How the government failed working parents—and which policies could help

From essential worker stipends to paying daycare tuition, states are trying different approaches to help families with young children weather the pandemic.

How the government failed working parents—and which policies could help
[Images: Luis Alvarez/Getty Images, Kate Smith/iStock]

This story is part of Fast Company‘s Reinventing Education package. As millions of students begin school during a deadly pandemic and global recession, we’re highlighting the ongoing efforts to keep children safe in the classroom, educate them remotely, and help their parents manage a new second shift. Click here to read the whole series.


In one of her weekly Facebook Live press conferences in late July, New Mexico governor Michelle Lujan Grisham got frank about the limitations of childcare during the pandemic: “I have no doubt that we’re going to fall short on meeting everyone’s needs in childcare,” she told viewers, later adding: “We should have had a national plan. We should have done better with COVID. We should have been able to go back to school. All of those things should have happened, and they didn’t.”

A champion of early childhood education before the crisis, Lujan Grisham has been actively pursuing solutions to the current caregiving situation, which remains dire. Nearly half of the state’s daycare and preschool providers have shut down temporarily due to COVID-19, leaving working parents—especially low-income and/or essential workers—in the lurch.

It’s a problem playing out in households across the U.S., as we enter month seven of the pandemic. Parents who are essential workers have few good options: Pay for daycare and risk their children’s health, shift the burden of care to family or friends, or be forced to quit their jobs entirely. Even for parents who are able to work from home, the challenges are significant—especially for those with unsupportive employers, such as the employees of Florida State University, who received memos notifying them that, effective August 7, they’d no longer be permitted “to care for children while working remotely.”

To address the national caregiving crisis, many states and districts are attempting to craft public policy that provides flexible options for parents with different schedules and needs, and also props up the struggling childcare industry. But, unlike for K-12 education, the majority of the little public funding that preschools and nurseries receive is from the federal government, channeled through the states. Even the plans that are more intricate than simply showering providers with lump sums depend upon more generous federal funding.

Exposing existing inequity

The pandemic has put stress on what was already a patchwork—and, according to many experts—a flawed system. “We have not come to grips in this country with the issue of childcare, and where it fits in our national agenda,” says Linda Smith, director of the Early Childhood Development Initiative at the Bipartisan Policy Center. Seven million children in the U.S. attend childcare centers, and three million are cared for in home-based settings. Even before the pandemic, the average working family spent $12,000 per child annually on childcare, representing 9% to 36% of a family’s income, and only one in six eligible children received subsidies to help pay for care.


We have not come to grips in this country with the issue of childcare, and where it fits in our national agenda.”

Linda Smith, director of the Early Childhood Development Initiative at the Bipartisan Policy Center
In the U.S., childcare is a business, but unlike other businesses, there’s a public good aspect that’s too often unaddressed, Smith says. “If you don’t have a restaurant in your neighborhood, you’re not going to starve,” she says. “If you don’t have childcare, you can’t go to work.” She suggests childcare should be treated more like a public service than a business, and heavily subsidized in a sustained way by the government, as is the case for public K-12 education. But currently, in the words of progressive think tank New America: “The child care market doesn’t work.”

Now, amid the pandemic, parents are desperate for childcare options and will continue to seek them as the tottering work-care balance becomes less sustainable. But right now the demand for childcare is much lower than usual, as many parents have opted to keep their kids home due to infection concerns. As of July, a National Association for the Education of Young Children (NAEYC) survey showed enrollment in childcare centers and family child care homes to be down by 67%. Those that have remained open are having to spend significant additional funds on cleaning supplies and PPE.

More from Fast Company‘s “Reinventing Education” Series:

Because of a dwindling market and a shortage of financial support, only 18% of childcare providers believe they will be able to remain open after a year, according to the same NAEYC survey. “There are still going to be [K-12] schools with teachers that exist in the spring,” says Lauren Hogan, NAEYC’s managing director. “That’s not true for childcare.”

Most governmental funding proposals so far have focused on providing emergency stabilization to prop up the childcare industry, so it can serve parents who need it in the short term and continue to exist once the pandemic is over. In April, the federal CARES Act allocated $3.5 billion to states for childcare—a paltry figure compared to a $58 billion bailout the airline industry received, for instance. Each state was, however, given the flexibility to decide how to allocate that federal chunk (from paying childcare providers’ salaries, to covering tuition fees for qualifying families, to setting up family care programs), as well as its own emergency state funds. The Congress then went on recess, without delivering any follow-up financing, in the form of the long-promised HEALS Act or otherwise.


