Blog

By Marsha Basloe, President of CCSA

If any issue warrants public attention, public discussion and rethinking as to the best way to ensure families with young children have access to child care and pre-kindergarten, it is our nation’s current approach to the safety and healthy development of young children. It’s not a system as much as a patchwork quilt stitched together over decades. The federal government allocates funds to states through individual programs or funding streams (i.e., block grants), each with different rules, administered by different state agencies, and too often resulting in siloed approaches with little to no coordination or collaboration among state agencies, departments, divisions or communities.

In December 2019, Congress enacted the FY2020 Labor, Health and Human Services and Education Appropriations measure, which included the following funding levels for early care and education programs:

Source: FY2020 non-defense consolidated appropriations bill (HR 1865, PL116-94) enacted on December 20, 2019.

In addition to the funding above, in FY2019, the U.S. Dept. of Agriculture allocated $3.7 billion to states to support healthy meals and snacks for low-income children in child care centers and family child care homes [1] and the U.S. Dept. of Health and Human Services allocated the Temporary Assistance for Needy Families (TANF) block grant to states, of which states chose to use $3.8 billion for child care and $2.6 billion for state pre-K. [2] The number of children served by TANF funds for child care or pre-K is unknown because the federal government only requires aggregate spending to be reported, not how many children are served, the setting children are in (homes or centers, licensed or unlicensed) or the average price paid per child. In all, that’s more than $35 billion through various federal funds for early care and education programs.

Child care is the largest early childhood program with $12.5 billion in funding and yet only about 17 percent of eligible children (based on state standards) receive a subsidy. [3] Many states have a waiting list for assistance, including North Carolina with a waiting list of more than 40,000 children. Families have a difficult time finding care, affording care, and then many parents express concern about the quality of care. Numerous national reports have been released about child care deserts, communities where the need for child care for parents of children under age 6 pales in comparison to the licensed supply of child care. [4] The U.S. Dept. of Health and Human Services released a report in October 2019 that found the supply of home-based care has declined by more than 97,000 providers since 2005. [5]

Why? Child care is a business. Child care centers tend to operate in areas where the population is dense enough with sufficient numbers of private-pay families who can afford weekly parent fees. The operating budget for child care centers largely comprises parent fees and therefore staff is hired at the lowest wages possible to hold costs down. In a good economy with low unemployment, like we have today, turnover is high because staff often can find better-paying jobs in fast food, retail sales or other jobs that require less training or education. Turnover also costs businesses because of the marketing, interviewing, hiring and training required for new staff.

For home-based providers, the hours are long and the pay is low. According to a 2019 economic impact report by the Committee for Economic Development, [6] the average annual income of home-based providers is approximately $15,000 per year, [7] 18% higher than in North Carolina, where the average income of home-based providers is $12,300. [8] The decline in home-based providers (who often serve infants and toddlers) is a hardship for parents, particularly those in rural communities where the economics of operating a center don’t work. Home-based care is often less expensive and providers may be more willing to stay open during nontraditional hours for those parents who work shift work or have long commutes to their job. Yet, again, wages drive interest in opening a home-based program (or closing one) because other jobs in the community may pay more with fewer hours and less stress.

The reality is that mothers are working today. Nationally, approximately 72 percent of mothers with children under age 6 are working outside of the home, [9] 65.4 percent of mothers with children age 2 are working [10] and, 57.8 percent of mothers with children under age 1 are working. [11] Many of these mothers need child care, but federal subsidies reach only one out of every six eligible children. Therefore, most families are forced to afford whatever they can find. However, in too many communities, the supply is not available, let alone affordable.

There is no doubt that if our nation’s early care and education system were designed today, it would look much different. If we can’t think out of the box about a new bold system to better meet the needs of families with young children, we will be stuck with incremental, minor band-aids that ignore the real problem: the system is under-financed and poorly designed. Parents can’t afford quality child care, but we know from the research that high-quality child care really matters to the healthy development of children, particularly in the earliest years as a child’s brain is developing the fastest, setting the architecture for all future social, emotional, physical and cognitive skills. [12]

Two decades ago, child care was a work support. Today, we know that it is a two-generation strategy. High-quality child care helps parents work and helps support the healthy development of children. In fact, parents who can’t access child care reduce their hours or drop out of the workforce. About 94 percent of those who involuntarily work part-time are mothers who cite child care problems as their reason for working part-time. [13]

In 2018, the National Academy of Sciences (NAS) released “Transforming the Financing of Early Care and Education,” which reviewed the multiple funding streams for early care and education and made a number of recommendations. The NAS Committee, made up of early childhood experts and finance experts, recommended investing in early care and education at a percentage of U.S. gross domestic product (GDP) aligned with the average of other member nations of the Organization for Economic Co-operation and Development (OECD). The report recommended increasing funds in four phases, from at least $5 billion in phase one to $53 billion in phase four. [14]

However, it is not just about the money. It is also about program design and meeting the needs of families in urban and rural areas and in an array of settings that best meet the needs of the family and each individual child with an early education workforce that is trained and paid appropriately for the important work they do. 

