Will We Ever Solve the Childcare Crisis?

Originally Appeared in Boston Magazine
By: Mike Damiano

August 26. 2021

Will We Ever Solve the Childcare Crisis?

We live in one of the most innovative and progressive regions in the country—not to mention one of the richest. Yet Massachusetts is also the state with the most expensive childcare in the nation, which is crippling families, mostly working moms. Will we ever figure out how to solve the childcare crisis?

Every weekend, from the summer of 2018 until the start of the pandemic, Ana Lavour had a ritual, albeit not a very relaxing one. Whenever she could steal a free moment—usually when her toddler son, Alarik, was engrossed with his toys or napping—she’d sit down at her kitchen table to balance the books. Glancing back and forth between her laptop screen and a calculator, she worked out whether she was on track to make rent for the month. It was always a nail biter.The issue wasn’t that she lived in an extravagant home: She paid $1,300 a month for two bedrooms in an East Boston apartment that she and Alarik shared with roommates to make ends meet. The problem wasn’t her income, either. She made almost $70,000 a year as a bartender in the Back Bay, placing her squarely in the middle class and just below the city’s median household income. The wrench in her financial gears? The insanely high cost of childcare: It was costing Lavour nearly $400 a week—fully 40 percent of her take-home pay.

Each week, she also transferred $300 from her checking account into a savings account that she used for only one purpose: to sock away money for the month’s rent payment. It was one of her safeguards against the scenario that sometimes kept her up at night—that if she missed just a few work shifts, she and Alarik would have no place to live.

By most reasonable measures, Lavour had made it. She came to the U.S. from Colombia in 2015, and had a good job and a healthy son. The inconvenient fact she hadn’t accounted for was that Massachusetts, where she’d happened to settle, is the state with the highest average cost of childcare—even when adjusted for our relatively high incomes. For four-year-olds, it runs about $15,000 a year, and for infants, the price tag is $21,000, and upward of $30,000 a year in Boston.

The burden of this expense cast a long shadow over every aspect of Lavour’s life. A simple trip to the grocery store was a protracted exercise in stretching dollars to maximize calories. She didn’t own much apart from the spare furnishings of her and Alarik’s bedrooms. Then there was the constant arithmetic as she tried to calculate whether she’d come out ahead if she hired a nanny so she could pick up overtime shifts. The whole situation seemed absurd to her. “My stress levels were sky high,” she says. “I could never take a day off. I could not allow myself any free time. I needed help.”

This isn’t just Lavour’s story. Across Massachusetts, the childcare system is in a state of crisis. It fails parents because it’s so expensive. It’s also not working well for childcare workers, who are scraping by on bottom-of-the-barrel wages. And it is terrible for employers, who see talent hightailing it out of the state—or refusing to move here in the first place—because of how expensive daycare and preschool programs are.

It’s been this way for a long time, of course. But when the pandemic hit and childcare centers shut down—leaving legions of parents across the state with no one to look after their kids while they reported to essential jobs or struggled to work from home—both caregivers and employers began to realize the situation couldn’t be ignored any longer. Now, an ambitious bill that would create a framework for the state to fund affordable childcare is currently wending its way through the State House. At the same time, a formidable coalition of more than 80 of our most powerful corporations—led by high-profile business leaders—have come together to lobby for state-subsidized childcare. “It’s an opportunity for Massachusetts to lead the same way we’ve led before on big, difficult issues,” says Linda Pizzuti Henry, CEO of Boston Globe Media Partners, one of the leaders of the business coalition. “We were the first to legalize gay marriage. We were the first to figure out how to provide health insurance to more people. We can take this on.”

For all of these reasons, we find ourselves faced with a once-in-a-lifetime opportunity: to go from being the state with the most expensive childcare to the one that revolutionizes and reinvents the way an entire nation cares for its future generations.

Ana Lavour, pictured here with her son, Alarik, once struggled to make ends meet because of the high cost of childcare in Massachusetts.

Unless you find yourself at one of the extreme ends of Massachusetts’ economic spectrum, you are in a terrible bind when it comes to childcare. If your earnings fall below the low-income threshold, the state will cover much of your bill with a subsidy. If you’re wealthy, you probably aren’t sweating it too much. But the overwhelming majority of Bay State families are caught somewhere in between. Like Lavour, armies of parents struggle every day to figure out how to pay for childcare. For countless others, the struggle is figuring out how to make do without it—because although forgoing childcare altogether can often improve a family’s finances, it undoubtedly comes at a cost to parents and kids alike.