Some states have crafted a more meticulous policy that has addressed both supply and demand. The Hunt Institute, an educational nonprofit that analyzed each state’s plan, concluded that Vermont moved the most “aggressively to ensure the ongoing solvency of its state’s child care providers.” With the $4.4 million it received from the CARES Act, Republican governor Phil Scott set up the country’s first initiative to replace lost tuition payments while centers were closed. Vermont covered fees on behalf of families who would normally be paying regular tuition but weren’t using childcare during the pandemic, regardless of a family’s income status—as long as the provider paid its staff 100% of wages due and kept the slot open for the child to return.

The state also established an Essential Persons Incentives, whereby it paid tuition fees for children of essential workers and gave the providers weekly stipends to use on cleaning supplies and safety measures.

New Mexico, which received $29.4 million, gave childcare stabilization grants directly to providers and started a wage incentive plan to keep care centers open, paying $700 per month for full-time workers and $350 for part-time workers. Lujan Grisham also secured healthcare for uninsured childcare workers, whereby the state would pay the cost of insurance premiums, and if workers or any family members tested positive, they would receive comprehensive healthcare through the end of recovery, regardless of income or immigration status.

However impactful these state policies have been for childcare providers, the money is running dry, and they’re at the mercy of federal funds. And so are families who need a stimulus to afford care. “What we’re able to do going forward will certainly depend, in large measure, on what Congress and the president decided to do next,” says Matt Bieber, director of communications for New Mexico’s Early Childhood Education and Care Department.

Hear more about the public policy solutions to the crisis for working parents in a special Reinventing Education podcast mini series


That’s the looming question: What’s next, and how much will it fund? In a hope to get more money to states, Congressional Democrats crafted the Childcare Is Essential Act, which passed in the House in July but is still awaiting a Senate vote. That plan would distribute $50 billion to the states as further emergency stabilization.

A Band-Aid is not going to solve this for the long-term effects of coronavirus and its impact on our economy.”

Senator Patty Murray
Senator Patty Murray of Washington, who sponsored the bill, along with Senators Tina Smith, Kirsten Gillibrand, and Elizabeth Warren, tells Fast Company that figure was reached based on discussions with experts around the country and the need for ongoing support. “A Band-Aid is not going to solve this for the long-term effects of coronavirus and its impact on our economy,” she says.

Senators Joni Ernst and Kelly Loeffler have co-signed a rival Republican bill that would distribute exactly half the cash, $25 billion, to the states. That’s “far short of what is needed,” Murray says. NAEYC’s Hogan says lower-figure estimates (such as the one suggested by the Republican bill) are predicated on half of the providers shuttering and remaining closed.

In addition to doling out the money, Murray emphasizes that the proposed bill would address the glaring inequities exposed by COVID-19, by prioritizing investment for childcare facilities that provide services during nontraditional hours (which many essential workers need) and that serve populations including dual-language learners, low-income families, and the homeless. It would also require providers that receive grants to prioritize tuition relief for families struggling to afford care.


Filling the gap

The pandemic has affected low-income and minority populations more than others and has been a “double whammy” for essential workers, says New Mexico’s Bieber, in that they represent parents with nontraditional schedules and less disposable income, and they’re the employees that keep the childcare industry ticking along. Forty percent of childcare workers are people of color and primarily women of color. Due to their frontline work, they cannot work from home, meaning they may rely on childcare too.

These employees also further prove that the traditional nine-to-five daycare center model doesn’t work for everyone. This is a trend that has become ever clearer since the rise of the gig economy, says Smith of the Bipartisan Policy Center. Parents now need help before and after school hours. That makes in-home care centers vital, as those providers are often open around the clock, and provide a more home-based approach that mirrors an extended family, compared to that of a traditional childcare center. The fact that many of these providers look after a smaller number of children may also be preferable to parents worried about virus transmission.

Parents who may prefer those benefits of a more intimate setting and workable schedule during the pandemic have turned to “informal care,” where a friend or family member looks after their child. Bieber says New Mexico has been encouraging people to apply for this Temporary Family, Friend, and Neighbor Child Care initiative. Potential caregivers go through background checks and take health and safety training to assure that they are “capable and qualified,” and they are eligible to apply for subsidies per child from the state.

