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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

Marsha Basloe, President of Child Care Services Association

It’s common sense that parents with young children need access to child care in order to obtain and retain a job, which makes child care providers a vital part of local and state economies.  That’s why a report released by the Committee for Economic Development, Child Care in State Economies: 2019 Update is so important. The report reviews the market-based child care industry (which includes centers and home-based child care providers) and estimates that child care has an overall economic impact of $99.3 billion – supporting over 2 million jobs throughout the country.

What the report shows is that there is a strong link between child care and state and local economic growth and development. And, that the child care industry causes spillover effects (additional economic activity like the purchase of goods and services and job creation or support within the community) beyond those employed within child care or the business income of those operating centers or home-based programs.

Here in North Carolina, child care programs have an overall economic impact of $3.15 billion ($1.47 billion in direct revenue and $1.67 billion in spillover in other industries throughout our counties and cities).  Child care programs have an overall jobs impact throughout the state of 64,852, which includes 47,282 individuals who are employed within child care centers or who operate a home-based business plus another 17,570 in spillover jobs – created through the activity of those operating child care programs.

The economic impact of child care matters because it helps drive local economies. When parents can access child care, they are more likely to enter the workforce and stay employed.

Access to affordable child care also supports parents who seek additional education or job training, which can result in higher earnings over an individual’s lifetime. For example, according to U.S. Census Bureau data, the difference between the income of a parent in North Carolina with a high school degree and a parent who dropped out of high school is $6,231 annually[i], but over a lifetime, that’s $249,240 the parent would earn just by going back to school to earn a high school diploma.  If that parent were to enroll in community college, and obtain an Associate’s degree, he or she could earn $10,652 more annually[ii] or $426,080 more over a lifetime compared to a parent who has not graduated from high school.

Earnings for those with a college degree are that much higher — $17,748 annually[iii] for a parent who has a Bachelor’s degree compared to a parent with an AA ($709,920 more over a lifetime). When parents have access to child care, both labor force participation grows (and with that, the ability for parents to support their families) and also the potential for parents to return to school to increase their earnings over the long-term becomes possible.

Child Care Costs & Labor Force Participation

In North Carolina, the average annual cost of child care is expensive. For center-based infant care, the cost is about $9,254 per year, and for home-based care, it’s $7,412.[iv] The cost of center-based infant care exceeds the cost of tuition at our 4-year universities and is 19.2% of state median income. With an understanding of the economic impact of child care, it’s concerning that parents may opt out of the workforce or reduce their hours at work when they can’t afford to pay the cost of child care. It not only means that parents could be less likely to be self-supporting, but that local economies are impacted as well – twice in fact. First, they are impacted by families who without employment may depend on welfare and second, communities are impacted by revenue foregone (no earnings or reduced earnings by those who reduce their hours means less revenue to support basic community needs such as police and fire protection, or local schools).

The CED report finds an economic return related to the use of child care subsidies that support parents in entering or staying in the workforce. CED estimates that for every additional federal dollar spent for child care subsidies to help parents work, there’s a $3.80 increase in state economic activity.

Child Care has a Two-Generational Impact

While I’ve mentioned the economic impact of child care on state and local economies, there is also the two-generational role that child care plays with regard to families and young children. Child care is a work support for parents, but it also enables children to be in a setting that promotes their healthy development and school readiness (while their parents work).  In this way, child care not only has a direct impact on the economy today, but also impacts the economy of tomorrow.

The impact of child care is broad-based:

  • There’s the direct impact of economic activity or revenue generated by those in the child care industry (centers and home-based providers),
  • There’s the indirect impact or spillover impact that results within communities from the operation of these businesses,
  • There’s the employment impact of jobs within the industry and spillover jobs as a result of the industry,
  • There’s the employer impact as parents who have access to child care reliably show up for work and are productive while at work, and
  • There’s the impact on children who have access to quality child care that supports their healthy development.

Check out CED’s Child Care in State Economies: 2019 Update report today.


[i] U.S. Census Bureau, Table S2001, Earnings in the Past 12 Months, 2017 American Community Survey. https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_17_1YR_S2001&prodType=table

[ii] Ibid.

[iii] Ibid.

[iv] The US and the High Cost of Child Care:2018, Child Care Aware of America, http://usa.childcareaware.org/advocacy-public-policy/resources/research/costofcare/

Stacey Graham

Stacey Graham always loved working with children and started out as a substitute in the public schools. A friend opened a family child care home and shared how much she loved it and how rewarding it was. Stacey decided to follow suit and hasn’t looked back. She has operated her own program since 2007 and from the outset she understood the importance of education. She started off with the North Carolina Early Childhood Credential, but knew that the basics were not enough to meet the needs of her children.

“Once I really started school, I said, ‘Wow, I didn’t know anything about working with children.’” Stacey continued, “You don’t know what to teach if you don’t go to school. You have to know what to look for in children to do the best by them.”

