Congress is debating the Build Back Better plan, which includes a historic investment in child care and early learning. The plan includes universal pre-K and significant investments in child care that would:
- Boost the wages of early educators
- Build the supply of desperately needed child care slots, and
- Lower costs for most families by capping co-pays for those with incomes up to twice the state median income at 7%of their household income.
If passed by Congress, the Build Back Better plan would be the most transformative investment in our nation’s child care system since World War II. These investments would save families thousands of dollars annually while finally valuing the child care providers who are the backbone of our economy.
But change this important doesn’t happen overnight. During the first three years, the federal government will invest larger sums to help states build the supply of child care and gradually raise provider wages. Meanwhile, the guarantee for families will slowly phase in starting with low-income families. By the fourth year, the current policy discussion proposes that:
- All families up to twice the state median income (nationally, this is about $197,000 for a family of 4) will be guaranteed a maximum 7% co-pay.
- States will have a cost-estimation model that ensures the government will cover the majority of the cost of guaranteeing that early educators are paid a living wage and that early educators with similar credentials to elementary school teachers are paid like them.
Raising child care wages is the right thing to do. These workers—95% of which are women and disproportionately women of color—have held up our economy on poverty wages for far too long. Raising wages is also the only way to build a sustainable child care system. We have an extreme shortage of child care options in large part because it is difficult to attract and sustain a workforce on poverty-level wages.
Logically, raising wages increases the cost of care, which the bill addresses with public funding to lower the co-pays paid for by parents. To ensure the raise in worker wages does not fall on parents and families, the Build Back Better plan gradually increases provider compensation and family subsidies on the same schedule. Moreover, there are grants to states immediately to support providers in raising wages and improving quality with public dollars.
At the same time, the Build Back Better Bill dramatically expands the child and dependent care tax credit, making it available to low and moderate income families in full and increasing the dollar amount families can use to offset the cost of care. The extent to which families experience a cost increase in the early years will be largely offset by the tax credit, which is worth up to $8,000 for a family with 2 children.
There’s no question the status quo is untenable. Women continue to be pushed out of the workforce by the lack of affordable, high-quality child care. Early educators are leaving the field—exacerbating the supply crisis—as providers can’t afford to compete with big corporations competing for workers.
The question is how do we ensure that:
- providers are paid living wages;
- most families can afford child care; and
- we are building a supply so that all families, regardless of income, can find high-quality care options.
The child care provisions in the Build Back Better package overwhelmingly pass this test. It’s time to pass them into law to ensure women and the families who depend on us are included in the recovery.