Rethinking is always a bit more challenging than staying in the box with patchwork fixes. The current system isn’t working for low-income children whose families need a subsidy or the private market where working parents need access to affordable high-quality child care and early education programs. It is time for a discussion about a redesign.


[1] U.S. Department of Agriculture, Child and Adult Care Food Program, January 2020. https://fns-prod.azureedge.net/sites/default/files/resource-files/ccsummar-1.pdf

[2] U.S. Department of Health and Human Services, Office of Family Assistance, TANF expenditures FY2018. https://www.acf.hhs.gov/ofa/resource/tanf-financial-data-fy-2018

[3] U.S. Government Accountability Office (GAO), Child Care: Access to Subsidies and Strategies to Manage Demand Vary Across States, 2016. https://www.gao.gov/assets/690/681652.pdf

[4] Center for American Progress, https://www.americanprogress.org/issues/early-childhood/reports/2018/12/06/461643/americas-child-care-deserts-2018/; Child Care Aware of America, https://www.childcareaware.org/our-issues/research/mappingthegap/.

[5] U.S. Department of Health and Human Services, National Center on Early Childhood Quality Assurance, 2019. https://childcareta.acf.hhs.gov/sites/default/files/public/addressing_decreasing_fcc_providers_revised_final.pdf

[6] Committee for Economic Development of The Conference Board, Child Care in State Economies: 2019 Update. https://www.ced.org/childcareimpact

[7] Ibid.

[8] Ibid.

[9] U.S. Census Bureau, Table S2301, Employment Status, 2018 American Community Survey, 1 Year Estimates.

[10] U.S. Department of Labor, Bureau of Labor Statistics, Table 6. Employment status of mothers with own children under age 3 years old by single year of age of youngest child and marital status, 2017-2018 averages.

[11] Ibid.

[12] Harvard University, Center on the Developing Child. Brain Architecture. https://developingchild.harvard.edu/science/key-concepts/brain-architecture/

[13] Committee for Economic Development of The Conference Board, Child Care in State Economies: 2019 Update. https://www.ced.org/childcareimpact

[14] National Academy of Sciences, Engineering, and Medicine, Transforming the Financing of Early Care and Education, 2018.  https://www.nap.edu/catalog/24984/transforming-the-financing-of-early-care-and-education

By Marsha Basloe, President, Child Care Services Association

During a child’s earliest years, brain development occurs that sets the architecture for all future learning (e.g., the wiring needed for healthy child development across social, emotional, physical, and cognitive areas).[1]  This is what makes high-quality child care for infants and toddlers so important.

At the same time, infant and toddler care is the hardest to find. The supply of infant and toddler care pales in comparison to the needs of working parents. A report by the Center for American Progress found that 44 percent of families in North Carolina live in a child care desert where the demand for child care by working families far exceeds the supply.[2]

Even when families can find it, too many struggle with the cost, particularly for infants and toddlers. Throughout North Carolina, the average annual price of child care for an infant in a child care center is $9,254.[3]  The average annual price of child care for an infant in a family child care home is $7,412.[4]

Data from: NC Labor

For perspective, for a single mother earning minimum wage ($7.25 per hour) working full-time, she would earn $15,080 per year. The cost of center-based infant care would be 61.4 percent of her income. The cost of infant care in a family child care home would be 49.2 percent of her income. If she earns twice the minimum wage ($14.50 per hour), about $30,160 per year – the cost of child care in a center would be 30.7 percent of her income. The cost of infant care in a family child care home would be 24.6 percent of her income. If she earns three times the minimum wage ($21.75 per hour), her annual income would be about $45,240 per year. Center-based infant care would cost 20.5 percent of her income; infant care in a family child care home would cost 16.4 percent of her income.