Stacey kept pursuing her coursework while she maintained her child care home, and eventually earned her Associate Degree in Early Childhood Education. According to Stacey, education has changed since she was young.

“There are a lot of expectations now for five year olds. They have to be able to do so many things. The more I learn, the more I can help them learn.”

She wants to prepare her children for the next level. She feels that the Child Care WAGE$® supplements help her do that, and she has received multiple increases in her awards due to her education gains.

“I love WAGE$. Most of my check goes back into my program for the children. It often supports a special outing and helps my single parents who cannot afford that extra money. It was definitely an encouragement to return to school. I appreciate WAGE$ and T.E.A.C.H. A lot of things wouldn’t have been possible without those two programs working together. They help providers get and do more. I hope both continue.”

Stacey has accomplished so much with her child care program and two-year degree, but she doesn’t want to stop. She’s taking a summer course toward her Bachelor’s Degree and in the fall, she plans to take a full course load and continue teaching.

When she reflects on what makes her proud, it isn’t just her education. She says that the children in her program don’t leave until they age out. “One mom brought her son here when he was six weeks old and he stayed until he went to school. Even at age 11, he still wants to come back and see me. He lives in Florida now and asks to spend the summer here!”

Learn more about Child Care WAGE$® Program here.

Learn more about Teacher Education and Compensation Helps (T.E.A.C.H.) Early Childhood® Scholarship Program here.

Marsha Basloe, President of Child Care Services Association

Homelessness is a reality for many families with young children in our country. In fact, infancy is the period of life when a person is at highest risk of living in a homeless shelter in the U.S. And families with younger parents are at higher risk of experiencing sheltered homelessness than families with relatively older parents. Adults between the ages of 18 and 30 in families with children were three times more likely to use shelter programs than adults over 30 who live with children (U.S. Department of Housing and Urban Development, 2016 AHAR Part 2).

As president of Child Care Services Association (CCSA), I am committed to ensuring that all our young children have high quality early care and education experiences. CCSA works to ensure affordable, accessible, high quality child care for all families through research, services and advocacy. We provide free referral services to families seeking child care, financial assistance to families who cannot afford quality child care, technical assistance to child care businesses, and educational scholarships and salary supplements to child care professionals through the T.E.A.C.H. Early Childhood® and Child Care WAGE$® Projects.

More and more people understand that high quality early childhood care and learning prepares children to succeed in the classroom and in life. Yet, what may not be known is that the impact of homelessness on children, especially young children, is extremely challenging and may lead to changes in brain architecture that can interfere with learning, social-emotional development, self-regulation and cognitive skills. In today’s world, children should be healthy, alert and motivated to have a better chance of leading productive lives. Not every child, however, has that chance.

Last week, Chapin Hall released Missed Opportunities: Pregnant and Parenting Youth Experiencing Homelessness in America. This third Research-to-Impact brief by Chapin Hall presents findings related to the experiences of young people who are pregnant or parenting and don’t have a stable place to live. They learned that rates of pregnancy and parenthood are high among youth experiencing homelessness, and that many of the young parents are homeless with their children. For pregnant and parenting youth who are homeless, the difficulties of coping with pregnancy and parenthood are compounded by the trauma they have experienced and the ongoing stress of not having a safe or stable place to live with their children.

We know that experiences of homelessness in early childhood are associated with poor early development and educational well-being. These experiences during infancy and toddlerhood are associated with poor academic achievement and engagement in elementary school (Perlman & Fantuzzo, 2010). Additionally, experiences of homelessness are associated with social emotional delays among young children (Haskett, et. al, 2015) and poor classroom-based social skills in elementary school (Brumley, Fantuzzo, Perlman, & Zager, 2015). These findings underscore the importance of ensuring that young children and their young parents who are experiencing homelessness have access to support that is critical to improving the long-term educational outcomes of children nationwide.

Karen McKnight, director of our NC Head Start Collaboration Office, coordinated a statewide Trauma in Early Childhood Education Workgroup, and I feel fortunate to be part of this effort. Promoting early childhood development and buffering stress experienced by young children experiencing homelessness and their families will be part of this work. This group of professionals from Head Start, Smart Start, CCR&R, PCANC, NCAEYC, NCIMHA and others will be attending a two-day on-campus program, facilitated by Nonie Lesaux and Stephanie Jones, faculty directors of the Saul Zaentz Early Education Initiative at the Harvard Graduate School of Education. The training is guided by the question: How can early education leaders support the design and implementation of strong early learning environments, particularly in settings serving children facing adversity?

I hope we can all work together to have an early childhood workforce to meet the social-emotional and mental health needs of all our young children and their families. May is Mental Health Awareness Month. How are you supporting this work?

See additional resources below.