As we get our wheels turning in 2021, it’s worthwhile to look back at some of the biggest challenges that our child care industry has had to overcome in the past year.
The events of 2020 showed us how vulnerable child care centers can be, with some centers closing permanently due to sustained financial losses during COVID-19. But we also saw how resilient our industry can be in times of hardship, innovating and adapting to stay open and keep serving their communities, even during a global pandemic.
Most importantly, we saw the public gain a greater appreciation for the role of child care in our communities and our economy, with issues like access and affordability coming to the forefront of the national dialogue.
Let’s take a closer look at some of the biggest events and changes that impacted the child care industry in 2020.
Child Care in 2020: A Year of Big Challenges
January-March: COVID-19 First Wave Hits
As the year 2020 began, child care in the United States was already facing an affordability crisis. Child care is considered affordable if families spend less than 7% of their income, but in many states, families are spending 10-20% of their income or more on child care for a single child.
As we learned throughout 2020, affordable child care is vital to the success of our economy. When child care is unaffordable, one parent stays home to raise kids while the other goes out to work. Otherwise, parents may rely on other family members to provide care. When child care services are affordable, both parents can participate in the labor force and child care providers thrive as jobs are created in their communities.
To shed more light on the issue of child care affordability, we published a complete breakdown of child care costs by state.
It was also in January that we began seeing reports of a novel respiratory virus on the news. As new infections popped up around the world, we couldn’t possibly have imagined how much COVID-19 would end up disrupting the child care industry. The first COVID-19 case in the US was confirmed on Jan. 20, 2020 in Washington, D.C.
February was a period of uncertainty for all of us as COVID transmission rates accelerated and case numbers grew exponentially. The U.S. government declared COVID-19 a public health emergency on Feb. 3, 2020. COVID-19 was declared a global pandemic by the World Health Organization on March 11, and on March 13, the COVID crisis was declared a national emergency in the United States.
As a result of the national emergency declaration, several states mandated closures of public schools and child care centers. Many states also directed employers to have their staff work remotely if possible. This combination resulted in parents working from home while caring for their kids or supervising remote learning.
Data from our child care trend reports show that child care center attendance was at normal levels across the country during the week of March 2, 2020. Seven days later, child care attendance was still at 97% of normal levels. By March 16, after the national emergency declaration, child care attendance fell to 32% of pre-coronavirus levels nationwide.
To help support the economy during COVID-19, our government passed the CARES Act, which was signed into law on March 27. The CARES Act included $3.5 billion in payments to states for the Child Care and Development Block Grant (CCDBG). These funds could be used by the states to fund child care centers affected by decreased enrollment, or to assist health care sector employees with child care costs.
April-June: Child Care Industry Adapts to New Rules
Child care enrollment bottomed out in April 2020, with our trend report showing child care attendance at just 14% of pre-coronavirus levels during the month. Some states were still enforcing mandated closures, while several others were only allowing the children of essential workers to use child care services.
For child care centers that remained open to serve essential workers, there were new rules and guidelines to follow for preventing COVID-19 transmission. We became accustomed to seeing child care workers wearing PPE, doing temperature checks and helping kids learn to social distance. We also saw centers take advantage of new technologies like contactless check-in to help reduce COVID risks.
Mandated child care center closures were a huge threat to our child care infrastructure. One analysis suggested that child care closures could result in the loss of 4.5 million child care slots if too many centers were allowed to go out of business. Recognizing the need for increased federal support for child care centers, congress passed the $3 trillion HEROES act, a coronavirus stimulus package that included an additional $7 billion for the CCDBG.
During May and June, many states saw reduced COVID-19 transmission and allowed child care centers to reopen. However, a lot of parents were still choosing to keep their kids at home due to fears about the virus. During the week of June 1, we saw that child care attendance in 18 states had increased to at least 50% of pre-coronavirus levels. By the end of June, as COVID transmission slowed for the summer, child care attendance was over 50% of pre-COVID levels in 28 states.
