Sep 25 2020

JEC Releases First Congressional Report on the Impact of the Coronavirus Pandemic on the U.S. Child Care Industry

The lack of child care has become one of the key factors holding back the U.S recovery.

Washington, D.C.—Today, Congressman Don Beyer (D-VA), Vice Chair of the U.S. Congress Joint Economic Committee (JEC), released a new report showing how the coronavirus pandemic has devastated child care providers in a way that could permanently damage the industry—making child care even less accessible and affordable to American parents and their children.

Before the pandemic, nearly 12 million American children age five and younger were in some form of child care in the United States. However, since the pandemic, about half of child care providers have been forced to shut down at some point and about 1 in 5 child care workers have been left without a job, cutting off this essential service to millions of American families. Even at child care providers that are open, enrollment is down 67 percent according to a survey by the National Association for the Education of Young Children.

The report finds that one of the key factors holding back the U.S. recovery is that more parents, particularly mothers, are having to choose between going to work and ensuring their children have safe, quality care. According to a recent poll, 13 percent of parents have been forced to reduce hours or quit their jobs because of problems with child care, losing a full day of work per week on average.

Additional findings included in the report are:

  • The United States invests less than half as much as European countries in child care, as a percentage of GDP, ranking third from the bottom of the 37 OECD countries.
  • Parents in the United States who have children in child care spend on average 23 percent of their net income to pay for it. In many states, parents spend more on child care than they would on a college education.
  • In 2018, more than 50 percent of American families with young children lived in “child care deserts”—areas where the demand for licensed child care far outpaced the local supply. This is particularly true for middle-income families who make too much to qualify for child care subsidies and not enough to pay for child care without such support.
  • As of August, approximately 214,000 child care workers—one-fifth of the pre-pandemic level—are still out of a job. In addition, more than four-fifths of child care providers report that if they don’t receive additional public assistance they expect to close permanently.
  • Since child care is a direct service, providers can’t cut costs like other businesses do by outsourcing services or entire jobs or replacing them with technology. In addition, necessary state laws requiring specific staff-to-child ratios and indoor and outdoor space ratios further limit providers’ ability to cut costs. 
  • Accessible, affordable child care is critical to the economy because it makes it more equitable—by allowing parents, particularly those who are mothers, single, and/or low-income, to work—and contributes to economic growth by increasing productivity and improving the life chances of children, especially those who are disadvantaged.

Vice Chair Beyer (D-VA):

“I know firsthand that parenting requires you to wear many hats, and I cannot imagine adding ‘school teacher’ and ‘child care provider’ to the list during a global pandemic.

“Workers cannot get back to work if there is nowhere to send their children. This is particularly true for working mothers who are more likely to bear the brunt of closed schools and child care providers. In fact, because of the impact that the coronavirus has had on the child care industry, a generation of social and economic gains made by women may be rolled back in a matter of months! Many working mothers have had to cut back their hours or quit their jobs altogether, which will have lasting, long-term impacts on their careers, lifetime earnings and ability to retire.

“Our nation should treat child care like most other developed countries do—like a public good, not a private benefit. Doing so would mean doubling our investment in child care, so parents do not have to choose between going to work and ensuring their children have safe, quality care.”

Senator Patty Murray (D-WA), Ranking Member of the U.S. Senate Committee on Health, Education, Labor and Pensions and the Senate Sponsor of the Child Care is Essential Act (S.3874):

“If we’re serious about ensuring families can get back to work, we absolutely cannot overlook the critical role of child care. We have long had a child care crisis in this country—but right now, as our economy is rocked by the impact of the coronavirus, our child care sector is struggling to even keep its doors open. If the federal government doesn’t step up, we could lose an estimated 4.5 million child care slots, and leave parents without the child care they need to return to work once the economy opens. Congress must pass the Child Care is Essential Act to provide critical support to ensure providers can safely reopen and operate, and help working families—especially Black families, and other families of color—afford the child care they need.”

