Analysis Law and Policy

Child Care Increasingly Expensive, Even as Public Assistance for Low-Income Families Declines

Sheila Bapat

If we still need more evidence that reproductive freedom is an economic issue, the challenge of affording child care is ripe for discussion.

The Huffington Post reported on Tuesday that parents are increasingly afraid of losing their jobs if they need to care for their sick child. The story—which correctly makes a plug for more paid sick days—points out that when a kid gets sick, her parents typically need to pull her out of child care and stay home with her.

But this story assumes that child care is accessible to begin with. Recent trends show that paying for child care, which can cost anywhere from $4,000 to $15,000 annually, is becoming more challenging for low-income Americans. If your job is among the 50 percent of American jobs that pay just $34,000 per year or less, covering child care expenses can be a serious challenge.

If we still need more evidence that reproductive freedom is an economic issue, the challenge of affording child care is ripe for discussion. While there are public resources to help working parents pay for child care, new research shows that these resources are not as robust as they used to be. Earlier this month the National Women’s Law Center issued a report showing that 27 states had at least one child care assistance policy decline in its ability to serve low-earning Americans as compared to the year prior.

The NWLC report studies a range of state policies that affect access to child care subsidies for low-income Americans, including income eligibility limits to qualify for child care assistance, co-payments, reimbursement rates for child care providers, waiting lists, and eligibility for assistance for parents searching for a job. According to the NWLC’s report, these policies “are critical in determining families’ access to child care assistance and the extent of help they receive from that assistance.”

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Most states fell behind where they were in 2001 in at least one of these areas. There was brief reprieve in 2009-2010 when American Recovery and Reinvestment Act (ARRA) funds were applied to child care assistance, but ARRA funds have since dried up.

Why the changes in state child care policies between 2011 and 2012? States’ budget crises are the primary culprit, but the variance from 2011 to 2012 also stems from the fact that funding for child care assistance comes in the form of block grants: the Child Care and Development Block Grant (CCDBG) and Temporary Assistance for Needy Families (TANF). Block grants allow states flexibility in disbursing the funds as they see fit and relative to their fiscal situation. (By contrast, categorical grants like Medicaid may only be spent for narrower purposes.)

“States have flexibility and are not required to set income eligibility limits at a certain level, they’re allowed to have waiting lists, and vary their child care assistance in other ways,” Karen Schulman, Senior Policy Analyst at the National Women’s Law Center, explained. “So when resources are tight they’ll pull back and leave families without assistance they used to receive. In that sense the flexibility of block grants can have a downside.”

The structure of child care assistance funding does give states the freedom to pinch the working poor, but the changes in child care assistance policies are really about states being forced to make tradeoffs due to particularly severe budget woes—including the fact that the overall federal resource pie for child care assistance has shrunk in the last decade. According to the NWLC, TANF and CCDBG together yield $8.170 billion in 2012—when adjusted for inflation, this comes to a bit less than 2011’s child care assistance funding and about $2.5 billion less than 2001 when adjusted for inflation.

As a result, states attempt to cut costs by making some child care assistance policies stricter while loosening others. For example, Massachusetts increased its income eligibility limit in 2012, enabling a family of three earning up to $42,025 to qualify for assistance, a slight increase from 2011. But Massachusetts’ waiting list for child care assistance has also gone up about 60 percent in that time. On the other hand, Louisiana reduced its income eligibility limit to $35,868 for a family of three from $37,896 in 2011, but Louisiana does not have a waiting list meaning eligible families won’t have to wait to receive assistance.

“States are making trade offs, within their child care programs as well as among many programs,” Schulman said. “And all of these programs tend to help a lot of the same families.”

The “same families” being the working poor. We’re not going to see Kourtney Kardashian’s name on a child care assistance wait list.

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Reproductive rights are a public health issue. That's a fact.

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