The Coronavirus Aid, Relief and Economic Security or “CARES” Act failed to specifically address this vital need in the recently enacted stimulus bill to stabilize our economy in the midst of the coronavirus pandemic. Child care is a service that’s essential to the country’s economic foundation and its future recovery.
The early childhood education industry employs an estimated 1.5 million workers nationwide and contributes nearly $100 billion to the U.S. economy. It is an indispensable support system for tens of millions of American working families.
Simply put, without quality childcare our economy will fail to reignite.
Fortunately, though significantly impacted, we believe our schools will be able to weather this storm. However, as a result of the coronavirus crisis, many child care centers around the country are closing and may never reopen. In fact, 75% of all child care centers and nearly half of all providers have already closed as a result of a precipitous drop in enrollment as parents have been furloughed, laid off or forced to work from home while also caring for their children. Many centers were forced to close overnight with no time to plan.
The relatively small number of child care centers that remain open are prioritizing care for the children of essential workers. These centers, 85% of which are operating with less than 50% of their enrollment capacity, are losing money in order to stay open as overhead expenses considerably outweigh the tuition they receive. Those that do remain open are implementing a strict variety of enhanced health and safety measures, including even more rigorous cleaning and hygiene practices and smaller group sizes to accommodate social distancing. These new safeguards require added operational costs and reduced occupancy to protect the health of children and educators.
With no certain end in sight, the impact on the child care industry is escalating exponentially, setting up a larger child care crisis. Families across all industries rely on child care—in fact, 65% of children under 6 have both parents in the labor force.
Without quality child care, families across this great nation will be unable to return to work which will significantly stifle America’s economic rebound when it desperately needs to get back on track.
Congress and the administration must enact policies to mitigate the current crisis and ensure that working parents are able to return to the labor force as shelter-in-place orders continue to be lifted.
First, Congress needs to go further in helping working class families across this country. Many families have experienced a decrease in wages as a result of COVID-19 and need substantial financial assistance to get back on their feet. This assistance can come in the form of increased eligibility and assistance through the Child and Dependent Care Tax Credit, increasing contribution limits to Dependent Care Assistance Program FSAs, incentives for companies to provide childcare assistance to employees, and considering the creation of a new Child Care Tax Credit.
Congress needs to put measures in place to help mid-to-large child care providers stabilize in a time of crisis, giving them access to additional funding. For the majority of these providers, the only source of federal assistance may be under Title IV of the “CARES” Act, and in many cases, they are ineligible.
Child care and early childhood education centers will also need assistance once they reopen. Economic recovery will happen in waves with families returning over time as states loosen restrictions. Child care centers will need to operate at less than full capacity to accommodate families who return to work during the early stages of economic recovery. This means that many will not break even for months and recovery funding will be critical to help centers pay their bills.
Without these measures, many of the centers that have fought to remain open to provide care for our health care heroes and other families on the front lines will have no choice but to close. At a time when our country needs front-line workers more than ever, we cannot afford to force these essential workers to stop working.
As we emerge from this crisis, Americans will need child care more than ever to support our economic recovery. Congress must act now to ensure the child care sector survives and can reopen to support America’s workforce.