40 Percent of Daycares Will Permanently Close Without a Bailout

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As offices across the country continue reopening, working parents might be left with a very big question: Who will watch their children?

That’s because 40 percent of childcare centers are at risk of closing permanently in the coming months if they don’t receive an infusion of cash from the federal government.

That’s the finding from a new survey by the National Association for the Education of Young Children (NAEYC) of more than 5,000 childcare providers from all 50 states, as well as Washington, DC, and Puerto Rico.

As of right now, 18 percent of childcare centers and 9 percent of family childcare homes remain closed, but that number is likely to grow without financial assistance for the industry, which is struggling with declining enrollment. According to the report, 63 percent of programs across all settings expect to be operating at or below 80 percent of enrollment past the end of this summer, a trend that puts them in a financially perilous position. If they’re correct about those low enrollment numbers, without aid, 7 percent of centers can expect to close this month, another 22 percent more by September, followed by 23 percent more by December and another 29 percent more by June 2021. That would leave just 18 percent of centers still operating by July 2021, a staggering decline.

And while revenues have decreased, centers are also incurring substantial additional costs for cleaning supplies (92 percent), personal protective equipment (81 percent) and more staff (72 percent), so they can maintain small and consistent groups of children.

During the first round of federal relief packages, only certain providers in the childcare industry—deemed essential by the government—received aid, in the form of the Paycheck Protection Program for small businesses and through the CARES Act relief package, which gave $3.5 billion to the childcare sector. Other industries received far more from the package, including the airline industry ($25 billion) and transit and transportation ($72 billion).

Democrats in the House and Senate have introduced the Childcare Is Essential Act, which would provide $50 billion to stabilize the childcare industry, but Congress will need to act to make that a reality, says Julie Kashen, a senior fellow and director for women’s economic justice at the Century Foundation. “I worry even if Congress acts, it won’t be enough. We need $9.6 billion a month to address the needs of essential workers and keep the sector alive, not to mention a significant investment for the future of childcare.”

Some childcare centers have braved the pandemic by following strict guidelines and relying on public funding. With those funds set to expire, they will have to make tough decisions. Jamie Bonczyk, the executive director of Hopkins Early Learning Center (HLEC) in Hopkins, Minnesota, said that if they continue without Congress’ help for the rest of the year, they’ll be losing nearly $300,000 in revenue.

With “COVID-full” group sizes of only 10 kids per cluster, HLEC isn’t able to help all of the families that rely on them without asking for higher tuition that many of their parents can’t afford.

Even before the pandemic hit, affordable, high-quality childcare was difficult to come by. More than half of Americans live in “childcare deserts,” areas where there are either no licensed childcare providers for children under the age of 5 or there is less than one slot in a licensed childcare center for every three children under 5, according to a 2018 report by the Center for American Progress.

“There was a childcare crisis that already existed pre-COVID,” Jamie said. “For children to have access to high-quality care—we’ve already said it’s essential—we need to fund that so that families have predictable, stable environments to bring their children to while they’re at work. And we need to continue to fund it that way so that we’re prepared for what comes next. Healthy children mean healthy communities. If daycares continue to close, this will not be an issue for one year; this will be an issue for decades.”

Flora Gee, director of Greenbelt Children’s Center in Greenbelt, Maryland, said that if their center had stayed open since Mar. 13, when they first closed, they would’ve been put out of business months ago. With only eight weeks worth of the PPP loan, Flora has made several preparations for reopening on Aug. 10. There will be health checks for children and their families, PPE for staff, and plans to ensure teachers are staying with the same specific kids. It’s something she’s never experienced in her 40-plus years as a childcare provider.

“No one got into this business to make money. We’ve dedicated our lives to helping families and children, and it is so painful what is happening right now. Somebody needs to shake Congress and get their attention,” Flora said. “Childcare is the backbone of society and we need their help.”

If daycares shutter, working moms will suffer. Evidence suggests moms are more likely than dads to leave the workforce when childcare is hard to find. One recent survey found that over a quarter of parents are planning to take a break from the workforce or quit their jobs entirely due to the COVID-19 crisis. The childcare crisis threatens to turn a generation of working moms into unpaid caregivers, especially as school districts around the US announce fully or partially virtual schooling this fall. Working families will need childcare more than ever. Let’s hope lawmakers realize it.



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