Child care industry struggling following the COVID pandemic
Rebecca Davis, who runs a daycare in Mabelvale, Arkansas on how the child care industry has been impacted after the expiration on COVID funds, and says she only takes home $2 after paying expenses
Child care providers are struggling to stay afloat after COVID-era funding expired last year.
"We're struggling," Arkansas daycare operator Rebecca Davis said Wednesday on "Fox & Friends," blaming "across the board" cost increases.
"The uncertainty of our enrollment from day to day, and then now with the price of materials and food that has doubled, the cost of living has increased."
Federal funding from President Biden's American Rescue Plan expired last September – the end of fiscal year 2023.
According to research by the Century Foundation from last year, the end of the American Rescue Plan funding could affect the care of over 3 million children.
"More than 70,000 child care programs—one-third of those supported by American Rescue Plan stabilization funding—will likely close, and approximately 3.2 million children could lose their child care spots."
The report added, "The loss in tax and business revenue will likely cost states $10.6 billion in economic activity per year."
Even prior to the federal funding expiration, the child care sector was struggling. High inflation, enrollment insecurity and staffing remain a persistent challenge for providers.
Davis revealed educators were making "pretty close to $2 an hour."
BIDEN ADMINISTRATION TAKES AIM AT POPULAR CHILDCARE PROGRAM
"It is very, very well below minimum wage. After paying payroll and supplies, food, materials, utilities, insurance," she said. "You do not get into the child care business to make money. You get into child care to provide quality care for children, so the pay is very, very low."
Child care sector concerns do not stop with providers. Parents and families are also struggling to afford a steep cost-of-living increase and pay for child care.
A recent report found that parents spend nearly a quarter of their income for child care costs. According to the 2024 Cost of Care report from Care.com, the data is down slightly from last year's estimates, but it remains more than three times higher than what is deemed affordable by the U.S. Department of Health and Human Services.
Health and Human Services Secretary Xavier Becerra testifies during a hearing of the Senate Appropriations Committee on Capitol Hill, Nov. 8, 2023, in Washington. (AP Photo/Alex Brandon, File)
The report also found that child care is costing some families more than college tuition, with a fifth of parents spending upwards of $36,000 a year in parts of the country.
Over one-third of respondents also said they have to use funds outside household income to pay for services. On average, parents pulled a staggering 42% of their savings to pay for child care.
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"Back years ago, families had an extended family, grandmothers, aunts that could provide that care. Then we have seen families be able to survive one income paying the child care. Now it's taking both parents to pay for the child care. Plus, they're having to work longer hours to make sure that they're taking care of their families on top of the child care tuition," Davis explained.
"It's hurting everybody."
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