Take Michele Horn. A mother of one, she bought into the idea that she could have a family and a career she loves in the nonprofit sector. So it would seem wildly uncharacteristic for her to be considering leaving the workforce altogether, but that’s suddenly a possibility.

The reason? Horn and her husband have begun to talk about expanding their family. It didn’t take long for them to realize what putting two children in daycare would do to the take-home portion of Horn’s $65,000-a-year salary; it would suck up almost all of it, leaving her with little to show for her hard work. Her mind reels with the choice she has to make. It seems absurd to work for so little, but she knows that leaving the workforce would be detrimental to her career advancement and her earning power down the road. “It’s a conversation my husband and I are going to have to have,” she says.

It’s not just parents’ careers—women’s in particular—that suffer when the cost of childcare is prohibitive. Parents such as Kaela Mento have learned that children can suffer, too. Like most families in Mass-achusetts, the cost of full-time childcare would have been a serious burden for her and her husband, James. In their case, however, they had an option other than one of them leaving the workforce. Mento was a longtime server at Oleana in Cambridge, so he was available to care for their children during the day. But when their eldest child was about to start kindergarten after spending nearly every day at home since she was born, they realized she had missed out on a lot of socialization. So they dug into their savings to send their three-and-a-half-year-old to preschool a few mornings a week so she wouldn’t be in the same position as her older sister. “We would definitely, if money were no object, have sent them both to daycare when they were three,” Mento says, “for the social opportunity and intellectual opportunity to get out of our bubble.”

Research supports Mento’s instincts. Preschoolers and even toddlers can make huge developmental strides when enrolled in childcare, which industry insiders prefer to call early education precisely because of the results it produces. In fact, studies show that those who receive high-quality early education as toddlers become healthier, happier, and more successful adults than those who don’t. They are less likely to be incarcerated, more likely to graduate from high school, and less likely to become parents as teenagers. Not only that, but they also make more money. The results are even more pronounced among children from low-income families.

What all of this research indicates is that public funding of childcare is not just a way to alleviate financial stress for parents, but also a sound investment for society, in the same way primary and secondary education is. It’s hard to imagine state governments telling parents to simply figure out their children’s K–12 schooling on their own; instead, we have a state-funded, highly organized system that provides that service. We have no such thing for early education. And that’s not just failing parents and kids. It isn’t working for childcare businesses, either.

Lauren Cook has also spent many hours a week trying to do her own kind of mathematical jujitsu with her expenses. Seated in her office, where kids’ artwork hangs on the walls, she sorts through the numbers and plays out scenarios, but no matter how hard she tries to balance her childcare books, she sees red. Most months what she spends exceeds what she takes in. Cook, though, isn’t trying to figure out how to afford care for her child; she is trying to figure out how to keep the childcare center she runs in business. That’s the crazy part of all of this: Childcare isn’t expensive because providers have found a lucrative business with high demand where they can make a killing. They, too, are just barely skimming by, and their employees, the people to whom we entrust our children, are woefully underpaid.

Cook runs the nonprofit Ellis Early Learning in the South End. The parents who flock to her doors at morning drop-off come from all walks of life, from those who receive tuition subsidies from the state to wealthy South Enders paying full freight, which starts at about $365 a week for summer. At first glance, this might seem like a financially sound system: government money making up for the shortfall of serving families who can’t afford to pay. But that is not even close to being the case.

Cook is losing money on low-income clients (the subsidy, plus what the parents pay out of pocket, covers only a fraction of the cost of serving one child), and what she makes on full-price kids covers just over the cost of caring for one child. Like so many other childcare executives, Cook believes she can’t increase the price any further. It is already straining the budgets of many Ellis families. So on top of her other duties, Cook must also fundraise $1 million a year just to keep the books balanced. She feels like she is furiously treading water and just barely staying afloat.

