IMPACT

Childcare Is Broken In America. Washington D.C. Has A Plan To Fix It.

Parents are finding access to affordable, quality childcare nearly impossible. Washington, D.C., wants to be the model of how to fix that.
Childcare is unaffordable across the U.S. but Washington, D.C., could well become a model of how to make it much more accessi
Childcare is unaffordable across the U.S. but Washington, D.C., could well become a model of how to make it much more accessible.

As soon as Sarah Towne had her youngest daughter she started calling childcare centers in Washington, D.C., where she lives. She got an infant spot in the center where she had sent her son before he entered preschool. But the day before she had to go back to work the center told her the spot was no longer available. “I had no back-up option, I had nothing,” she recalled.

She and her husband cobbled together a nanny share and asked her mother-in-law, who lives in a far away neighborhood, to watch her daughter on Fridays. “It was so stressful,” she said, “It just wore me out.” It was also expensive: it cost $300 a week for three days of the nanny share. Some weeks she just didn’t have the money to pay the nanny on time. 

She was spending between half to three-quarters of her income on childcare, and she was spending time on the coordination, and it no longer felt worth it. She quit her job. “The force to stay home with your kid because you can’t afford childcare ... that was so frustrating. I want to work.”

After two years as a stay at home parent, re-entering the workforce was tough. She now teaches online but is yet to find full-time work. “I have a master’s degree, three-quarters of a Ph.D., ten years of experience, [but I’m] still struggling with the job market. It’s super frustrating.”

Towne’s struggles expose a piece of the broken childcare system in America, where childcare is unaffordable across the U.S., subsidies to assist low-income parents are underfunded and inadequate, and the quality of childcare varies enormously. These are the reasons childcare is becoming a key issue in the 2020 presidential campaign, with Democratic candidate Elizabeth Warren unveiling a bold proposal

Sen. Elizabeth Warren (D-Mass.), is one of several Democrats running for the party's nomination in the 2020 presidential race
Sen. Elizabeth Warren (D-Mass.), is one of several Democrats running for the party's nomination in the 2020 presidential race. She has unveiled a sweeping plan for universal childcare in America.

But Towne is luckier than most American parents. She lives in the nation’s capital, a city that since 2009 has offered a universal, free preschool program that today covers three- and four-year-olds. Her daughter will enroll in free preschool in August, just as her son already has.

D.C.’s universal preschool program has already been a huge benefit for the city’s working families. The Center for American Progress found that after the program was implemented, it increased the share of mothers with young children participating in the city’s labor force, those either working or actively looking for a job, by 10 percentage points

Now city lawmakers want to go further, capping all families’ childcare costs for ages zero to three at no more than 10 percent of their incomes. Should it come to full fruition, some experts say that D.C.’s programs would offer a glimpse at a real solution for the rest of the country. 

“The birth-to-three policy, coupled with pre-K, is absolutely the blueprint that we think states and cities should be using to push policy forward,” said Katie Hamm, vice president of early childhood policy at the Center for American Progress. “It presents a strong path forward.”

In the rest of the country, most parents have to foot the entire bill for their children’s care from age zero to five.

Some low-income families qualify for government subsidies, but there isn’t enough funding for everyone to get help. Subsidies reach just 15 percent of the eligible children across the country, and many families living just above the poverty line don’t qualify at all. The full cost to parents of putting a child in a center is over $10,000 a year, on average— a huge amount for an individual family, but often just barely enough for a provider to offer good care.

The mismatch between what parents can afford and what it costs to provide good care is “precisely the case for public investment,” Hamm said. “Just as we think of K-12 [education] as a public good, we should think of early childhood as a public good.”

If we don’t, it will keep dragging down our economy. Economists have found that the U.S. has started lagging behind other developed countries in the share of women in our workforce thanks, in part, to the lack of investment in childcare. One paper found that the increase in the cost of childcare between 1990 and 2010 reduced women’s employment by 5 percent.

In 2016, nearly 2 million parents reported having to turn down a job, quit a job, or significantly change their job because of childcare issues —a problem not just for their employers, but for the entire economy if they are missing out on pay. When parents earn more, they have more to spend in their local communities and pay taxes that benefit the whole country.

For Danielle Gonzales, D.C.’s universal preschool program was a life-line. When she got pregnant nine years ago, one of the first things she did was get on a waiting list for childcare in D.C. Even so, her daughter was only able to get into a center at 15 months old. In the interim, they relied on a nanny, which was “very expensive,” she said.

The cost didn’t abate once her daughter was in a center: about $2,400 a month. That figure rose to around $4,000 after she had a son and managed to enroll him in the same center. The financial strain meant that they had no extra money for anything other than the essentials. “My biggest expenses [were] my mortgage and childcare,” she noted. “Every month those [were] the first checks, and…what’s left goes to utilities, groceries, gas.” 

D.C.’s preschool program, at the time only open to four years olds, eased the financial burden. Once both children were enrolled, for the first time Gonzales and her husband were able to put money away in savings, rather than living paycheck-to-paycheck from their two jobs in nonprofits. They were able to pay down the credit card debt they had accumulated as well as pay off some of their student loans.

