The flawed child care industry in the U.S. is perpetually battling what’s known as “the trilemma” – the challenge to deliver quality, availability, and affordability all at once. And three interconnected groups find themselves caught in the middle: parents, providers, and child care workers.

These groups all share the same top priority, the care and education of children. But, under the current system, it would be tough to help one of these groups without hurting at least one of the others.

In this episode, we’ll talk to parents about making ends meet in the face of huge child care costs. We’ll talk to providers trying to keep fees affordable while still charging enough to fund high quality care and education. And we’ll talk to teachers who love their work, but don’t love the constant struggle to survive on the low pay.

JAY LINDSAY:

At the start of each year, Aisha Losche and her husband get a receipt from their provider that shows them – for tax purposes – how much they spent on child care the previous year.

It’s always an interesting number.

Losche remembers one year when she shared the grand total with a group of friends at work.

AISHA LOSCHE:

I'm like, "Yes. I have paid over $20,000 in cash to have my child be cared for while I'm here at work with you all." Jaws dropped. They're like, "You could have bought a car. You could have gone to Bali." I'm like, "I'm well aware of the different things that those dollars could have funded. My dreams of wanderlust."

JAY LINDSAY:

Most people know child care costs are steep, but just how steep can be shocking to those who don’t have to pay. And these costs matter a lot, but not just to parents like Losche.

It’s also because what parents pay for child care is the sector’s main source of revenue. And that’s at the heart of what many advocates see as the major flaw of this largely private market:

Parents only have so much money, so there’s a limit to what providers can charge them. And as a result, there’s also a limit to what providers can pay their workers.

It’s set up a situation where child care costs are a strain for most parents, revenues are insufficient for most providers, and most workers are woefully underpaid.

It also creates what child care advocates and experts call “the trilemma” of challenges for the industry – a constant tension between quality, availability, and affordability.

Child care expert Beth Mattingly, an assistant vice president at the Boston Fed, says this trilemma forces parents to make unwanted compromises in care.

BETH MATTINGLY:

Some parents have to compromise on quality so they can afford it. Other parents pay more than they really can afford and take on debt to pay for care. So, there are all different strategies, but getting that trifecta where all of those factors align and have truly accessible care, it's a unicorn for many families.

JAY LINDSAY:

This is Six Hundred Atlantic, a podcast produced by the Federal Reserve Bank of Boston. I’m your host, Jay Lindsay, and this season we’re talking about child care.

In this episode we’re going to talk with people from three interconnected groups stuck in the middle of the so-called trilemma – the parents, providers, and child care workers.

These groups all share the same priority, the care and education of children.

Under the current system, it would be tough to help one of these groups without hurting at least one of the others. What do we mean by that?

Lower rates would help parents, but providers would struggle with the loss of revenue, and worker pay could take a hit.

Raising rates would mean more profit for providers and better pay for teachers, but some parents would be priced out.

Better pay for teachers would likely be funded by raising rates on parents and could hurt providers by costing them customers.

These interdependencies are complex. But Jess Carson, a University of New Hampshire researcher and child care expert, says at least one thing about child care is simple – its business model is nearly unworkable.

JESS CARSON:

We've always known that the margin of operations is very thin and that as a business model, the industry makes nearly no sense at all.

JAY LINDSAY:

Benton, Kentucky, is a town of about 45-hundred people in the western end of the state, and it’s the home of the iKids Childhood Enrichment Center.

Jennifer Washburn is the owner/operator, and she’s run the center since she opened it in May 2000.

A therapist by training, Washburn says she went into business to help build strong families in the area.

But Washburn says the reason she’s been able to pursue what she calls her “passion” for so long isn’t because she’s cracked the secret to long-term profitability in the child care sector.

JENNIFER WASHBURN:

Well, I say to myself if I were to show up on Shark Tank, they would laugh me out of the room. There would be no way. I'm only able to provide this service, I'm only able to do what I do, because I am not the primary income source in my home. My husband has that role, has a fantastic job, and so because of him, I can do this. If that were to have at any time changed over the past 20 years, or change in the future, we would have to make some serious decisions.

JAY LINDSAY:

The small and privately run child care center, like the one Washburn operates, is one of a few models for child care providers.
Some open for business in their homes and may employ only themselves.

On the other end of the scale are providers with a corporate structure who run multiple centers in a region.

