Working families in America are facing impossible choices as access to high-quality child care is increasingly beyond their reach. The crushing cost of child care emerged as a top issue in the New York City mayoral race and the same is true in cities across the country.
In New York, quality care has become unaffordable for 80% of families. The annual average cost per child has reached $26,000 and runs as high as $40,000. According to the city’s estimates, in 2022 alone, roughly 375,000 city parents left their job or reduced their work commitments due to inadequate child care access. The cost to the city is estimated at $23 billion in lost economic output, $5.9B in disposable income, and $2.2 billion less in tax revenues.
Calls for the federal government to fund child care as a universal entitlement have fallen on deaf ears, while modest federal and state tax incentives are woefully insufficient, especially to families in lower income brackets who need help the most. Many state and local governments, including New York, are prepared to step up to help subsidize the cost of child care, but scattershot funding is not the answer.
A combination of low wages for child care providers and the federal government’s mass deportation policies have resulted in a significant labor shortage that must be addressed as part of any solution to the child care crisis. Almost half of the city’s child care workers are immigrants and nearly all are women, many of them lacking secure legal status. Building the workforce is a prerequisite to any solution.
Current child care programs and employment arrangements are built around the idea that one parent, usually the mother, stays at home. School days end at 3 p.m., while the workday ends far later. Schools close for more than 40 holidays and breaks, as well as the summer months, requiring far more days off for a parent than most employers provide. Most families live out of reach of extended family, and many grandparents are still in the workforce, saving for their own retirement.
Some employers are attempting to fill the gaps by investing in on-site daycare centers, child care stipends, and flexible schedules. Recent research from Moms First and Boston Consulting Group finds that companies see returns on investment in child care benefits up to 425%. Many large employers can afford these interventions, but small businesses, which employ half of New York’s workforce, have limited ability to fund child care benefits. Employers have a role to play but will never be the primary solution.
It is time to organize a comprehensive, affordable child care system that meets the needs of the modern workforce and offers extended full-day care for all children. Failure to do so will constrain the nation’s economic potential and force families to leave expensive cities like New York.
The following are three actions that can be taken to achieve that objective:
First, build on programs that work. New York has established a free public system that provides all 3- and 4-year-old children with care based on a school day schedule that should be extended to provide all-day, full-year care at locations that are a reasonable distance from home or work. To scale this approach on the most cost-effective basis, New York should deepen its investment in Family Child Care Networks, which serve as intermediaries that recruit, train, and monitor home-based care providers.
Second, the city must invest in common sense regulatory reform. Current rules like those forcing child care providers into expensive ground-floor retail space drive up costs while limiting supply. For home-based providers, archaic rules that go beyond safety standards should be revisited in favor of streamlining licensing, inspection, and compliance for the smaller scale of these operations.
Finally, there is an opportunity to eliminate administrative complexity — saving money and making child care programs easier for parents to access. For example, an analysis by the Citizens’ Committee for Children found that only 36% of seats available to the city’s infants and toddlers program were filled due to low awareness and bureaucratic hurdles to enrollment.
New York’s next mayor inherits a $8 billion-10 billion deficit and additional federal funding cuts are likely. Cities across the country face similar fiscal challenges and will need to make tough budget choices. A systemic approach to child care that builds on cross-sectoral programs that work, invests in regulatory reform, and prioritizes efficiencies that benefit providers and families is the most practical and economic way to solve the child care crisis.
Saujani is founder & CEO of Moms First. Wylde is president & CEO of the Partnership for New York City.
