You would think with all the money parents have to pay for child care — it can easily add up to or even surpass the cost of a monthly mortgage payment — that the child care industry would be a lucrative career field for the people who work in it.
But it’s not.
In fact, at the same time, parents are finding it hard to afford — much less, find — good child care, many of those providers are wondering how long they might be able to make it.
It’s especially true of the licensed, in-home providers, which are rapidly declining in number every single year. And with the federal support that helped get child care providers through the pandemic about to end, it could serve another blow to a floundering industry.
In the special series, “Child Care at a Crossroads,” WTOP is taking a look at the state of child care now, and what the future holds once billions of dollars in aid that has propped up the child care industry since the pandemic expires. If you thought options were limited and unaffordable now, the situation could get even worse in the coming months and years.
‘The margins are razor thin’
Perhaps the easiest way to understand the child care shortage in Maryland is to look at the numbers.
In 2017, there were about 6,000 in-home child care providers in the state of Maryland. By 2026, that number is expected to be cut in half.
“Pay is a significant factor,” said Laura Weeldreyer, the executive director of the Maryland Family Network. Under state law, licensed providers must maintain an 8:1 ratio of kids to adults. “It’s a very challenging business model to make work. The margins are razor thin.”
It’s a problem that isn’t just unique to Maryland either.
“Child care has been a broken market for a long time,” said Laura Valle Gutierrez, a fellow at the Century Foundation and the co-author of a report on the child care industry published earlier this year. “There’s been a persistent problem of high prices for families, low wages for early educators and just not enough child care spots and programs for the demand that there is.”
Pandemic impact
The headaches surrounding child care — and the struggles faced by those in the field — were already big problems. Then came COVID-19.
“The pandemic really made all of this worse and pushed the sector to the edge,” Weeldreyer noted.
During the pandemic, parents worked from home, and child care facilities had to shut down.
“But when child care is closed, providers don’t get paid,” Weeldreyer said. Then other industries started hiring, with many offering far more than what child care providers typically earn.
“We’re moving toward a $15 minimum wage in Maryland,” added Weeldreyer. “I think family child care is probably way behind that right now. And no benefits, no health insurance, no paid time off, no retirement plan — unless women have been really entrepreneurial and set it up for themselves.”
A common trend is that many women who ran in-home facilities when their kids were younger sought other employment later.
And while the number of center-based care has actually gone up in recent years, it hasn’t matched the pace of decline in home-based care. That’s also the predominant form of child care available in the more rural parts of Maryland.
As expensive as college tuition
Center-based care is also more expensive. In fact, in every Maryland county, child care is either the first or second-ranked major household expense every month.
In Montgomery County, it’s estimated parents pay close to $36,000 a year.
The child care platform TOOTRiS says child care in Arlington, Virginia, on average, comes out to nearly $800 a week.
Both Maryland and Virginia rank seventh and 10th respectively nationwide when it comes to the cost of child care, preschool, infant care and day care. D.C. is at the top of that list.
“In 38 states, infant and toddler care is actually more expensive than the state university system costs to attend,” said Weeldreyer. “So the economics do not work the way they do in other fields, where you just simply pass the cost on to the consumer. Parents are already strapped for cash.”
Billions in lost earnings
From there, the concern becomes kids going to unlicensed facilities.
“People have got to work,” said Weeldreyer. “So make no mistake, their kids are going to be watched somewhere. And when you have families who are forced into using unregulated care, that means people haven’t had background checks, people haven’t had training in first aid and CPR.”
The other alternative is that parents stop working. Though when federal child care stabilization subsidies run out on Oct. 1 and some providers have to start raising the rates they charge parents, many parents might not have a choice.
“We estimate that parents will lose $9 billion a year in lost earnings,” Gutierrez said. “This number comes from both parents having to maybe cut back on their work hours, because maybe their program can’t have them every day, or there’s going to be disruptions in child care or it could be parents ultimately choosing to leave the workforce entirely. We also know that this impacts businesses.”
The Century Foundation report found that most states will lose $10.6 billion in economic activity a year due to child-care-related disruptions to the workforce, the high cost of turnover and lost income tax revenue.
“So there are going to be those broader economic disruptions,” said Gutierrez.
Overall, 232,000 child care providers around the country could leave that industry. And while it might sound dire in Maryland, the problem could be even worse in Virginia and the District. Both jurisdictions could see the number of licensed programs cut in half, or more, according to the report.
In Part Two of “Child Care at a Crossroads”: WTOP talks with child care providers. We’ll also hear from parents wait-listed for child care in their community as they try to balance working and parenting. Read part two here.
