The American Rescue Plan, Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020, and the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) of 2021 provided critical support for the child care industry and, by extension, all parents and guardians who rely on it. However much of this funding is expiring at the end of September 2023. Additional long-term funding is needed to increase the wages paid to child care workers, increase the number of child care staff, ensure sufficient child care availability, and reduce the high cost of care for parents who work.

Many families sit on waitlists for years—often joining them before their child has even been born—to ultimately pay tens of thousands of dollars annually once they get a coveted spot. Many other families, particularly in rural areas, never find available and affordable child care in their community. Growing and stabilizing the child care industry will improve the lives of millions of families, children, and care workers. It will also grow the U.S. economy now and in the future.

Child care providers don’t have enough slots to meet demand, resulting in long waitlists and high prices.

Over half of people in the United States (51%) and in New Mexico (53%) live in a child care desert, which can be defined as a census tract where there are either more than 50 children under age 5 but no licensed child care provider or where there are more than three children for every child care slot. One study found that Latino, rural, and low-income families are particularly likely to live in child care deserts. Though this definition does not include license-exempt, home-based, small-group child care (Family, Friend, and Neighbor Care), it reflects the industry’s low supply, which results in long waitlists for families.

The industry’s low supply coincides with its high prices. The Department of Health and Human Services recommends that families’ child care out-of-pocket costs not exceed 7% of their family income, which was the average cost between 1997 and 2011. Using county-level data, the Women’s Bureau at the Department of Labor found that the median price of child care in 2018 ranged from 8% to 19.3% of median family income. More recently, Child Care Aware of America found the average price of child care in 2022 was $10,852—10% of the median income for a married couple and 33% for a single parent. These costs mean that child care takes up even more of the family budget for those with lower incomes.

Before the pandemic, early care and learning prices that include the costs of both child care and paid pre-k were growing faster than overall inflation. Though this trend reversed in 2021 and 2022, prices in this sector are now yet again growing faster than the prices of other items, meaning the cost is increasingly eating up larger shares of family income.

Hard-hit by the pandemic, the child care industry is having a sluggish recovery.

At the start of the pandemic, many child care centers initially closed their doors with the goal of keeping staff and children safe. This meant the child care industry lost over 370,000 workers between February and April 2020. As many centers reopened later and brought back staff, this left the industry still down 40,500 workers as of August 2023, meaning that more than one in 10 of those child care workers still had not returned to the industry. Amid rising wages in other occupations and the overall recovery in the labor market, many suspect these workers