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3.  

Expand Access to Affordable, Quality Child Care

Child care is critically important for working parents today. Among all families with children under six, 65% are headed by working single parents or by two working parents. Quality, licensed care is generally very expensive. For parents making minimum wage, the cost of licensed, center-based child care averages 66% of household income. This cost is simply unaffordable for many low-income workers. 

The need to work and to contain the costs of child care drives many lower income parents to find lower cost, usually unlicensed day care providers; or to reduce work hours to care for their children, curtailing their opportunities for income and advancement. Research suggests that informal and inexpensive child care may be low quality care, undercutting children’s ability to develop the skills they will need to participate fully in tomorrow’s workforce. For parents who must stay at home to care for their children, either temporarily when there are gaps in care or longer term when there are no affordable options for care, the consequences include lost wages and benefits, and lost opportunities for education, training and other investments that could enable mobility. 

Voluntary efforts by employers to subsidize the costs of child care and/or to provide child care for employees are worthy of support, but cannot be expected to cover more than a fairly small fraction of workers and rarely reach the low-income workers who need the most help accessing quality childcare. We agree that the primary responsibility for child care provision rests with parents and the public sector. Government policies, investments and income supplements can and should reduce the cost of child care for low and moderate income workers. We call on federal, state and local governments to help lower-income working parents pay for child care. We also call for significant increases in public investments to address the cost, quality and access to care – especially for low-income working families. Among other goals, these investments should aim to raise skills and incomes for the child care work force. Doing so will improve both the quality of care and opportunities for mobility among a large and low-paid workforce that is essential to the care of our nation’s children.

To increase the affordability of child care for lower income workers, we recommend that Congress: 

  • Expand child care assistance through the Federal Child Care and Development Block Grant, to fund parental choice of care across a range of options – with additional funding to cover the cost of high-quality care, and to reduce the cost of hard to access care (such as care in non-traditional hours, care for infants, and care for children with disabilities or special health care needs).
  • Target the Child and Dependent Care Tax Credit more directly on lower income families, and address low levels of “credit” compared to costs of care. Specifically, make CDCTC fully refundable so that low-income families can benefit from it, and expand it to cover a higher proportion of the cost of care.
To increase the supply of quality child care, we recommend that federal, state and local governments collaborate to:
  • Expand Head Start and Early Head Start.
  • Expand or implement universally available, voluntary preschools, which typically serve 4-year-olds, and may also serve 3-year-olds.
  • Expand full-day kindergarten to provide more hours of instruction and coverage for parents that work.
  • Expand the funding for quality afterschool programs (e.g., 21st Century Community Learning Centers).
  • Add specific (set aside) funding to the Child Care and Development Block Grant (CCDBG) to incentivize states to finance the creation of child care centers (including financing for building acquisition, remodeling, and other capital costs associated with operating a child care center) and licensed family child care homes where they are under-supplied. A set-aside approach would motivate states to offer contracts to child care centers in specific underserved areas, as a complement to the more common practice of dispensing dollars through vouchers to parents.
  • Use other federal and state resources to build child care supply and quality: tax credits for child care providers, developer fees to pay for child care as part of community development efforts, funding to help re-constitute old school buildings, and scholarships and/or student loan forgiveness for early childhood teacher training, among other investments.
  • Create and expand financing models, such as developer fees and tax credits, to expand the supply of care. Make fees and incentives available to both for-profit and nonprofit businesses, including “tax credit” models that provide equivalent financial incentives to entities that do not pay tax.
To help address the other high costs associated with raising young children, we recommend that Congress: 
  • Make the Child Tax Credit fully refundable, preferably throughout childhood, and at least during the first 5 years due to high costs of caring for young children.
  • Renew the policy discussion on child allowances (a basic monthly payment for families with children, available in most of the other industrialized countries). This allowance can be universal with tiers, or just for lower and middle income families. 

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