US economy

One in six jobs lost: the effect of the pandemic on childcare providers

Carolyn Todd and her two sisters didn’t enter the childcare business for the money – when they opened in 1995 their hope was to give low-income parents in Senatobia, Mississippi, a place to get high-quality, affordable care.

It’s never been easy – but 2020 brought new challenges as attendance numbers dropped, strict new safety requirements were introduced and the families they served bore the brunt of the economic recession

“You have to rethink and reorganize everything to make it work,” said Todd, who added that Enchanted Days Learning Center has only survived because of a temporary change in state funding.

Others have been hit even harder. Since the pandemic struck, thousands of childcare providers across the country have collapsed under the strain. One in six childcare jobs has been lost since the start of the pandemic, according to a January report by the Bureau of Labor Statistics.

The impact has been felt across the country as parents have missed, or left, work for childcare demands or are unable to return to work after being laid off because of childcare responsibilities. In the past year, nearly 700,000 parents of children under five – over half of them women – have dropped out of the workforce, according to an analysis by the Center for American Progress.

Melissa Boteach, vice-president of income security and childcare at the National Women’s Law Center (NWLC), said: “When the economy reopens, we’re going to have lost a big chunk of our childcare supply. People are going to be trying to go back to work and there will be nowhere to put their children.”

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Aaron Rainboth, a teacher at Frederickson KinderCare in Tacoma, Washington, wears a mask while playing outdoors with a child.
Aaron Rainboth, a teacher at Frederickson KinderCare in Tacoma, Washington, wears a mask while playing outdoors with a child. Photograph: Ted S Warren/AP

President Joe Biden is likely to sign a relief bill this week which includes $24bn to help childcare providers, $15bn in childcare assistance for families and an expansion of the child tax credit. This is on top of $10bn directed to childcare in earlier relief packages.

Together, these sums represent the minimum some economists say is needed.

“No one is getting rich off of childcare – parents can’t afford it and providers are making too little because the business model doesn’t work,” Boteach said. “Childcare is a public good, it’s education, but we treat it like it’s everybody’s private responsibility.”

A key issue for the centers which have remained open is a drop in attendance, and therefore income, because of the recession and public health emergency.

In Mississippi, Todd said her center reduced its capacity from a maximum of 90 children to 50 children because of safety regulations. Some days, as few as 20 children show up.

This would have normally forced the center to close – the government provides reimbursements based on how many children show up for care, not how many are enrolled – but the reimbursement rule was waived during the pandemic.

“There is no doubt in my mind that if they had not done that, we would not still be here,” Todd said.

Todd said besides the financial threats during the pandemic, trying to keep children and staff safe has been an emotional challenge. And because of Covid-19, parents aren’t allowed in the building, making it more difficult to create the family-like environment the center prides itself on.

“We have been seen as essential to this economy, but I don’t feel that we were treated that way before Covid,” said Todd. “But I think people are opening their eyes to the real need of childcare and what we have to offer and what we do for families and to keep this economy going.”

The Mississippi Low-Income Child Care Initiative (MLICCI) advocates for centers like Todd’s, which are mostly run by women and serve mostly single mothers. Carol Burnett, MLICCI’s executive director, said childcare providers are crucial at a time like this because of their role as de facto community centers, providing information to parents about jobs, food benefits and, these days, Covid testing and vaccinations.

“A lot of childcare centers were trying to connect parents to Covid relief or food pantries or offering places for kids to be if they needed to be supervised while doing remote learning at school,” Burnett said.

Alena Kleinman cleans a tricycle at Frederickson KinderCare in Tacoma, Washington.
Alena Kleinman cleans a tricycle at Frederickson KinderCare in Tacoma, Washington. Photograph: Ted S Warren/AP

Despite the central role childcare providers play in communities, the US entered the pandemic with its care infrastructure crippled. Childcare workers were paid on average $12 an hour and in more than half of the country, the demand for childcare was greater than the supply, known as a childcare desert. This was especially true in rural areas.

These trends have had an outsized impact on women, who are 90% of childcare workers. The 90% is disproportionately women of color and immigrant women: two groups who have also suffered disproportionate job losses in this recession.

Women working outside the sector also depend on its stability for their own livelihoods. In February, 40% of women surveyed told the Institute for Women’s Policy Research they stopped working or reduced their hours because of childcare demands.

Jerome Powell, the chairman of the Federal Reserve, acknowledged the significance of stabilizing childcare to get women back to work in a financial services committee hearing in late February.

“Many other countries, our peers, our competitors, advanced economy democracies have a more built-up function for childcare, and they wind up having substantially higher labor force participation among women,” Powell said. “We used to lead the world in female labor force participation a quarter-century ago and we no longer do. It may just be that those policies have put us behind.”

It’s statements like these which have led some childcare providers to feel that finally the public and lawmakers are alert to the central role they play in the economy.

Heather Schmidt, who runs a childcare business from her home in rural Broken Bow, Nebraska, said her business has been kept alive by the increase in grants and outreach by state and local advocates. “Without all those supports I don’t know what would’ve happened,” Schmidt said.

Nebraska’s legislative body released a study last month showing that 231 licensed childcare providers had closed permanently during the pandemic and 51% said they would probably or definitely have to close without more financial assistance.

The committee which oversaw the study is now examining how to fully fund the system.

Schmidt said: “It [the pandemic] kind of brought awareness to how fragile the childcare system is and just raising awareness of how little family childcare providers make and how essential we are to the economic infrastructure of our communities.”


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