How coronavirus is changing the future of child care

America’s child care industry was under-funded and over-extended. Then came the pandemic.

When social distancing started in March 2020, parents began keeping their children home out of fears for their health, and states began passing laws restricting or shuttering daycare facilities. Child care centers and home-based daycares alike started closing; now many are struggling to stay open.

“It feels like the whole system could collapse,” said Patricia Cole, senior director of federal policy for Zero to Three, a nonprofit research and training organization for early childhood development in Washington.

The public funding that’s been provided so far, in the form of loans, grants to states and the Paycheck Protection Program (PPP), has been helpful – but inadequate – to address the breadth of the need, she said. States, in particular, had a tough decision to make about how to allocate funds. For example, she mentioned that the money Congress allocated for propping up child care in the first round of PPP loans was only about a third of what was needed.

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Problems with child care pre-coronavirus

Before the novel coronavirus changed the calculus, a lack of quality, affordable child care was keeping parents out of the workforce. In 2016, 2 million parents either didn’t take a job, quit a job or significantly altered their job description due to problems arranging child care, according to a report from the Center for American Progress.

Even with a robust economy, half of U.S. families reported difficulty finding child care, according to a 2019 CAP analysis. And mothers who could not find child care were less likely to work outside the home than mothers who could – though there was no impact on fathers’ employment.

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Now the stresses on this already fragile system have increased exponentially. Back in March 2020, nearly 90% of child care providers worried they would not survive the pandemic lockdown without significant public support, according to a survey by the National Association for the Education of Young Children (NAEYC).

As of December 2020, one-fourth of childcare providers are still closed.

Child care post-pandemic

Nine children showed up the first week of June 2020 at Annette Gladstone’s daycare center in Eagle Rock, a neighborhood in Los Angeles. That might have been fine a dozen years ago when she operated the business out of her home. But in 2019, Gladstone and her business partner Steve Heller realized a long-held dream and opened a facility that could serve 177 children, ages 12 months to six years old.

Before the pandemic, they were on track to crest 50% capacity. Business was booming. “One tour I had three families and they all signed up right away,” she said. “The need was huge. Then COVID hit.”

By the week of March 9, 2020, her families were growing increasingly uneasy with dropping off their children. The following Monday, with few or no children to serve, Gladstone closed up Segray Eagle Rock, the center she’d named years ago after her two boys, Sebastian and Grayson.

At first, she tried to pivot to Zoom. But that felt wrong. “Especially with us being a no screen, no TV, no computer, no movie school, how do we justify asking [parents] to put a child in front of a TV or a computer all day?” she said.

She also wasn’t comfortable charging tuition if she couldn’t provide care. So, she furloughed most of her staff, applied for federal loans and grants and tried to hang on. By early June, the children were trickling back. The state had cleared her to serve up to 70 children with social distancing guidelines. But given the staffing demands, rent and other expenses, she couldn’t see how she could hang on financially at that level if it went on for another academic year.

“It’s not realistic,” she said.

An industry scrambling to reimagine the system

Just like Gladstone waits and wonders in Los Angeles, child care providers across the country are doing the same right now, said Cole of Zero to Three.

Like Gladstone, many providers are still trying to figure out what they can financially sustain. For one thing, the rules have drastically changed. Gladstone’s center must reduce class size to no more than 10 children per room, and those children and their teacher or teachers must stay together all day, each and every school day, to reduce their collective viral exposure.

Where a preschool may once have welcomed parents into its facility, now parents must drop off their kids at the door. And providers have to pay staff just to shuttle kids, at a socially safe distance, from the door to the classroom and back again at the end of the day.

Running a daycare center or preschool – whether at a large facility or out of a home – has never been a very profitable venture. There’s only so much efficiency that can be squeezed out of careful attention to young children. Staff are often paid at or near minimum wage.

Yet margins remain narrow in good times. Now, these providers who were never flush are often operating at a loss.

“Overall, the financial situation is even more precarious than it was,” Cole said. “And it was precarious to begin with. As high as the costs are for parents, it barely covers the [providers’] costs at near-poverty wages for their workers.”

Parents struggling alongside providers

Meanwhile, parents have their own issues to consider. It’s tempting to wait and see how the virus plays out locally – if the curve flattens or rises – especially after reports of a rare but frightening COVID-19 complication for children.

“The question of how to shield your child from some degree of risk is a real one right now,” said Dan Wuori, senior director of early learning at The Hunt Institute.

But new regulations designed to limit disease spread also mean there will be fewer spots than ever. A study out of Arizona State University found that job postings for early education teachers at private centers dropped by 13% after stay-at-home orders went into effect. That means 10,000 fewer children can be served each month, the study’s authors wrote.

“If you were a parent who had your preschooler in a three-year-old class of 18, you may find your child’s slot is no longer available,” Wuori said.

Options left for parents are limited

Some parents may choose to leave their children with a nanny or a grandparent, rather than expose them to a larger group of children and staff. But children need other children, just like adults need other adults. One of the reasons Gladstone reopened when she did is some of her families grew concerned about the effect of isolation on their little ones.

“They noticed the children were regressing and not developing as well as they were in preschool,“ she said. “They said, ‘I’m noticing things, and I’m worried.’”

Parents may decide to split the difference and send their children to a home-based center, hoping that those providers can keep things contained.

Tracy Ehlert has been running just such a business, B2K Learning Center, out of her Iowa home for the last 13 years. A few years ago, she went to summers-only because she got elected to the Iowa state legislature. But the legislature suspended its session on March 17, 2020, and she unexpectedly found herself home in Cedar Rapids with time on her hands and desperate parents ringing her up, begging to drop off their kids. Then the parents got scared. Even though the daycare operates out of her basement, with its own dedicated yard and entrance – so children would not have to interact with her husband and son upstairs – by the time Monday rolled around, Ehlert was down to three children.

Still, at first, it seemed manageable. This would only be for a few weeks, she figured.

But families stayed away. Food prices went up. She had to do a deep cleaning every day, instead of once a week, and Clorox wipes, along with other disinfectants, were not to be found.

“The way it was sold in Iowa in the beginning was, let’s do this stuff so it doesn’t spread,” she said. “I don’t think I was as worried initially as I got five weeks into it.”

The center ran at a loss for weeks, with Ehlert using her legislative salary to bridge the gap. If not for that money, “I would have had to shut down,” she said. By June, she was full again, but as a legislator, she’s been on Zoom calls with providers across the state, and the news is not heartening.

“A lot of programs are at 10% capacity,” she said. “That’s so hard to see.”

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Protecting the child care system comes down to public support

Some form of public subsidy might help these providers, Ehlert said, but the legislator in her is hesitant to jump to a government-funded solution.

“A subsidized program would be wonderful, it’s just like, where does that money come from?” she said. “Child care is so important, and it would totally help the economy. But if you do that, what are you giving up? Because the money has to come from somewhere.”

“With enough thought,” she added, “it could be done. It just has to be very thoughtfully done.”

Since the pandemic started in early 2020, many lawmakers have put forth proposals to help struggling childcare businesses and parents.

On Feb. 27, the House of Representatives passed the $1.9 trillion American Rescue Plan, which includes an increased child tax credit for parents. This plan, which is expected to pass in the Senate, also includes almost $40 billion in relief funds for childcare providers.

“I do think this is going to raise the question of whether more public funding could be put into the nation’s child care system,” said Wuori. “It’s exposed just how essential an industry it is.”