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Over a year after child-care centers reopened, families are still struggling

CNBC logoCNBC 3 days ago Megan Leonhardt
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Over a year after daycares, preschools and child-care centers started reopening, U.S. parents and providers are still struggling to find a new normal. 

For Seattle-based Patty Liu, that means continuing her job hunt. Liu, a 38-year-old mother of two boys, has spent the last 15 months unemployed. Liu had started a new job at an environmental consulting firm in January 2020, but it didn't last long. In March, her child-care provider temporarily shut down and two weeks later, she was let go while trying to juggle working full-time and caring for her sons. 

When she was laid off, Liu became a full-time caregiver, which turned out to be an entirely new challenge. 

By fall 2020, Liu's child-care options had expanded. Her eldest son went back to preschool full-time and she enrolled her youngest in daycare three days a week. "We were down in income, so we couldn't actually afford full-time care, but mentally, I needed a break," Liu says.

She also needed the time to continue her job search, write cover letters, submit resumes and schedule interviews. She has been consistently looking for a new job since. "Even with the kids back in school, I just really felt like I didn't have enough time to do everything," Liu says.

She's hopeful that she'll find something soon, especially since she expects schools to be full-time this fall. But if they're not, that could mean continuing to put her career plans on hold.

Liu is just one of the millions of parents whose child-care options have been affected by the pandemic. Overall, child care has become more scarce and more expensive since the pandemic started, which is wreaking havoc on families' finances and parents' career ambitions.

Here's a look at what's happening and the current solutions on the table. 

Child-care costs have increased during the pandemic

Although Liu and her husband, Alex Salkin, are down to a single income, the couple was able to catch a break on child-care costs. 

The family's monthly child-care bill actually dropped during the pandemic, in part because her children only returned part-time, but also because her youngest son moved out of infant care, which is more expensive. Liu and her husband used to pay $2,500 a month for full-time child care five days a week, but now they pay $1,720. 

Other families haven't been so lucky. Across the country, 72% of families report paying more for child care now than before the pandemic, according to a Care.com survey of more than 3,000 U.S. parents who are all paying for professional child care for children under the age of 15. Daycare costs alone increased 87% during the pandemic, according to Care.com estimates based on September 2020 cost data from the Center for American Progress

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And the vast majority of parents who are paying for child care are spending big. About 85% of parents surveyed say they spend 10% or more of their household income on child care. The Department of Health and Human Services categorizes child care as "affordable" when families spend less than 7% of their household income on it. 

Like Liu, many parents have employed cost-saving measures during the pandemic to bring down child-care costs — typically at the expense of their jobs. About 42% of parents surveyed by Care.com reported reducing hours at work, while 26% changed jobs and more than a quarter, 26%, left the workforce completely

It's a difficult situation that experts predicted could happen due to a combination of factors, including higher operating costs among child-care providers, higher expenses for parents and increased scarcity since some child-care centers closed permanently. 

What this means for families

These rising costs and scarcity mean that for some families, professional child care is not an option anymore. In fact, 46% of parents surveyed by Care.com say it's now more difficult to find child care at all, which has led to many parents staying at home to care for their kids. 

Around 7.6 million Americans say the main reason they're still unemployed is because they are caring for children not in school or daycare, according to Household Pulse survey data from the U.S. Census Bureau for the week ending June 7.

Separately, and unrelated to employment, about 5.5 million Americans reported their children were unable to attend daycare or another child-care arrangement during May because of the coronavirus pandemic, the Census Bureau found. That lack of child care directly affected parents' ability to work, with about 1 in 4 taking unpaid time off, using vacation days or cutting work hours to care for their children.

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"We still have a lot of folks really struggling to find child care, we have lots of folks that have left the workforce because of child care," says Nina Perez, the early childhood national campaign director at parental advocacy group, MomsRising.

While Congress allocated more than $50 billion dollars to the child-care industry since the start of the pandemic — $40 billion alone in the American Rescue Plan passed in March — a lot of that money hasn't been distributed yet, Perez says. 

Recent reports indicate that states may not have the staff or infrastructure to distribute those funds rapidly or equitably, which may mean many child-care providers opt to remain closed or at limited capacity until that funding comes through. 

As of December 2020, 10% of daycare centers and family child-care providers remained closed, according to the latest available data from Child Care Aware. And the number of daycare employees is still down about 13% as of May compared to the start of the pandemic, according to the St. Louis Fed

That puts parents in a tough spot, especially since many states have already halted the enhanced federal $300 unemployment benefits, Perez says. And while many parents have the advanced child tax credit payments coming, some families may have to find new providers as they head back into the office full-time because their previous providers remain closed or at limited capacity, she adds.  

"It's really critical that we continue to provide a lifeline to families, to basically be able to weather the storm even as things reopen," Perez says. "It's not a light switch, it's not something that all of a sudden families now can just continue going like they were before."

More support is needed

Many parents and providers continue to struggle as they wait for help. Beyond emergency relief, Perez says the U.S. needs to make fundamental changes to the child-care system. She supports several of the proposals President Joe Biden outlined in his American Families Plan, including universal pre-K, caps on family child-care expenditures and increasing wages for child-care workers.

Biden's $1.8 trillion proposal, however, hasn't received much traction in Congress yet, largely due to the hefty price tag. There are also concerns about unintended consequences of Biden's plan, including the fact that it would increase the nation's debt substantially, according to Rachel Greszler, a Brookings research fellow, and Carrie Lukas, president of the Independent Women's Forum.

Not all of the support needs to come from the government — employers can also help. Working mothers are about 32% less likely to leave their job if they have access to flexible, remote work arrangements, a recent survey from Catalyst found.

Many Americans want to see change happen: More than 6 out of 10 support increasing child-care availability; instating free, universal pre-kindergarten; and providing child-care assistance to middle-class families, according to a June poll of more than 3,000 voters and likely voters sponsored by Community Change Action and conducted by Lake Research Partners. 

"Most parents have had at least days — if not much longer stretches — when it was tiring or hard to be both professionally successful and a parent. I am no exception, and I have memories of things like giving a speech while my infant ate Cheerios at my foot," Rep. Katie Porter, D-Calif., tells CNBC Make It. 

She believes parents and policymakers need to start thinking about child-care benefits and paid family leave as "universal benefits." "We're not debating providing better child-care support just for people with kids — we're doing it for our economy," Porter says. 

"If we don't invest in these things, it will hold back our economy. And to be clear, it has been holding back our economy for decades," she adds. "Who out there doesn't want our country to have a strong, stable economy that's globally competitive? To do that, we have to make some investments in people who do the work and that includes women and parents and others who care for children."

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