Child Care is Holding Back

the Economic Recovery:

Chartbook
Child Care is an Essential
Economic Pillar.
1 in 5 American households have a child under age 6 – more than
23.6 million kids that need full time care beyond what the K-12
education system provides.
63% of children under 6 have all parents
in the workforce
Share of children under age 6 with both parents working

• 15 million American children

under age 6 live in families, both
single and two-parent households,
with all parents working.

• IA, MN, NB, WI, SD, MA, MD, RI,

CT all lead the nation with more
than 70% children in households
with all working parents.

59%

60%

Source: Third Way calculations based on Census American Community Survey 2014-2018, 5-year estimates.
Children under 6 are a vulnerable group –
41% are at or near the poverty line
Share of children under age 6 at or near the poverty line

• Almost 10 million children live in

households earning less than 185%
of the poverty line.

• NM, AR, MS, LA, WV, AL lead the

country with more than half of
children under 6 in households at
or near the poverty line.

34%
31%

Source: Third Way calculations based on Census American Community Survey 2014-2018, 5-year estimates.
Poverty estimates include children in families earning less than 185% federal poverty line.
The Pandemic Severely
Damaged Child Care Services.
Child care centers closed en masse as costs skyrocketed and demand for
services from home-bound families dried up.
 States Facing Massive Loss of Child
Care Slots post-Pandemic
TX MI MO OH WI OK AR NH UT
0.00
-4,699.00 -2,264.00 -2,123.00 -957.00 -182.00
-20,000.00 -11,716.00
Gross change in child care slots between

-40,000.00 -25,633.00

-60,000.00
July 2019 – Feb. 2021

-62,611.00
-80,000.00

-100,000.00

-120,000.00

-140,000.00

-160,000.00

-180,000.00
-179,163.00
-200,000.00

Source: Third Way calculations based on Child Care Aware of America’s aggregated child care availability database. Child care slots are both child care centers and family care centers.
Almost 290,000 child care slots have not
returned across 10 states post-pandemic
as over 4,000 businesses fail to re-open

Texas lost 2,096 child care businesses

Michigan lost 1,164 child care businesses

Indiana lost 170 child care businesses

Ohio lost 416 child care businesses

Wisconsin lost 508 child care businesses

Source: Third Way calculations based on Child Care Aware of America’s aggregated child care availability database. Child care slots are
both child care centers and family care centers. Pre-pandemic dated as July 2019, post-pandemic dated as of February 2021.
There’s credible evidence this
is holding back the economic
recovery.
Data from the Census Bureau’s Pulse Household survey continually stress
the detrimental impact loss of child care is having on the recovery.
 4 in 10 with kids at
home, whose child care
situation was affected
by coronavirus, left, lost,
or didn’t look for work in
the last four weeks

Source: Third Way calculations based on Census Pulse Household Survey, Week 30, Table 6. Adults surveyed have children at home unable to attend daycare or another child care arrangement and
self-attested they or someone in the household lost, left, or didn’t look for a job in the last 4 weeks.
 50%
46%
Labor market impact of child care 45% 42%
insecurity is not distributed evenly: 40% 38%
35%

46% of Black adults, 42% of 30%

Hispanic adults with kids at 25%

19%
home, whose child care
20%

15%

situation was affected by 10%

coronavirus, lost, left, or didn't 5%

look for work in late-May 2021

0%

Black Hispanic White Asian

Source: Third Way calculations based on Census Pulse Household Survey, Week 30, Table 6. Adults surveyed
have children at home unable to attend daycare or another child care arrangement and self-attested they or
someone in the household lost, left, or didn’t look for a job in the last 4 weeks.
Two bold democratic
legislative efforts can help.
President Biden’s American Families Plan (AFP) and Chair Patty Murray
& Chair Bobby Scott’s Child Care for Working Families Act (CCWFA)
would dramatically enhance the child care landscape.
Biden’s American Families Plan (AFP)
prioritizes availability and affordability

Caps child care Providers will receive Families will pay

payments at 7% of full funding for services based on income–
income for families – allowing them to the median family’s
making 150% of their invest in quality care child care payments
state’s median income and developmentally would not exceed
appropriate curriculum $45 per week
The Child Care for Working Families Act
expands beyond the AFP in important ways

CCWFA includes the same cost caps as President Biden’s AFP–

and goes further by expanding preschool services

Invests $8 billion over Takes a birth-to-five approach Instructs states to devote 5%

10 years in expanding states’ to child care by prioritizing of funds to children with
preschool programs with a investments in infant and disabilities – placing children
focus on equity toddler care with unique needs in square focus
 A single mom in Arizona making median income
spends 38% of her income on infant care.

The AFP & CCWFA would save her

more than $9,000/year by capping
her payments at 7% of her income.

A couple in Colorado making median income

spends 14% of their income on child care for
a single toddler.

The AFP & CCWFA would save

them nearly $7,200/year – cutting
their annual child care expenses
in half.
Full data for all states available upon request.
Source: Third Way calculations based on Child Care Aware of America’s Picking Up the Pieces 2020 report on child care costs by state.
 The average family in Georgia spends over $15,000
sending two children to day care.

The AFP & CCWFA would save

them over $8,800 in annual child
care costs.

A single dad in New Hampshire spends 33% of

his income sending his 4-year-old to day care.

The AFP & CCWFA caps his

spending at $2,300 – saving him
$8,600 each year.

Full data for all states available upon request.

Source: Third Way calculations based on Child Care Aware of America’s Picking Up the Pieces 2020 report on child care costs by state.
Child Care is Holding Back
the Economic Recovery:
Chartbook