A wave of child care center closures is coming

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In Hopewell, Virginia, about 20 miles southeast of Richmond, Juanterria Browne spends her days providing child care for children with disabilities, a demographic for which it is notoriously difficult to find care. Browne, who opened Kidz with Goals Unlimited, LLC, in early 2020, was hit hard by the pandemic. Parents pulled their children out of care, leaving Browne, a nurse and mother of three, with nearly $15,000 in unpaid tuition bills. She borrowed money from her parents and paid herself a salary of just $500 that year, so she could continue to provide meals for the children in her care, afford rent and utilities for the center and make payroll for her employees. Even that wasn’t enough. Browne also started working night shifts at a nearby hospital, often going to her second job after spending all day at her center.   

Then, in 2021, the American Rescue Plan Act was signed into law and $39 billion was sent to states to help stabilize the child care industry. Browne received a welcome influx of funds: nearly $83,000 to help keep her business open. Browne used the money to wipe out the debt owed to her by families who struggled to pay after losing their jobs and then had to pull their children out of care completely. She raised staff pay from $10 an hour to $15-$18 an hour. She gave herself a salary of $34,000, which allowed her to quit her night job and work full time at the center. She also used funds to upgrade her playground equipment, buy cleaning supplies and provide a scholarship to a family that was struggling to make ends meet.   

Nationwide, ARPA funds helped steady a rocky industry that has historically been marked by poverty-level wages for educators and high staff turnover.  

“Child care, as a field and industry, was already in crisis before the pandemic,” said Michelle Kang, chief executive officer for the National Association for the Education of Young Children. “The pandemic laid bare some of the challenges that already existed.” 

While other countries provide support to sustain the operations of child care programs, the United States historically does not. The federal pandemic stabilization funds provided a rare infusion of operating money, a move reminiscent of when the federal government briefly funded child care to support working parents during World War II. 

Since the pandemic, nearly 16,000 early childhood programs have shuttered. Between January 2020 and January 2022, around 120,000 child care workers left the industry, many for higher paying jobs, leading to immense staffing shortages and soaring waiting lists for parents who were unable to return to work full-time due to a lack of care. Educators and experts say the federal relief aid prevented the situation from getting worse. Those funds helped keep more than 200,000 early childhood programs open and more than 1 million early childhood educators employed, thus allowing more than 9.5 million children to receive care.  

When the federal stabilization funds run out at the end of September and child care providers can no longer rely on this much-needed funding, experts say the consequences could be immense. A recent report by The Century Foundation, a progressive think tank, found an estimated 3.2 million children will eventually lose child care if those federal funds are not replaced.  

That loss will hit especially hard in Virginia, where Browne works, as well as in a handful of other states, including Arkansas and West Virginia. It’s estimated that up to half of all licensed programs in those states could close. “Providers are going to do everything they can to hang on,” said Julie Kashen, director of women’s economic justice and a senior fellow at The Century Foundation. “We saw during the pandemic, they went into personal debt, they stopped paying themselves a salary, they’re going to do whatever they can because they know how important their jobs are for supporting children and parents.” 

Experts warn that programs will be forced to make cuts or shut down. “Millions of parents will be impacted and some will have to leave the workforce,” Kashen added. “It matters to children, it matters to their families and it has ripple effects beyond that to the economy and states and employers.”  

The effect of losing the funds could be even more grim for family child care providers, whose programs are typically smaller than center-based care and rely mostly on parent tuition payments. 

“Most of the family child care educators that we work with are not in a position to raise their prices because their parents just can’t pay,” said Jessica Sager, co-founder and chief executive officer of All Our Kin, an organization that focuses on supporting family child care providers. In the years leading up to the pandemic, these programs were already struggling, with 97,000 closing between 2005 and 2017. “We’re going to lose more programs,” Sager said. “That’s a pretty dire situation to be in.” Ultimately, parents will have fewer choices for child care, she added. “These family child care programs are especially important for infants and toddlers and families working evenings and weekends. They’re going to be especially hard hit in terms of the choices available.” 

In Virginia, Browne has already stopped receiving the federal stabilization funds, which means she will now go back to relying on parent tuition and state funding that only covers part of the cost for low-income children to attend child care, as well as any private or public grants and donations she can find. Nearly half of the children she enrolls are from low-income families who pay with state subsidies. But, as is the case nationwide, the reimbursement amount Browne gets per child is far less than the cost of providing care. She recently started working 12-hour nursing shifts at night again, driving straight to her center in the morning to check on her staff and the children before going home to sleep for a few hours. “It’s hard,” Browne said. “My body is not going to be able to take much more of working two full-time jobs.”  

By the end of the year, Browne would like to be able to offer benefits to her staff. She is planning to open a second center this fall and hopes to earn enough from the two centers to quit her hospital job for good. Many experts and early childhood advocates say the success of programs like Browne’s, however, depends on more federal support. Congress has yet to take up legislation to allocate the needed funds to the child care industry, even though several lawmakers and the director of the United States Office of Management and Budget have called on Congress to act and voters have showed strong support for the idea in past polls. 

“During the pandemic, for this brief moment, we rallied,” Sager said. “We did all these things to make programs sustainable. Now we’re taking that money away, but conditions have not fundamentally changed. The end of this funding really feels to our educators like they are no longer essential. Like they and the families in their care are being abandoned.” 

In this 2020 article, I profiled a child care provider near Austin, Texas, to show the intricacies and difficulties of running a child care program. 

In this 2020 article, Lillian Mongeau and I looked at why federal investment is often heralded as the answer to child care woes. 

Women spend 52 minutes per day on average caring for children and other family members, compared to 26 minutes per day for men, according to an analysis published by the National Partnership for Women & Families and reported on by Bloomberg. If women were compensated for this work at the average rate for child-care workers, they would make an additional $627 billion per year overall, or an extra $4,600 per year each. 

“Why child care prices are rising at nearly twice the overall inflation rate,” The Wall Street Journal 

“Army expands child care options for reserve soldiers and families,” U.S. Army 

“Finland mom gives a glimpse into Finnish daycare vs. American daycare,” Scary Mommy 

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