Good morning, Broadsheet readers! Citigroup CEO Jane Fraser told employees to “get off the train” if they couldn’t handle the company’s recent restructuring, Qantas CEO Vanessa Hudson apologized to customers, and the childcare cliff is almost here. Have a great Tuesday!
– Off the cliff. On Saturday, the United States’ childcare system is set to fall off a cliff. Pandemic subsidies for child care providers expire on Sept. 30, threatening care for 3.2 million children nationwide.
The Child Care Stabilization Program was part of the American Rescue Act of 2021, providing $24 billion for child care providers to pay their rent, pay their workers, and offer higher wages and bonuses in a tight labor market. About 200,000 childcare providers have depended on those funds.
But 70,000 childcare centers are likely to close with the expiration of this funding, according to a report by the Century Foundation. It won’t be sudden, but instead will be a “slow-rolling crisis” as programs balance budgets and realize where this funding gap leaves them, says Whitney Pesek, director of federal child care policy for the National Women’s Law Center.
The economics of private-sector childcare have never fully made sense; care is unmanageably expensive for families, and yet childcare workers are paid low wages. “It hasn’t really rebounded in the way a lot of other low-wage sectors have,” explains Pesek. “It will only get worse with this funding going away.”
Child care providers that run on “razor-thin margins” will likely raise rates for families. For the workforce that provides care—mostly women and especially women of color—higher wages and bonuses will likely disappear. Families in rural areas and families of color will be the most impacted by closures and rate increases.
The narrative that “the pandemic is over” is contributing to this funding being allowed to expire, says Pesek—even though the affordable childcare crisis existed before the pandemic and is far from fixed today.
While the ultimate solution is universal childcare—a long-term political battle—there are some other options in the near term. Democratic lawmakers have introduced legislation that would extend this funding, but it has yet to gain bipartisan support. Without such legislation on its own, activists and lobbyists are aiming to attach child care funding to an omnibus bill—like 2024’s appropriations bill—before the end of the year.
Emma Hinchliffe
[email protected]
@_emmahinchliffe
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