"Child Care and the American Workforce: Removing Barriers to Economic Growth”

House Subcommittee on Early Childhood, Elementary, and Secondary Education

2025-06-24

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Source: Congress.gov

Summary

This meeting of the Subcommittee on Early Childhood, Elementary, and Secondary Education focused on the critical challenges of childcare affordability and access in the United States, acknowledging its profound impact on working families and the national economy. Members and witnesses highlighted the unsustainable costs of care, the shortage of available slots, and the struggles faced by the childcare workforce, emphasizing the need for comprehensive solutions involving public-private partnerships and federal investment [ 00:14:36-00:14:51 ] .

Themes

Childcare Affordability and Access Crisis

The cost of childcare is exceedingly expensive and continues to climb, with national averages exceeding $10,000 to $13,000 annually per child, often surpassing housing costs or in-state college tuition in many states [ 00:14:40-00:15:09 ] . This high cost forces families to make difficult choices, sometimes leading parents, particularly mothers, to leave the workforce, which negatively impacts their financial stability and broader economic productivity [ 00:17:02-00:17:08 ]

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. Concurrently, there is a significant lack of childcare supply, with an estimated 31.2% national gap in available slots, particularly for infants, toddlers, during non-traditional hours, and in rural areas, creating "childcare deserts" [ 00:15:27-00:15:33 ]

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[ 00:21:25 ]

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. This broken market is a foundational economic issue, costing the U.S. economy an estimated $120-122 billion annually in lost earnings, productivity, and revenue .

Childcare Workforce Challenges

Despite the high cost of childcare for families, care providers often operate on thin margins and struggle to retain staff due to low wages and limited benefits . The early care and education workforce is predominantly composed of women, often women of color, many of whom earn poverty-level wages, and some cannot even afford childcare for their own children . This compensation disparity, with childcare workers earning significantly less than kindergarten teachers, makes it difficult to recruit and retain qualified staff, exacerbating the supply shortage [ 01:10:56 ]

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. Cuts to public assistance programs like Medicaid and SNAP are seen as dangerous, as many childcare workers rely on these to make ends meet, and their loss could further deplete the workforce and reduce childcare supply [ 01:11:43 ]

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Role of Federal Programs and Policies

The Child Care and Development Block Grant (CCDBG) is recognized as a crucial federal program that helps low-income working families access affordable care, supporting parental choice and workforce participation [ 00:15:38-00:15:43 ]

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. However, the program, last updated over a decade ago, needs modernization to meet current family needs and address issues like income eligibility thresholds that may disincentivize workforce participation [ 00:43:46 ]

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[ 00:42:09 ]

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. Head Start is also highlighted as a successful program, serving millions and providing vital early childhood education and wraparound services, and any cuts to it would have devastating consequences, immediately expanding the childcare crisis . Recent federal actions, such as the 2024 rule updating CCDF regulations to cap family copayments, improve provider payments, and streamline eligibility, are seen as vital for stabilizing operations and increasing accessibility, with any repeal posing a "tragic mistake" [ 01:33:41 ]

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. While some advocate for public-private partnerships, others argue that significant new federal and state investments are required to solve the crisis, as the private market alone cannot address the problem [ 00:17:46 ]

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Parental Choice and Diverse Care Options

A strong emphasis was placed on the importance of parental choice in childcare, acknowledging that families have diverse needs based on geography, schedule, culture, and income [ 00:15:43 ]

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. The current "mixed delivery system" includes center-based care, home-based providers, and faith-based providers, and federal policy should support these multiple options without limiting parental decision-making . While federal programs like CCDBG are designed to be inclusive of various provider types, concerns were raised about policies, such as the expansion of universal pre-K in some states, that could limit choice by favoring public school settings over existing diverse community providers . Family childcare, though often less expensive, is supported due to its smaller setting, but it also faces challenges related to inadequate compensation for providers .

Community-Led Solutions and Innovation

Local communities and governments are actively seeking and implementing innovative solutions to address childcare challenges, often through public-private partnerships [ 00:17:51 ]

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[ 00:18:00 ]

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. Crawfordsville, Indiana, was highlighted as a successful model where the mayor, through a collaborative task force and the Montgomery County Early Childhood Coalition, engaged businesses, philanthropy, and local government to create an early learning center and other initiatives . This model emphasizes data-driven, community-led, and collaborative approaches to address accessibility, affordability, quality, and provider support, demonstrating that solutions require a combination of efforts from all sectors . Such local innovations require flexibility and an environment that fosters new solutions, rather than rigid federal mandates, to effectively tackle the unique challenges of different communities, especially rural ones .

