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The number of child care centers has not kept pace with the rising demand for child care, in part because of the competing challenge of retaining child care workers with better pay and keeping child care affordable.

Demand for Affordable Child Care Still Outpaces Available Child Care Centers  

Child care has emerged from being a parental concern to a pillar of a healthy economy. “When more women work, economies grow,” Forbes declared. “Having a more inclusive workforce leads to increased innovation, productivity and diversity of ideas.”

However, the pillar is showing some cracks.

Data indicates more than 27 million American families rely on child care to allow parents to work outside the home. When child care isn’t available, a parent may be forced to drop out of the workforce, aggravating a chronic worker shortage. Child care is frequently unavailable because it is hard to recruit and retain child care staff, in part because of low pay and working conditions.

Even when child care is available, it can be too expensive for many families to afford, especially those with first-time jobs with low pay, rising housing rents and student loan payments. That could account for why a significant percentage of younger Americans are sour on the U.S. economy.

A representative family budget explains why. A family with an annual income of $40,000 may have to spend $15,000 per year for child care after somehow paying rent, utilities, taxes, grocery bills, medical expenses and student loan debt. The average monthly price for daycare in America is $1,230. It’s more than twice that much for nanny care, which may be required for infants with special needs.

The U.S. House has approved legislation that slightly improves the $2,000 per child federal child tax credit by making more of the credit refundable. Oregon Senator Ron Wyden negotiated a similar bipartisan measure, but the Senate hasn’t acted on it or the House version. During the pandemic, families with children received monthly payments of between $250 and $300, which sharply reduced the number of children living in poverty.

President Biden has submitted a federal budget for fiscal year 2025 that promises to provide “affordable, high-quality child care from birth to kindergarten” for all American families with annual incomes of up to $200,000. With split control of Congress, that request is more aspirational than realistic.

Oregon lawmakers in the just completed 2024 session approved $171 million to support employment-related day care that serves 16,000 families with working parents. Child care advocates sought $221 million that would have allowed providers to serve the 1,900 families still on a waiting list.

Child care advocates praised approval of the CHIPS Child Care Fund that could enable child care providers to receive federal funding in connection to expansion of the semiconductor industry in Oregon.

Demand Outstrips Supply
Even though fewer children are at home with a full-time caregiver than three decades ago, there hasn’t been a commensurate increase in private child care providers. The law of supply and demand isn’t working in the licensed child care industry.

According to the National Child Care Association, which represents licensed child care providers, “The low return on investment is very often a deterrent to individuals capable and interested in becoming owners of a child care center. This occurs more often in rural and lower economic areas.”

Fifty percent of families with working parents with children who need child care live in communities considered “child care deserts” with few if any licensed child care providers.

To retain skilled workers and avoid staff turnover, child care providers must improve pay and benefits for staff members, but that results in higher rates than some families can afford.

“The child care workforce is in crisis due to low wages, lack of benefits and working conditions,” the Association says. “Many providers are not able to accept more children into their programs because they are unable to staff their classrooms with qualified child care professionals and educators. Providers are forced to raise their rates to afford the cost of rising prices in labor and goods, therefore making it even less affordable for working families.”

As of this month, the average pay for child care workers in Portland is $20.68 per hour, with a maximum rate of $28.18. The average rate in the entire state is $19.19 per hour, though a few communities such as Fairview, Cornelius and Aurora have base rates as high as $24 per hour. The average national base rate is $18.61.

Child care providers struggle to retain workers
while keeping child care affordable.

Child Care and the Economy
The U.S. Chamber of Commerce Foundation has calculated the economic loss incurred by the lack of quality child care in the country. It estimates the untapped annual economic potential in various states as $5 billion in Florida, $3 billion in Michigan and $9 billion in Texas. The national average for all 50 states is an economic loss of $1 billion annually.

Based on its economic findings, the Foundation cited the “urgent need for comprehensive and accessible child care solutions.”

The Washington Center for Equitable Growth, a nonprofit that promotes broad-based economic growth, says the U.S. child care crisis “did not develop by chance.”

“The crisis,” it explains, “is the result of decades of policy decisions that deprioritized helping families for the sake of arbitrary budget constraints and fears over, in the words of President Richard Nixon, the supposed “family-weakening implications” of a child care system that facilitates maternal employment, devaluing the critical work of women, primarily women of color, in the process.”

High-Quality Child Care
In addition to being cared for while a parent is at work, high-quality child care centers help children socialize and get along with their peers. There also is evidence that children in child care settings get a head start on reading and positive engagement in activities.

Child care centers on nurturing and engaging in positive activities. Preschools focus on education for three- and four-year-olds and are credited for helping many students learn basic math skills.

Head Start is a federally supported program to promote school readiness for low-income families. Oregon’s Early Head Start program provides early, continuous, intensive and comprehensive child development and family support services to low-income pregnant women, infants, toddlers and their families.

Child care and preschools aim to enhance cognitive, social and emotional development of children before they begin kindergarten.