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April 16, 2021
WASHINGTON, DC – On April 14, U.S. President Joe Biden addressed the nation from the White House’s Treaty Room regarding the withdrawal of troops from Afghanistan. During his remarks, he also introduced a significant $39 billion initiative aimed at revitalizing the child care industry, which has been severely affected by the COVID-19 pandemic. The administration emphasizes that these funds are crucial for fostering economic recovery and creating a more equitable future for women.
The pandemic has impacted nearly every industry, but data indicates that working women have faced some of the greatest challenges. For many parents, the unavailability of preferred childcare options translates to the inability to work. The White House’s American Rescue Plan allocates $39 billion to states, territories, and tribes to address the ongoing child care crisis exacerbated by COVID-19. These funds will assist early childhood educators and family child care providers in keeping their facilities operational. Child care is a critical issue for essential workers and caregivers, particularly women who are often the primary providers for elderly family members.
Statistics reveal that while many fathers have resumed work, mothers—especially those without college degrees—have not returned at comparable rates. This gap is projected to widen the gender income disparity by an alarming 5 percentage points. As women strive to reestablish their roles in the workforce, families with young children, particularly those of color where mothers may be the primary earners, face significant financial challenges that could linger for years.
The White House underscored the integral role women play in the labor market, noting that they contributed to 91 percent of income growth for middle-class families over the past four decades. However, since the pandemic began, around 2 million women have exited the labor force, largely due to caregiving responsibilities. Experts warn that this trend threatens to undo years of progress in increasing women’s workforce participation.
The child care sector, predominantly comprised of small businesses owned by women and people of color, is grappling with the repercussions of the pandemic. Providers have experienced declines in enrollment, while facing increased operational costs—up to 47 percent higher in some cases—for necessary health and safety measures. Even before the pandemic, many child care providers operated on razor-thin margins, making the current situation even more dire.
A December survey indicated that approximately one in four child care facilities had closed during the early stages of the pandemic, further limiting access, particularly for families of color. Many providers who remain open are burdened by debt, with two in five relying on personal credit to cover costs. The burden has also led to layoffs or pay cuts in three out of five programs. Alarmingly, one in six child care positions—often held by women of color—remains unfilled, far exceeding the one in twenty jobs lost across the broader economy.
The $39 billion package includes $24 billion designated for child care stabilization, aiding professionals in reopening or maintaining operations, ensuring safe environments, retaining staff, and providing mental health support for both educators and children. The remaining $15 billion will be allocated to states for flexible funding to enhance affordability, increase access for families receiving subsidies, improve wages for early childhood workers, and address other local care needs.
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Summary:
President Biden announced a $39 billion initiative aimed at revitalizing the struggling child care sector, which has faced significant challenges during the COVID-19 pandemic. The plan focuses on providing financial support to child care providers, ensuring access to essential services for families, and addressing the disproportionate impact on women, particularly those of color, in the workforce. The initiative aims to stabilize child care facilities and improve conditions for both employers and employees in this critical industry.