Tone of the Meeting

The tone of the meeting was largely collaborative and concerned, reflecting a shared understanding across the aisle of the severity of the childcare crisis [ 00:52:24 ]

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. While there was bipartisan agreement on the problem, differing views emerged regarding the most effective solutions, particularly concerning the extent of federal investment versus local innovation and market-based approaches [ 01:02:46-01:02:57 ]

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. There was a general appreciation for the witnesses' expertise and experience [ 00:20:57 ]

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[ 01:02:42 ]

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. Despite some partisan critiques regarding specific policies or budget proposals , the overall sentiment expressed by the committee chairman and ranking member was a commitment to finding bipartisan solutions to support families, workers, and the economy [ 01:58:45-01:58:54 ]

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Participants

Transcript

Good morning.  The Subcommittee on Early Childhood, Elementary, and Secondary Education will come to order.  I note that a quorum is present.  Without objection, the chair is authorized to call a recess at any time.  Child care is essential to helping working parents thrive and our local economies grow.  At the same time, child care can be exceedingly expensive, and the cost is only climbing.   According to a 2024 data analysis by Child Care Aware of America, my home state of California has the third highest cost of infant care in the country, $22,628 annually for center-based care.   U.S.  Department of Labor data from 2022 demonstrates that families spend between 8.9 and 16 percent of their median income on full day care for one child.  One analysis of 2024 costs found the national average price of care to be $13,128.  I think most parents would agree this is simply unsustainable.   And while cost is one obstacle, so is access.  Using 2019 data, the Bipartisan Policy Center calculated the first known estimate of the national gap in childcare.  That is, roughly 11 million children needed childcare, but the national supply only created 7.8 million slots, creating a 31.2% childcare gap.   The Child Care and Development Block Grant is the federal program governing child care programs for low income working families.  The Block Grant program exists to help working families access affordable child care, giving them the freedom to remain in the workforce and increase their economic opportunity, one solution to the problem of child care affordability and access.   Choice is a pillar of the program, giving parents the freedom to make both lifestyle and economic decisions that best meet their individual family's needs.  When choice is limited, either circumstantially through a lack of childcare slots as rural areas disproportionately feel, or because grants and contracts are given priority over family decision-making, those families and our economy suffer.
Worker support is another pillar of the Block Grant program with multifaceted economic benefit.  Childcare helps parents remain in the workforce, which meets the needs of American industry in light of a national workforce participation rate that is currently just 62.4%, according to the Bureau of Labor Statistics.   But the work requirements of the Block Grant Program also help parents and families grow their economic opportunity and realize financial freedom, often helping low-income families move beyond the need for a federal safety net and thrive independent of government support.  Together, families, businesses, and our communities see boosted economic growth as a result.  The Block Grant Program is a great support for those least likely to access and afford childcare, but it alone cannot solve the problem most parents in America feel.   As I mentioned earlier, childcare can be very expensive to provide, plain and simple.  The high standards in health, safety, and caregiver to child ratios are necessary to provide for the needs of our children and give parents peace of mind, but they come at a significant cost.  There's also a threshold beyond which parents can just no longer afford to pay for care, which explains why some parents, particularly moms, have to leave the workforce to the detriment of our businesses, local economies, and the families themselves.   The differential between the cost of providing care and what parents can afford is so vast that no one entity can provide all the needed resources, including the federal government.  We don't have to look back too far to see clear proof of this.  During and after the COVID pandemic, the federal government provided unprecedented funding to the childcare sector.  All told, pandemic era legislation increased regular childcare block grant funding by nearly 300%.   And while this additional federal spending of taxpayer dollars may have kept childcare providers open, it actually seems to have done little to address the affordability and sustainability of the childcare market.
Cost to families are still exorbitant.  Providers are fighting for their needed workforce, a significant care gap remains, and employers see the effect a lack of childcare has on their business.   The only reasonable approach to addressing the affordability and sustainability challenges facing the childcare sector is through public-private partnership.   Many examples exist throughout the country, and today we are privileged to hear testimony from policy experts and state leaders who are tackling this economic challenge head on.  From statewide initiatives to local investments to much needed policy reforms, we can inform and encourage our communities to think creatively about modernizing our childcare sector toward affordable and sustainable solutions.  With that, I yield to the ranking member for an opening statement.
Thank you, Mr. Chairman, and thank you to the witnesses for being here today and bringing your expertise and experience.  For years, I've heard from parents with young children that having reliable childcare makes all other work possible.   A majority of families with children under the age of six need some form of childcare, and in most households, all of the adults are working.  In fact, all available parents are in the workforce for about 69% of children under the age of six.  And of course, when kids get older, they still need before and after school care and extended learning opportunities, or they will have the gaps that really challenge families as well.  But despite this overwhelming need, childcare remains both expensive and scarce.   It's something every witness here today included in their testimony, and in today's economy, parents must often juggle multiple responsibilities to make ends meet.  Too many families today are struggling with higher prices at the grocery store, skyrocketing costs for healthcare and housing.  Childcare is a necessity for the majority of American families with children, and in many places across the country, it's more expensive than housing.   or in-state college tuition.  So this forces families to make impossible choices.  Do they pay for rent, utilities, food, and healthcare, or do they pay for childcare?  And in too many cases, families settle for lower quality care or may decide to leave the workforce entirely, jeopardizing their financial stability and future opportunities for their children.

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