Once again, in Massachusetts, the situation is far worse than in most states. The costs of labor, facilities, and essential goods such as food are higher here than the national average. Then there are our strong regulations. The government requires, for example, that childcare providers maintain a ratio of one teacher for every three infants in a classroom. That means providers are shelling out enormous sums for payroll even though workers make just over half of what K–12 teachers make, according to national statistics. “Essentially,” says childcare advocate Brendan Fogarty, “early educators are paid with hugs and kisses.” Unfortunately, that just doesn’t cut it. The low wages lead to a high rate of turnover in most facilities, which decreases the quality of childcare and drives up costs because providers must frequently hire and train replacements.

No one is clamoring for weaker regulations, however. If there is one area where a nanny state is truly a good thing, it seems, it’s when it comes to nannying. Childcare advocates say Massachusetts’ regulations ensure safety and are in line with industry best practices. The problem is that the government does little to make sure that complying with those regulations is financially viable.

It isn’t just the expense of childcare that’s problematic. There’s also the issue of distribution. Traditionally, there hasn’t been a childcare supply problem. There are just about as many kids who need childcare as there are seats available. And, Massachusetts’ lowest-income families have access to childcare subsidies. The problem is that the seats are concentrated in wealthier urban neighborhoods and in the suburbs. Even before the pandemic, half of Massachusetts families lived in childcare deserts, defined as communities where there are more than three children for every available seat. Low-income parents—whose children stand to gain the most from high-quality early education—disproportionately live in these “deserts,” leaving them unable to access childcare. These are the kids who keep childcare advocate Sarah Muncey up at night. “We can’t just close the achievement gap in K–12 schools,” she says. “When children’s brains are forming from zero to five years old is absolutely when we can make the biggest difference.”

This problem is what led Muncey and her friend Lauren Kennedy, wife of former U.S. Representative Joe Kennedy, to team up and in 2017 form Neighborhood Villages, a nonprofit that advocates for government support for early education. Perhaps the pair’s most consequential initiative, though, is something called the Neighborhood, a network of childcare centers that they launched soon after with the goal of demonstrating what a real system for early education could do to shore up struggling facilities and keep down costs for families.

As Kennedy explains it, the current “system” of mostly independent, small providers isn’t working, because it prevents any one childcare center from achieving economies of scale. “We like to call it a childcare or early-education system, but it’s not,” she says. “It’s a small-business market, a failed business market.” By contrast, the Neighborhood takes on much of the responsibility for its five member centers’ operations and human resources, allowing center directors to focus their energy where it matters—on the kids.

When they launched the program, Muncey and Kennedy believed that pooling the resources of multiple child-care providers would also better position members to weather an emergency. And then the mother of all emergencies hit in March 2020 and proved their theory correct: After enduring months of COVID-related shutdowns, Ellis—which saw its fortunes improve after joining the Neighborhood—and the other four centers in the network are all still in business.

Despite the success of this and other initiatives like it, neither Muncey nor Kennedy—nor just about anyone else who has thought deeply about how to fix the childcare crisis—believes that the nonprofit sector is the solution. For a truly affordable and accessible early-education system, it’s essential to have government funding, they say. It’s an idea that may have finally found its moment.

Childcare advocate Lauren Kennedy, Eastern Bank CEO Bob Rivers, and former Mayor Marty Walsh have all worked to secure more government funding for early education. / Photo by Mike Coppola/Getty Images for RFK Ripple Of Hope (Kennedy); Greg M. Cooper/Greg M. Cooper Photography (Rivers); Department of Labor/Shawn T. Moore (Walsh)

A few years ago, Linda Pizzuti Henry received a phone call from a fellow local CEO excited to pitch her his big new idea. As it turned out, Eastern Bank honcho Bob Rivers had no interest in discussing business dealings; instead, he wanted to know if Pizzuti Henry would be interested in helping fix a little problem called the childcare crisis. It would be a way, Rivers told her, to advance more women in the workforce and add diversity to the leadership of Boston’s top companies.

Pizzuti Henry, a working mom herself, immediately saw how the issue fit into her broader goal of helping to remake Massachusetts into the land of opportunity it was for her immigrant family. She eagerly jumped on board, as did MassMutual CEO Roger Crandall; Bridget Long, the dean of the Harvard Graduate School of Education; and Jon Bernstein, regional president of PNC Bank. Their first order of business? Convincing other corporations across the state to form a business coalition that would push the state government to fund early education for all children from birth to five years old.