To help families with the cost of child care, the North Carolina Division of Child Development and Early Education (DCDEE) offers qualifying families a subsidy.[5] The state pays most of the cost and families have a 10 percent co-pay. Unfortunately, not all families who qualify can receive assistance and more than 30,000 eligible children throughout the state are on a waiting list for child care financial help.[6] It is important to note that the waiting list is only a snapshot in time because some families don’t join the list when they hear about the length of it. So, the waiting list reflects only those who qualify for help and who also add their names to the waiting list in case more funding becomes available to support additional families.

For families with infants and toddlers, the supply and cost are both struggles. It’s unrealistic to think that families can access the licensed market if they have to pay a huge percentage of their income to cover the cost. Why is that a concern to all North Carolina taxpayers? There are several reasons.

  • Quality of child care and long-term taxpayer bills. When parents can’t afford the licensed market, if they must stay in the workforce to make ends meet, then they will try to make do with a variety of unlicensed care options. Given the brain development that is underway during a child’s earliest years, it is critical that a child be in a setting that promotes his or her healthy development. That’s one of the reasons for the rated child care license[7] in North Carolina and one of the reasons the NC General Assembly restricted the receipt of child care subsidies to programs with at least a 3-star rating. Supporting healthy child development is important, particularly for infants and toddlers when the brain is developing the fastest.  Taxpayers will pay more in the long-term when a child enters kindergarten without the skills to succeed through additional costs for remediation, for special education, and for those children who must repeat a grade (e.g., repeating a grade is not “free”).
  • Labor force participation. Without affordable child care, parents reduce their hours or opt-out of the workforce. Ninety-four percent of workers involuntarily working part-time due to child care problems are women.[8] In North Carolina, 457,706 children under age 6 have working parents.[9] If one-third to one-half of these children under 6 are infants and toddlers, that’s 151,043 to 228,853 children who may need some type of child care while their parents work.
  • Employers & Employees. Employers depend on working parents. And, working parents with young children depend on some type of child care.

As the General Assembly meets to discuss budget priorities, child care assistance should be at the top of the list. Given the extraordinary cost of child care for infants and toddlers, the General Assembly may want to consider reviewing other models to support access to high-quality infant and toddler care.

In June 2018, the District of Columbia City Council unanimously passed the Birth to Three for All DC Act.[10] The legislation charts the path for a comprehensive system of supports for children’s healthy growth and development with a specific focus on services for families with infants and toddlers. The Act is broad — investing in home visiting and child developmental screening, however, with regard to child care for infants and toddlers, the Act expands child care subsidy eligibility for infants and toddlers to all families by 2027, caps the percentage of annual income a family would pay toward child care expenses at 10 percent of gross income by 2028, and phases in competitive compensation for early educators. The District is now in its second year of implementation with $16 million in funding for FY2020.[11] City Council members say it’s a high priority to increase funding as part of the 2021 budget, and work on that front is underway.[12]

There are certainly differences in passing legislation that supports a city (even a large city like Washington, D.C.) compared to a state. However, the concept is innovative. It recognizes that the cost of infant and toddler care is so high that all families may struggle with the cost. It recognizes that access to high-quality infant and toddler care is important to a child’s healthy development. And, it recognizes that a compensation strategy for the child care workforce is needed to support high-quality programs.

It is time to rethink the state’s approach to child care subsidy, and especially how families with infants and toddlers are supported in accessing high-quality child care. In the new year, let’s give thanks for what we have and think through policies that can best support our children in the future. 


[1] Harvard University Center on the Developing Child, Brain Architecture.

[2] Center for American Progress, America’s Child Care Deserts in 2018.

[3] Child Care Aware of America, The US and the High Price of Child Care: 2019.

[4] Ibid.

[5] NC Division of Child Development & Early Education: Subsidy Services.

[6] North Carolina Center for Public Policy Research, June 7, 2019.

[7] NC Division of Child Development & Early Education: Star Rated License.

[8] Committee for Economic Development, Child Care in State Economies: 2019 Update.

[9] U.S. Census Bureau, Table B23008, Age of Own Children Under 18 Years in Families and Subfamilies by Living Arrangements by Employment Status of Parents, 2018 American Community Survey, 1 Year Estimates.

[10] B22-0203 – Infant and Toddler Developmental Health Services Act of 2017 (now known as “Birth-to-Three for All DC Act of 2018”).

[11] Significant Birth to Three Funding Passes in the DC Council, May 28, 2019.

[12] D.C. reaped benefits of expanded preschool. Now we must focus on even younger children.