The looming child care crisis
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Illustration: Sarah Grillo/Axios
Nearly 90,000 children in Virginia are at risk of losing day care as hundreds of programs in the state could shutter in the coming months.
Driving the news: The pandemic-era funding that helped stabilize the child care industry ran out Saturday.
- The federal funding amounted to a $24 billion Band-Aid that helped providers raise worker pay while lowering customer costs in the wake of massive industry disruption due to COVID-19.
- Virginia received $488.6 million in American Rescue Plan funding to help stabilize child care programs.
Now that money is gone.
Why it matters: The "child care cliff" is hitting just as women, particularly mothers, are finding their stride in the U.S. labor market — with workforce participation at new highs and the employment gap between men and women at record lows.
- If the dire forecasts prove true, millions of parents — particularly mothers — are going to be left with some hard choices.
- Their child care provider could shut down or raise prices past affordable levels, which is widely expected — and many parents could exit the job market entirely.
Zoom in: In Virginia, as many as 1,383 child care programs that serve 88,265 children may close without additional funding, according to one widely cited estimate from the Century Foundation.
The big picture: This cliff is new, but the reality is the industry in the U.S. has been living on the edge for a long time.
- Providers are limited in their pricing power because most parents can't pay all that much for care. To keep costs down, workers make very little — $14.22 per hour on average, per U.S. Bureau of Labor Statistics numbers from 2022 — and providers operate on razor-thin margins.
Be smart: The average annual cost for center-based toddler care in Virginia last year was $11,579 ($965 a month) — nearly as much as a year of in-state college tuition, according to the Annie E. Casey Foundation.
- Nearly 68% of Virginia children under the age of 6 are in households where both parents work.
Some good news: The state still has another year on its two-year child care subsidy pilot program, which increased providers' reimbursement to help them stay afloat.
What's next: Child care centers aren't going to suddenly close this week. Experts predict the impact of the fall off the cliff will take time to develop.