The end of the United States child care natural experiment : The Indicator from Planet Money During the Covid-19 pandemic, the United States took dramatic action to invest in child care. Now in 2023, the majority of those investments are coming to an end. Today, we talk to childcare providers about what those funds meant—and where the end of the pandemic-era programs leaves an essential but strained system.

For sponsor-free episodes of The Indicator from Planet Money, subscribe to Planet Money+ via Apple Podcasts or at plus.npr.org.

Music by
Drop Electric. Find us: TikTok, Instagram, Facebook, Newsletter.

When Uncle Sam stops paying the childcare bill

  • Download
  • <iframe src="https://www.npr.org/player/embed/1197954497/1203118095" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

SYLVIE DOUGLIS, BYLINE: NPR.

(SOUNDBITE OF DROP ELECTRIC SONG, "WAKING UP TO THE FIRE")

WAILIN WONG, HOST:

Here on THE INDICATOR, we love natural experiments. And in the pandemic, we got quite the natural experiment when the federal government stepped in to save child care. Congress approved tens of billions of dollars to stabilize the industry and to make child care affordable for millions of people so they could go to work.

ANDREA HSU, BYLINE: People like Brandie Neel (ph) in West Virginia - her kids love their day care. Summer was especially fun.

BRANDIE NEEL: Two field trips a week, so it was definitely - they had a blast.

HSU: And the price was right. In fact, it was free.

(SOUNDBITE OF MUSIC)

WONG: This is THE INDICATOR FROM PLANET MONEY. I'm Wailin Wong.

HSU: And I'm Andrea Hsu from NPR's Business Desk. Today on the show - how unprecedented amounts of money changed child care.

WONG: And how the end to that money, the end of the natural experiment, could throw the sector back into crisis.

(SOUNDBITE OF MUSIC)

WONG: Child care is often seen as an example of a positive externality. Research shows that kids in high-quality day cares develop all sorts of skills that benefit their communities later in life.

HSU: Yeah, and it allows parents and caregivers to work and contribute to the overall economy.

WONG: But as we've covered on THE INDICATOR, child care is also often seen as a market failure. Even though there are all these societal benefits, that doesn't mean day care centers get compensation for that. So a lot of day care centers struggle to stay afloat, and a lot of parents struggle to afford care.

HSU: And Melissa Colagrosso has felt that economic reality at the day care center she owns in a rural, mountainous area in West Virginia. It's called A Place To Grow. She's been doing this for 28 years, and it hasn't been easy.

MELISSA COLAGROSSO: We just had debt. We just borrowed. The number of times that payroll would come up, I'd go to my credit line in the back and say, I'm going to have to borrow $20,000 to get through.

HSU: But she's managed to make it work. I spoke to Melissa on a busy day at the center.

(SOUNDBITE OF ARCHIVED RECORDING)

UNIDENTIFIED MUSICAL ARTIST: (Singing) We're going to jump, jump, jump our jiggles out. Jump, jump, jump our jiggles out.

WONG: I could see that if that song were playing all day, you might get a little tired of it. But just hearing that little snippet with the sound of the kids made me really happy.

HSU: It's so cute, right? But, you know, we got to go back to when the pandemic first hit. Remember what things were like? You know, it was dire. Schools closed. Businesses closed. Melissa wondered if any of her staff would come to work, if families would still bring their kids. She thought about closing down, but people came to her in tears, begging her to stay open, saying, I have to go to work because I'm an essential worker.

COLAGROSSO: And so we had, you know, the paramedics and the doctors and the respiratory therapists and people working in nursing homes. Yeah, that was wild. But, you know, everybody that was being exposed - and then all of our staff had to say, yeah, I'm willing to be exposed too.

HSU: And that was a big ask. You know, these are people who are making nine, $10 an hour. And at the time, they probably would have gotten more money had they been laid off, given the enhanced unemployment benefits people were getting.

WONG: Yeah. If you remember back, it was 600 extra dollars a week on top of state unemployment.

HSU: Yeah, a lot of money. But the economic picture for child care workers was about to change. Relief came quickly, first from the state, then from the federal government. And I've been thinking about the pandemic as sort of this Cinderella moment for child care. It's like suddenly child care in America got to go to the ball and we got a chance to see, you know, what would it look like if the government threw lots of money at child care to fix all these problems?

WONG: And when we say lots of money, we are talking $39 billion that Congress put toward child care as part of the American Rescue Plan. That's the biggest investment in child care in our country's history. So I guess this makes Congress the fairy godmother. Is that where we're going with this?

HSU: Yeah, yeah. I guess so.

WONG: And that money allowed states to try all sorts of things. West Virginia announced it was making child care free for all essential workers, and child care workers were deemed essential as well.

