Child Care Cliff Impact: What Parents Need to Know

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Understanding the Child Care Cliff

As parents navigate the start of a new school year, many families are still celebrating another season in the return to “normalcy” after pandemic disruptions to work, school, and social schedules. But opening the first daycare bill this fall covering part-time care for our two children and seeing that it was nearly three times our monthly mortgage, I didn’t exactly feel like celebrating; and we consider ourselves lucky to have even found two daycare spots. 

With the federal funding that helped stabilize child care both during and after the pandemic set to expire by the end of the month, many parents are preparing to face yet another challenging fall as thousands may lose access to child care altogether in what many are referring to as the Child Care Cliff. 

The numbers alone are staggering. In the weeks to come the nation will likely see 3 million children lose access to care when 70,000 child care centers are projected to close, which begs the questions: Will this “Child Care Cliff” create a new normal for parents–one in which child care is both unaffordable and unavailable? Is this the work-life balance we should expect and prepare for?

What Is the Child Care Cliff?

In 2021, the American Rescue Plan Act (ARPA) made federal funding available to many care providers in an attempt to prevent childcare center closures as staff and families navigated COVID regulations for yet another year. Hailey Gibbs, Ph. D., a Senior Policy Analyst for Early Childhood Policy with the Center for American Progress says that for many around the country, the ARPA was a lifeline, but it was meant to be temporary. 

“When that funding goes away, without any additional funding supports, many providers may need to reduce hours of operation, lay off staff, reduce slots, close classrooms, and/or raise prices for parents, who are already too strapped to meet the high and rising cost of care,” Gibbs says.

In addition, Gibbs notes that while many state governments have made efforts to direct state-level funding to providers, that’s not the answer to the childcare crisis, and could in fact complicate the equation even further by deepening structural inequities. Ultimately, she says, “the patchwork of investments we see across states and regions will only exacerbate disparities in access and affordability.”

Though the ARPA was only meant to offer a temporary solution, Gibbs notes that continued federal funding is essential to alleviate the strain caused by childcare deserts––large swaths of the country where formal child care is non-existent. “The analogy that gets frequently used is one of a three-legged stool,” she says. 

“The solvency of the child care sector depends largely on what parents can afford to pay, which, as the average price of child care nationally tops $10k per year, is increasingly out of reach. This is especially true for low-income families, communities of color, rural communities, parents with babies or kids with disabilities, etc.” Gibbs adds that while providers struggle to afford the true cost of care without necessary funds, public funding could do much to support centers and obviate the need for “braided funding sources” like reimbursements, child care subsidies, grants, and contracts. 

“Public funding through a robust, sustained, federal initiative could make up the difference, helping to balance the sector, and alleviating the pressure that providers and parents endure,” she notes. Bryan Jamele, Head of Government Affairs & Public Policy at Care.com says that while impending center closures may feel eerily similar to what many families dealt with during the pandemic, there is an important distinction to keep in mind: parents can make a plan this time.  

“What sets this situation apart from the past is that parents can and should start preparing now, whereas at the pandemic’s onset, the wave of daycare closures caught all parents by surprise and without a proper childcare plan,” he says.

While the ability to create a comprehensive backup plan for child care can allow many families to weather this crisis, the vast majority of parents don’t fully understand the impacts it will have on their particular care situation; and only a third of parents have a backup plan in place, according to a Care.com’s 2023 Childcare Cliff Survey. 

According to the survey’s respondents, while 81% of parents say they’ve heard of the Child Care Cliff, only 21% actually know what it means. For those who don’t have a plan, the next few months could lead to some difficult decisions, as families face limited availability, unaffordable fees, and long wait lists. 

Who Will Be Affected?

While to many the Child Care Cliff may seem like a “them-not-us” problem that only affects families whose child care centers will close, the stark reality is this crisis will have far-reaching ramifications that will affect employers and families alike, and the economy at large.  
“We are all affected by this,” Gibbs notes. “Certainly, children and their families, but also businesses and the broader economy. When parents can’t work, for instance, that has cascading impacts on productivity, economic generativity, and tax revenue.”

Putting a dollar amount on the crisis, Gibbs cites one calculation indicating the US economy loses approximately $122 billion per year in the form of lost earnings, productivity, and revenue as a result of the particular challenges securing infant or toddler care entails. As parents wrestle with how to bridge gaps in care for their children, daycare workers, who Gibbs says are historically “undervalued and vastly underpaid,” now worry that they’ll face a cut in pay or joblessness if their employers are affected by the crisis. Care.com’s 2023 Childcare Cliff Survey also reports that nearly three in four childcare workers are considering leaving the profession altogether and pursuing a new line of work.  
Jamele says that beyond economic repercussions, the Child Care Cliff could have “huge societal repercussions as well.”

“We’ve been seeing reports of women returning to the workforce at record numbers, but what happened last time America faced daycare closures and hiked up rates? Millions of women had to leave the workforce in order to take care of their kids, stunting the phenomenal progress that had been made pre-pandemic. And yet, here we are at risk of repeating the same mistake.” And while this care crisis will disproportionately affect women, Jamele notes single mothers and women of color will be hit the hardest. 
“Single moms . . . don’t have the freedom to leave their job,” he says, pointing out that the most recent census data reveals four in five single-parent households are headed by women. 
“Without adequate support from the government and their employers, many single mothers are thrust into poverty trying to keep up with the cost of living, including care for their children while they are working. In fact, according to the National Women’s Law Center, the official poverty rate for single-mother families in 2021 was 31.3%. Plus, when looking at single-parent households headed by women of color, this rate is even higher for Native American (about 43%), Black (about 37%), and Hispanic (about 36%) families.”

Invisible Labor Will Increase, Disproportionately Affecting Mothers

Nicole Mowbray, Psy.D., a licensed clinical psychologist with Momwell who’s been working with families for a decade, says another outcome we’re already seeing as a result of the Child Care Cliff is an increase in invisible labor for mothers. 
“I frequently work with couples on the invisible labor in the household and rebalancing domestic tasks to create a more equitable homelife,” Mowbray shares. “The invisible labor of finding child care, visiting, interviewing, and prepping children for changes is almost like another full-time job…”


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