Representative Robert C. “Bobby” Scott (D-VA), Chair of the House Committee on Education and Labor:

“Families were struggling to find affordable child care long before the COVID-19 pandemic. Now, the child care industry is on the brink of collapse. This report illustrates the need for an immediate and significant investment to keep child care providers open and cut costs for families. Without a strong child care system, parents cannot return to work, businesses cannot reopen, and children lose invaluable learning opportunities in their early years. Congress must pass a comprehensive coronavirus relief package that includes robust child care funding to support children, families, and the healthy development of our economy.”

Representative Rosa DeLauro (D-CT), Chair of the Labor, Health and Human Services, Education, and Related Agencies Appropriations Subcommittee, Co-Chair of the Congressional Baby Caucus and the House Sponsor of the Child Care is Essential Act (H.R. 7027):

“Time and again child care has been last in line, when it needs to be at the front. We have helped to bailout other sectors, and child care should be no different. We know that without emergency funding to save the child care sector, families will be unable to return to work, as the report illustrates. Lack of affordable child care was an obstacle many families faced prior to the pandemic, so going back to normal is not an option. We need to ensure we have high-quality, affordable providers to see families through the pandemic and beyond. I am so proud that my Child Care Is Essential Act passed the House by an overwhelming bipartisan vote, and it is imperative that the Senate takes this bill up immediately. We all want to do right by our children, let’s make sure they can be taken care of in a safe environment, so their parents can also get back to work.”

Chad Dunkley, CEO of New Horizon Academy, a Child Care and Early Education Provider:

“We must use the current crisis to reimagine child care in our country—this pandemic laid bare the critical role it plays in our economy and the lives of working families. This is work you can’t outsource, and it’s highly labor-intensive. The argument shouldn’t be about making child care cheaper, but about investing in it as a foundational support for the economy of today and tomorrow. Financial support is needed now to ensure child care survives the current crisis. Then we need broad, systemic change so parents and providers aren’t continually left to piece this puzzle together on their own.”

More Information About the Economic Impact of Child Care

Childcare is critical to the nation’s economy.

The child care industry produced over $50 billion in total revenue in 2017, with employer firms accounting for 83 percent of the revenue ($42 billion). However, as in any sector of the economy, the value of the child care industry is more than the sum of its parts—that is, the value the industry adds to the economy is more than its revenue. Child care industry spending spills over to other sectors through consumer spending by child care workers, as well as purchases of goods and services by child care providers to support the direct operations of their facilities.

In addition, there is a significant body of research demonstrating that investments in early education pay off across children’s lifetimes, especially when those investments are targeted toward disadvantaged children. This is because such investments help to increase high school graduation and college attendance, decrease crime, prevent teenage births, reduce the need for special education and lower the share of students forced to repeat a grade.

Economists at the Minneapolis Federal Reserve have shown that investments in early education are “the most efficient means to boost the productivity of the workforce 15 to 20 years down the road.” Their cost-benefit analyses of multiple early education interventions showed annual rates of return, adjusted for inflation, ranging between 7 percent to over 20 percent, or $3 to $17 per dollar invested.

About Congressman Beyer

Congressman Don Beyer is currently serving his third term in the U.S. House of Representatives, representing Northern Virginia suburbs of the nation’s capital. In addition to his role as Vice Chair of the JEC, Beyer serves on the House Committee on Ways and Means and the House Committee on Science, Space and Technology. Previously, Beyer served as the Lieutenant Governor of Virginia and Ambassador to Switzerland, and built a successful family business over the course of four decades.

About the U.S. Congress Joint Economic Committee

The U.S. Congress Joint Economic Committee is Congress’s bicameral economic think tank. It was created when Congress passed the Employment Act of 1946. Under this Act, Congress established two advisory panels: the President's Council of Economic Advisers (CEA) and the JEC. Their primary tasks are to review economic conditions and to recommend improvements in economic policy. Chairmanship of the JEC alternates between the Senate and House every Congress. Currently, Senator Mike Lee (R-UT) is the Chair and Congressman Don Beyer (D-VA) is Vice Chair.