They are now waiting for their third child, who turns three in July, to leave childcare and enter preschool. Gonzales thinks they wouldn’t have even been able to have a third baby without D.C.’s program. “If it was two or three or four years of having to have two or even three kids in childcare, we could not have managed,” she said.

A big part of the reason parents like Gonzales pay so much in the early years is that providing high-quality childcare is costly, and innovating is even harder. “There’s very little profit to be gained in childcare,” Hamm explained. Providers “are operating at very thin margins.”

That’s in large part because there are a lot of high, fixed costs that come with providing good care. High-quality care for infants requires one adult for every three babies. “Because by definition high-quality care is labor intensive, it means that there’s no efficiency to be gained by caring for more children,” Hamm said. Adding more children without more providers “is going to undermine the quality.” Plus there are the fixed costs of rent, utilities to keep the lights on, equipment and snacks.

And while states and cities want to ensure that childcare isn’t substandard when they raise licensing and other requirements, said Hamm, they often don’t increase funding to help providers cover the extra costs. “They don’t have a magic pot of money that they can use to implement that,” she added.

Naomi Rasmussen learned all this the hard way. After having her son and struggling to find flexible childcare when she returned to work, she decided to open an innovative childcare center in Washington, D.C.

Naomi Rasmussen started a flexible childcare business in D.C.
Naomi Rasmussen started a flexible childcare business in D.C.

She came up with a coworking space that also offered childcare: “Half for the child and half for the parent,” she explained. She opened Workafrolic at the beginning of 2018. Parents worked on the top floor of the building; the infants were cared for on the middle floor, and the first floor was for toddlers. Parents signed up online for hour-long slots, some planning out their months in advance, some using it as a last minute option.

It was successful. “We were really busy,” Rasmussen said. “We were able to hit on something in a way that people really liked.” But ultimately the business failed.

Getting licensed was too expensive for the small business, which meant children could only be cared for three hours at a time. And Rasmussen had kept fees low. “I wanted it to be accessible, I didn’t want it to be only for the super-rich people who frankly probably have a lot of other options,” she said. But she soon found she didn’t have enough to cover her expenses and, because of the flexibility for parents, her income was unpredictable. Workafrolic closed its doors in October.

Despite all of D.C.’s progress, childcare providers like Rasmussen are still struggling in the city.  Ironically, the universal pre-K measures seem to be making things harder for some.

Subsidies reach just 15 percent of the eligible children across the country, and many families living just above the poverty
Subsidies reach just 15 percent of the eligible children across the country, and many families living just above the poverty line don’t qualify at all.

One way many childcare providers are able to offer more costly care for infants is by also caring for older children, which tends to cost a little bit less, evening everything out. But ever since the city started offering universal preschool for three- and four-year-olds, childcare providers haven’t been able to offset their costs that way.

“The success of universal pre-K drawing three and four-year-olds out of early childhood centers definitely limited their ability to cross-subsidize,” said Ed Lazere, executive director of the D.C. Fiscal Policy Institute. “It doesn’t mean that you don’t want universal pre-K [but] you should be providing what’s needed for every child.”

Advocates recently started to recognize this problem, as well as the fact that the childcare system for children under the age of three had been neglected. Because subsidies for parents are low, a lot of providers in the city struggle to provide high-quality care. “Some were actually closing their doors because they just couldn’t make ends meet,” Lazere said.

Last summer, the city council unanimously passed legislation aimed at tackling this problem. As well as capping childcare costs, the “Birth-to-Three For All D.C.” bill would expand subsidies so that all families are eligible. The bill also increases the amount of money childcare providers would get from those subsidies.

“Almost every family worries about where they’re going to find good quality childcare that’s convenient and affordable,” Lazere noted.

The legislation, he argued, isn’t just about ensuring that all children get an equally healthy start to life. It’s also about the city’s future. “We’re not going to keep families in the city” if they can’t find affordable care, he said. “Both universal pre-K and now birth-to-three is a recognition that a healthy community has to adequately support the development of children.”

“It’s pretty groundbreaking if it goes into effect,” he added. That’s still a big “if”. The bill now needs funding to become reality, something mostly under the control of Mayor Muriel Bowser. 

Muriel Bowser kisses her daughter, after being sworn in as mayor of the District of Columbia, Jan. 2, 2019.
Muriel Bowser kisses her daughter, after being sworn in as mayor of the District of Columbia, Jan. 2, 2019.

“The goal is to make sure the mayor embraces this in her budget,” Lazere said. “If it’s not funded at a substantial level in this upcoming budget,” he added, “it will really be a hit to the vision and momentum that’s needed.”

That would put a damper on what could otherwise serve as an inspiration for cities and states all across the country facing the same childcare crises. “The hope is that if we can make it happen here in D.C., that it’ll be seen as a model,” Lazere said. 

For someone like Gonzales, a 10 percent cap on how much of her income went to childcare would have been “extraordinary,” she said. And she notes that it wouldn’t just have been her family that benefitted, but her entire community’s economy. “I think where that money could have gone,” she said.

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