July-September: Child Care Enrollment Stabilizes, But Closures Accelerate
Child care centers never fully recovered from the mandated closures brought on by COVID-19. Between July and September, we saw nationwide child care center attendance stabilize at around 50% of pre-coronavirus levels. As child care centers generate most of their revenue from enrollment, a 50% attendance rate means that the average child care center lost half of its revenue compared to before COVID-19.
Despite the urgent need for additional child care funding, the HEROES Act passed by Congress still hadn’t been approved by the Senate. An alternate funding package known as the HEALS Act was proposed, but ultimately rejected (in part because it allocated no additional funding to states, meaning no funding for the CCDBG). By September, Democrats in Congress were drafting a new version of the HEROES Act in hopes of delivering much-needed funding for child care centers.
On July 16, now-President Joe Biden unveiled a $775 billion proposal to increase funding for child care, elderly care and disabled care over the next decade. The plan would tackle America’s child care affordability and accessibility crisis with child care tax credits, a regulatory cost-ceiling on child care, free early education and growth incentives for child care businesses.
In the last quarter of 2020, we started seeing some of the medium- to long-term effects of mandated child care closures. With child care enrollment down substantially, the National Association for the Education of Young Children (NAEYC) did a survey and found that 56% of child care centers were losing money each day they operated.
With child care centers closing due to sustained financial losses, women are increasingly leaving the workforce to care for their kids at home. Women were also disproportionately affected by pandemic-related job losses, which were widespread in female-led industries like retail and hospitality. In December, 16,000 men joined the U.S. labor force while 156,000 women reportedly lost their jobs.
On Oct.1, Congress put forward a new version of the HEROES Act, this time valued at $2.2 trillion. The act included $7 billion for the CCDBG and a $50 billion stabilization fund supporting child care center operators as they reopened. However, the revised bill still lacked support in other levels of government.
After months of negotiations, a $900 billion coronavirus aid package was approved by both Congress and the Senate on Dec. 21. It was signed into law on Dec. 28 and included $10 billion in grants to support child care businesses.
As of Dec. 30, 2020, estimates indicate that between 14 and 27% of child care centers in the United States remained closed because of COVID-19.
What’s Coming for Child Care in 2021?
Despite the challenges faced by the child care industry in 2020, we’re optimistic about the outlook for child care in 2021. With multiple COVID-19 vaccines now available, and the promise of more Federal child care assistance, we’re confident in a full recovery for America’s child care industry. Here’s what we’re looking forward to in the coming year:
- Widespread COVID-19 vaccination will increase demand for child care services as more Americans return to work, eventually driving child care enrollment back to pre-coronavirus levels.
- Decreased COVID-19 transmission will allow child care centers to scale back safety measures, reducing costs and signalling a return to normal.
- More Federal child care funding will finally tackle the child care affordability crisis, making child care services more accessible for Americans.
Leverage Expertise of Child Care Leaders
To help you take what you learned in 2020 and turn it into success in 2021, Procare is bringing together some of the child care industry’s top thinkers and leaders for our yearlong webinar series, Thrive in 2021.
For our next session, we’re hosting Louise Stoney and Sharon Easterling of Opportunities Exchange to help you take control of your child care business. They’ll teach you how to transform from a person who spends hours on administrative tasks to a business leader who can leverage business software to make data-driven decisions that can grow your bottom line. Mark your calendars for March 30th at 1 p.m. EST and register today!
Enhance the Resiliency of Your Child Care Business with Procare Solutions
The year 2020 was a pressure test for child care centers across the country. During this time, we’re proud to say that over 30,000 child care businesses relied on Procare Solutions to support timely communication with parents, digital contactless billing & payments, access to critical child & family information, and compliance with local and state regulations to prevent the spread of COVID-19.
We also innovated, releasing new features like contactless check-in/check-out to help centers protect their communities from the novel coronavirus.
As our child care industry moves toward recovery in 2021, Procare’s child care app can help your center streamline operations, save time and build a stronger child care community. With features that help you accomplish more with less, Procare enhances your business resiliency in the face of disruptive threats like COVID-19.
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