Some districts have also come up with plans to put K-12 teachers to work in childcare-adjacent roles, with “learning labs” or “hubs” models for older students who need to be kept busy. In Madison, Wisconsin, the school district will go fully virtual in the fall. But for those without childcare options, the new MSCR Cares program will use schools or community or recreation sites to host socially distant learning. Joining with community partners, they’ll reassign 150 school district employees to these labs, initially looking after 1,000 elementary students, prioritizing children of low-income or essential-worker families. It’ll cost $150 a week, and there will be payment options for those who can’t afford the fee.

Similarly, centers and recreation facilities in San Francisco will transform into hubs for 6,000 students, which is crucial for young children who need close-contact learning and for those who don’t have internet or equipment at home for distance learning. In New York City, Mayor Bill de Blasio announced “quality, safe, free childcare options” for third- to eighth-grade students, and the city aims to make 50,000 seats available per day in schools, community centers, libraries, and cultural organizations.


Long-term Solutions

Parents spend $42 billion a year on early childcare and education, much higher than the amount the government chips in, at $34 billion annually. That public expenditure, at about 0.3% of the U.S.’s GDP and $700 per child, is low compared to many of its developed-country counterparts, including Sweden (1.6%), South Korea (1.0%), and New Zealand (0.9%).

That extra funding lets other countries apply more innovative policies to support parents as they return to work. In Italy, where grandparents often help care for children, a €600 “babysitting bonus,” or universal-basic-income-style monthly stipend, was doubled after people protested, saying it was too low. Korea provided emergency childcare at kindergartens and elementary schools, with flexible hours and smaller groups—and even offered an option to send caregivers to households if nearby facilities weren’t available. (Those countries also tackled the virus early and are now ready to reopen schools, at least for now.)

Some districts have been trying to address inequities within the childcare system, beyond just providing shorter-term solutions during the pandemic. Washington, D.C., for instance, now offers free preschool for three-quarters of its three-year-olds. That has allowed the city’s maternal workforce to go back to work—important because the pressures of childcare disproportionately fall to women, forcing many to reduce their hours or even put their careers entirely on hold. Since 2008, when the program started its expansion, maternal labor participation in D.C. has risen by 10%.

Internationally, the U.S. ranks 30th of 35 developed countries in terms of women’s labor participation. And the pandemic is only making things worse: In mid-July, 33% of millennial mothers were not working specifically because of school or childcare closure, versus 11.8% of fathers, according to U.S. Census Bureau data.

An uncertain future

The future of childcare in the U.S. will undoubtedly be affected by who is elected in November. Joe Biden has promised to make childcare a national priority, with a $775 billion plan over the next decade. That sum would support free universal pre-K for three- and four-year-olds, and the plan includes tax credits to help families pay for care, subsidies so low-income families pay no more than 7% of their income to childcare, and subsidies for after-school, weekend, and summer care. The Economic Policy Institute predicts it would boost the economy and create three million more jobs—and “stem the erosion of women’s labor force participation in the United States relative to our advanced country peers.” (Senator Murray, who advised Biden on the plan, says she envisions herself as the overall policy chair of the committee.)


The Trump campaign has not offered any details on its childcare plan for the next four years, save a vague mention during Ivanka Trump’s convention speech, that the child tax credit passed as part of the president’s tax reform package “put over $2,000 into the pockets of 40 million American families” in 2019. It’s likely that only upper-income families received that sum, while full-time minimum-wage workers received an additional $75 on average.

In childcare, money is everything, but it’s still not enough. For Patricia Cole, federal policy director at nonprofit Zero to Three, it’s essential in the long term to have more prescriptive policies that go beyond lump funding for states. “Having the money there doesn’t ensure that all of these needs are going to be met,” she says.

For one, childcare workers need to be paid more, perhaps by requiring programs to adequately compensate staff as a condition of getting funded. The government also needs to address “childcare deserts,” which exist in minority and low-income neighborhoods, to pinpoint specifically where there are no high-quality programs and then provide incentives for centers to set up services in those areas, she says.

As an example, in his latest COVID-19 relief budget, Governor Tom Wolf of Pennsylvania announced he was setting aside $27 million specifically for expanding childcare in his state’s deserts. Pennsylvania previously identified deserts by comparing the licensed capacity of providers to census data on the number of children in need of care, according to a spokesperson for Wolf’s office, but it will be carrying out additional modeling now to account for COVID-related changes.

There’s a lot of work to be done. “This is a system that is so threadbare, even before March hit us,” Cole says. “It’s really hard-pressed to think about even getting back to where we were, much less to where we need to be.”