Karen Schulman, Senior Policy Analyst

by Karen Schulman, Senior Policy Analyst
National Women’s Law Center

The deepening economic recession is affecting all sectors of our economy and all aspects of American’s lives—and child care is no exception. Families are finding it more difficult to afford the high-quality care they want for their children, child care programs are finding it more difficult to maintain enrollment and stay in business, and states are finding it more difficult to fund child care assistance for low-income families.

With growing budget deficits, a number of states are proposing to make cuts to their child care assistance programs. In Oregon, there is discussion about reducing reimbursement rates paid to child care providers who serve children receiving child care assistance from the 75th percentile of market rates (the rate that gives families access to 75 percent of the providers in their communities), which is the federally recommended level, to the 65th percentile of market rates. Florida’s waiting list for child care assistance has grown to 60,000 children, and Pennsylvania’s waiting list for child care assistance is at 15,000 children. Nevada is cutting child care assistance for 450 children.

At time when families are struggling financially, these cuts make it less likely they will receive help paying for child care. And without assistance, many families have no choice but to pull their children out of child care programs they can no longer afford—depriving children of the stability that is so important for their development.

by Karen Schulman, Senior Policy Analyst
National Women’s Law Center

Friday’s announcement that another half a million jobs were lost in November—bringing the total number of jobs cut in 2008 to nearly 2 million—built further momentum for a major economic recovery package when Congress reconvenes in January. President-elect Obama has proposed an economic recovery package that would create or save 2.5 million jobs. Policymakers agree that this package must be large enough to have a significant effect on the U.S. economy, but they also want to ensure that taxpayers money is used wisely, in a way that will create jobs immediately as well as offer an investment in the future. One often overlooked area clearly meets all of these goals: child care.

Jobs in the child care sector for directors, teachers and assistants can be created immediately, and are certain to stay right here in the U.S. Child care also helps parents get and keep a job and gives them the peace of mind they need to be productive at work. The licensed child care sector allows parents to earn more than $100 billion annually—and these additional wages, in turn, generate nearly $580 billion in direct and indirect labor income, approximately $69 billion in tax revenues, and more than 15 million jobs.