at all. Lower-income families do receive public subsidies for child care, but there is always an extensive waitlist. Advocates have long called for early education and care to be treated as a public good—just like public schools or our physical infrastructure of roads and bridges—needed to maintain a 21st century workforce. Since public investment has historically been minimal, the result has been an endless balancing act between low educator pay and high parent fees at the program level. A more universal approach would create and fund a child-care system that actually benefits families, children, educators and the economy.

All of this has crested with the Common Start Coalition working with legislative sponsors to file a landmark new bill pushing for truly affordable, universal child care statewide. The full title is “An Act providing affordable and accessible high quality early education and care to promote child development and well-being and support the economy in the Commonwealth,” HD.1960 (filed by Representatives Gordon & Madaro) & SD.1307 (filed by Senators Lewis & Moran).

This bill has been two years in the making, refined with input from educators, advocates, researchers and business leaders. It would:

Establish a system of affordable and accessible early education and care where families would pay no more than 7 percent of their household income.
Stabilize early education and care providers with public investment that meets the true cost of providing high-quality care.
Ensure high-quality programs by appropriately compensating the workforce. High-quality programs affect lifelong outcomes in learning, behavior, and both physical and mental well-being for children. The relationship between early educators and children is a crucial factor in determining quality. As the table below shows, Massachusetts early educators, whether labeled “child care” or “preschool,” still earn less than half the wages of a kindergarten teacher. This pay gap fuels workforce shortages and stifles retention of high-quality early educators. The problem has only grown worse during the pandemic, as educators have been asked to take on longer hours with stricter health and safety regulations. Increasing salaries while also expanding professional development and career advancement opportunities would help address this long-term systemic problem. The Common Start bill’s bedrock funding for programs would give the necessary resources to child- care programs to appropriately support their educators.¹³