Massachusetts is one of the most expensive states in the nation to care for a child. According to a recent report by the Massachusetts Special Legislative Early Education and Care Economic Review Commission, many families spend between 20% and 40% of their income on early childhood care. This causes direct harm to families with young children and also strains the statewide economy. Inadequate access and soaring costs drain an estimated $2.7 billion out of the economy every year.
Soaring child care costs are harming families and draining the statewide economy
High costs force many parents and mostly working-class mothers to transition to part-time work or leave the workforce altogether. This can negatively alter the course of their careers which drives the gender wage gap and suppresses economic growth in the state. COVID-19 has added to this effect. The pandemic shocked the supply of child care workers. In the fallout, working mothers picked up the slack. As the state continues to recover from COVID-19, lowering the cost burden of accessible, high-quality child care for working parents will reverse that trend and help families and the economy grow.
State lawmakers are well aware of the urgent need for relief and reform to the child care system in Massachusetts. Speaking recently at an event the Boston Chamber of Commerce, House Speaker Mariano called on the private sector to work with legislators to alleviate the crisis.
The Speaker’s invitation to businesses to propose suitable legislation to provide child care resources to their employees comes on the heels of the recent Early Education and Care Economic Review Commission report that examined the state of child care in Massachusetts. The Commission identified low wage growth for child care workers and program closures as primary contributors to rising costs.
Since March 2020, 17% of early child care and education programs have closed in Massachusetts. This represents nearly 24,000 enrollment slots for children across the state. As enrollment slots and workers disappear, competition and costs for the remaining options increase. The legislature has targeted these supply-side issues with a $100 million proposal that includes program stabilization grants and incentives designed to attract and retain child care workers.
The Commission’s report also identified failures in child care subsidy programs. Bureaucratic and information barriers mean that many eligible families cannot access child care subsidies. For those that do, current child care subsidy reimbursement rates cover only 50% of market-rate costs. This is below the federally suggested 75% which limits the ability of subsidy-eligible families to compete with private payers for limited slots. Even with these program stabilization grants, many working-class families will still struggle to afford quality child care without legislation fixing the leaks in the state's subsidy programs.
The cracks left unfilled by each policy choice must be kept in mind while policymakers are crafting the future of child care in Massachusetts. The required employer-based resources Speaker Mariano promoted can certainly provide needed relief for many families and an aggressive suite of policy options including employer-based resources, increased stabilization grants and easing the access to and competitiveness of public subsidies can meaningfully ease the burden of child care costs in the state.
Facing the challenges of soaring child care costs will require serious investment by present and future policymakers; the Commission’s report estimates at least $1.5 billion annually. However, that investment would be modest in comparison to the powerful tool that adequate child care becomes when it ultimately supports working families, attacks the gender pay gap, and drives economic growth.
References and Further Reading
Special Legislative Early Education and Care Economic Review Commission - March, 2022
The Untold Cost of Inadequate Child Care - The Massachusetts Taxpayers Foundation, April, 2022
Massachusetts' Economy Loses $2.7 Billion due to Child Care Problems Every Year, New Report Finds - GBH News, April 28, 2022
Why Has COVID-19 Been Especially Harmful for Working Women? - Brookings, October 2020
Massachusetts House Push for New Child Care Funding -- But It Won't Provide Direct Relief to Parents, Families - MassLive, April 11, 2022