HSU: So, Melissa's staff who had kids could bring those kids to work and have them in this high-quality day care center for free. She didn't know how long it was going to last, but it was an enormous benefit.

WONG: Not having affordable child care options is a top reason parents don't work. And West Virginia did something else. A Place To Grow is in a low-income rural community. Most of the families there already qualified for child care subsidies based on their income. But pre-pandemic, the state would only pay those subsidies on the days that kids actually showed up.

HSU: Yeah, and there are lots of days when kids don't show up because, you know, they're out sick or grandma's here or the family goes on vacation. Melissa Colagrosso says sometimes she'd have 10 kids out, and she'd have to send staff home. These teachers making 10 bucks an hour were only getting 30 or 32 hours of work in a week, and that made it hard to hold on to them.

COLAGROSSO: These teachers with degrees are going to say, I can't afford 32 hours. You keep sending me home, I'm going to have to go find a full-time job.

WONG: So West Virginia, along with a majority of states, started paying based on enrollment, not attendance. The state said, OK, we'll pay day cares for the slots, regardless of who shows up. This meant day care owners like Melissa could guarantee their staff a 40-hour workweek. That was a huge deal.

HSU: Now, I have to bring up one more huge change that happened in the pandemic. And this really made me think of Cinderella again. During COVID, because of all that federal relief money that was coming in, child care workers started getting big raises and bonuses. In West Virginia, day care teachers went from $10 an hour to $14 an hour, and they got thousands of dollars in bonuses. One of the teachers I talked to, Destiny Vansickle, well, she was socking away this money. And this summer, she was able to pull together a down payment on a little house for her and her two boys. She told me she's already saving money by not renting.

DESTINY VANSICKLE: My rent was, like, 530, I want to say. And my house payment's only, like, 513 now. So it's not much, but it's - that little bit goes a long ways.

WONG: And Destiny had been in subsidized housing. Now she owns her own place and is building equity.

HSU: Also, she has this little fenced yard that she loves.

WONG: OK. So it feels like we're still at the ball. But we do have to talk about this stroke of midnight. The majority of this federal pandemic-era money is coming to an end. The deadline for spending it was, in fact, just this weekend. So now it's kind of up to states to carry on without that federal support.

HSU: And some states are stepping up. Vermont, Massachusetts, Washington state are among those pouring historic amounts of money into child care. They're making far more families eligible for subsidies and putting more state funds towards increasing supply, especially in so-called day care deserts.

WONG: Other states, like Kentucky, are trying some out-of-the-box ideas for long-term fixes, including making child care free for all child care workers. These are still not exactly good-paying jobs. In Kentucky, for example, the average hourly pay is $12 and change. But if you get free child care, then suddenly it becomes more attractive than a job at Target or Amazon that might pay around 18 or $20 an hour.

HSU: Still, though, with that pandemic money spent, tough decisions have been made and are still being made about what to discontinue. Those big pandemic bonuses are gone.

WONG: Yeah. And in West Virginia, it's already been a year since the state stopped subsidizing child care for all essential workers. They're back to an income-based program.

HSU: And that has real consequences for people like Brandie Neel, the mom we heard from at the top. She didn't pay anything for child care during the pandemic because her husband was an essential worker. He's military. But after that ended, they had a choice to make. Brandie and her husband make too much to qualify for the income-based subsidies. But paying for day care for two kids would have wiped out most of her earnings. And so she was faced with this question.

NEEL: Am I going to work or am I going to pay for child care? Thankfully, my parents stepped up and were able to help me, but they're disabled.

HSU: She shared that her dad, who's an ironworker, had an accident at work and suffers from a traumatic brain injury.

NEEL: And, you know, kids are loud. So they definitely spend all their time watching TV. Whereas if they were here, they would be playing with their friends, going on field trips. So it was definitely a big adjustment. But I feel like we just kind of have to do what we have to do at this point.

WONG: There's a recognition that for people like Brandie, more needs to be done. But there's political gridlock on how much to spend on child care. Democrats have proposed a bill that would allow the federal funding to carry on for another five years, but it is going nowhere right now. Of course, we have seen this elsewhere with pandemic-era programs. The Child Tax Credit cut the child poverty rate in half. There's bipartisan support for making it permanent, but Congress can't agree on how to do it.

HSU: So going forward, how much day care costs, how good it is, how many spots there are is probably going to depend on where you live.

(SOUNDBITE OF MUSIC)

WONG: This episode was produced by Corey Bridges with engineering by Josephine Nyounai. It was fact-checked by Sierra Juarez. Kate Concannon is our editor, and THE INDICATOR is a production of NPR.

Copyright © 2023 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.