When the pandemic hit and the local childcare system collapsed, Rivers knew it was time to go public with the initiative they had been quietly building. The Massachusetts Business Coalition for Early Childhood Education publicly launched in February; not long after, Rivers and Pizzuti Henry hit the interview circuit making the case that now, more than ever, was the time to get serious about tackling this enormous problem. Behind the scenes, meanwhile, executive director Tom Weber—the former top adviser on early education to Governor Charlie Baker—reached out to his contacts in the government to lobby for policy changes, getting the ear of his former boss. Baker, in turn, has convened a commission to study the economic impact of early education and provide suggestions to the legislature on potential reforms.

At first blush, it might seem surprising to see the region’s business elite advocating for more government spending and increased participation in social issues, even in a progressive state like Massachusetts. But if it wasn’t obvious to corporations before the pandemic, it has become crystal clear now: The workforce that our businesses depend on depends on childcare. When there aren’t affordable options, employers have a smaller pool of workers to hire from, employees with children are less productive, and there’s more turnover. “For businesses to thrive here, we need to make sure that employees can thrive here as well, to live and work and take care of their families here,” Pizzuti Henry says.

Although no sophisticated economic modeling on the impact of universal childcare has been conducted in Massachusetts, based on studies from Tennessee and Washington, Weber estimates that the local economy would get an annual boost of anywhere from $1 billion to $2 billion if such a plan were implemented. The state government’s coffers stand to make out even better. It’s estimated that every dollar the government invests in early education yields a return of around $5 to $15 from increased tax revenue and decreased costs of welfare and incarceration. These figures aren’t the products of a few interested advocacy groups. Dozens of economists examining this issue over the past decade have come to the same conclusion: From the standpoint of cold arithmetic, there are few better investments of public money than early education.

Not surprisingly, it wasn’t just the business coalition that knew the moment was ripe to push for state-funded childcare. In a separate initiative, a group of progressive activists and early-education leaders called the Common Start Coalition unveiled a bill it had been working on that would create a framework to make childcare available for all Massachusetts families at affordable rates. It was the kind of hyper-ambitious progressive proposal that, under normal circumstances, might attract some media attention before dying a quiet death on Beacon Hill. But given the dire state of affairs, the bill took off almost immediately. Within months, more than half of Massachusetts legislators had signed on as cosponsors.

More than ever before, it seems, officials in state government are listening, and the future for families here suddenly seems much brighter. Lavour recently got a taste of what that future might look like. In July 2020, she opened her email to find a message from her preschool saying that Alarik’s classroom had been randomly selected for inclusion in Boston’s universal pre-K program. It is a program that has not yet lived up to its name or former Mayor Marty Walsh’s goal for it—to make subsidized pre-K available to all of Boston’s four-year-olds. By the time he left for Washington, however, Walsh had managed to increase the number of subsidized pre-K slots by 40 percent. Despite the large gains, the program only has the capacity to serve roughly half of the city’s four-year-olds. So when Lavour read that email and felt like she had won the lottery, she was right. Soon after, when she received her tuition bill, she could hardly believe what she was looking at. The balance due was no longer $385. It was $90. Just like that.

For Lavour, the change in fortunes was nothing short of transformative. She no longer needed to work overtime to make ends meet. In her new free time, she finally did something she’d been wanting to do for years: change careers. She polished her résumé and got a sales job with a marketing firm that allows her to work normal business hours and spend evenings at home with her son. Thanks to the savings from Boston’s universal pre-K program, budgeting no longer feels like a high-wire act. She knows she’ll make rent at the end of the month, even though she now lives in a more expensive two-bedroom house and no longer has roommates. She’s even saving, something that was impossible when she was spending 40 percent of her income on childcare.

There are intangible benefits, too. The pace of her life is no longer so frenetic, and her stress levels are no longer sky high. On a recent Saturday afternoon, she and Alarik packed up on a whim and went to Houghton’s Pond beach in the Blue Hills Reservation. As she watched her son play in the sand, she had a funny feeling, like she had started living someone else’s life. Thinking about how things had been before she got the subsidy, Lavour realized this was the first time in as long as she could remember that she felt like she could really, truly relax.

Related: How to Pick the Best Childcare Option for Your Family