But there are constraints each one of them face, beyond the limits to what they can charge parents.

Providers are also subject to a maze of regulations that vary by state – everything from square footage per child to mandated higher education degrees for teachers.

These aim to ensure quality and safety but can come with major costs.

The most significant rules mandate appropriate child/teacher ratios – so there aren’t too many children for too few teachers.

Infants and toddlers have the lowest child/teacher ratios because the youngest children need the most intensive care. That makes these programs, by far, the largest expense in a provider’s sea of costs.

The challenge amid the competing expenses is to keep quality as high as possible.

At Julie Clark’s center in Connecticut, that effort includes a large outdoor classroom with a vegetable garden. There’s also a “sprayground” area where kids can get soaked in the summer. They call it the “car wash.”

JULIE CLARK:

So, I do everything I can do to build a high-quality place, but I don't go over that line where I don't have enough money. And the way we've worked it out, we charge just enough.

JAY LINDSAY:

Washburn says she’s always ready to step in wherever needed. That could be teaching, it could be bookkeeping. it could be fixing a toilet flapper.

JENNIFER WASHBURN:

That way you avoid calling in a plumber. I've got some mad plumbing skills. You name it, and I think I have probably done it.

JAY LINDSAY:

Though teachers are Clark’s and Washburn’s highest expense, both say they wish they had more to spend on salaries – but it’s not possible without raising fees and pricing parents out.

Clark pays some employees minimum wage, which is 12 dollars an hour in Connecticut. A few employees make 20 to 25 dollars an hour, and some administrative staff make $30,000 to $40,000 a year.

In Kentucky, the cost of living is lower and minimum wage is about $7.25 per hour. Washburn says her employees make $8 to $10 an hour.

It’s not much, so Washburn relies on other benefits to keep people around, like free child care for employees.

Clark also gives her employees free care and tries to be flexible with hours, give regular raises, and build a sense of community. It works. Some of her staff have stayed 15 or 20 years.

Still, every year she knows it’s possible she’s going to lose good people.

JULIE CLARK:

Every year in the summer, I make up new contracts for teachers, and I just pray that most of them are coming back. Teachers are your bread and butter. Without good teachers, I don't have anything. I have a building.

JAY LINDSAY:

Starting in the third grade, all Annie Pettibone has ever wanted to be was a teacher. She had a teacher then who noticed she was struggling in math and volunteered to tutor her.

It meant a lot, and she wanted to have that same impact on kids.

Years later, in college, she began volunteering at an infant classroom at Boston Children’s Hospital, and she knew where her career was headed.

ANNIE PETTIBONE:

So, my first day, I just fell in love. I was like, "Yes, this is exactly where I need to be. This is what I enjoy doing. This is my passion. This is my calling.”

JAY LINDSAY:

Still, after a decade teaching infants for The Nurtury in Boston, she admits there are days when she wonders if she can afford to keep doing what she’s doing.

Pettibone has a master’s degree and years of experience, and she makes about $41,000 a year. It’s not nearly enough to afford even the cheapest condo in Cambridge, Massachusetts, which is where she grew up, where her parents live, and where she wants to stay.

Eventually, she and her parents renovated their house to create separate living quarters. Pettibone says that allowed her to keep doing what she loves.

But she does worry. She wants kids one day. What then?

ANNIE PETTIBONE:

That weighs heavily on me because, yes, I have two degrees, and I'm getting paid more than if I didn't have a degree, but it still is just not enough.

And it's very scary to think about how I would be able to provide based off the salary I have now, when I have children of my own.

JAY LINDSAY:

Aimee Hoffman is an early child care teacher, too, and she knows what it’s like to be overwhelmed by your pay and your future.

She remembers about 20 years ago when she was a new preschool teacher with a couple of degrees, a low salary, and a pile of bills in front of her.

AIMEE HOFFMAN:

I remember crying when I looked at my rent and my salary as a young teacher and my education bills for my masters. I thought, how the heck am I going to work this all out?

JAY LINDSAY:

These first-hand worries about poor pay for child care workers are reserved almost exclusively for women, including many women of color.

Federal statistics show 95 percent of child care workers are women, and about 42 percent are Black, Asian, or Hispanic.

Hoffman has stayed in the field, working at facilities around Boston. After taking the last year off to care for a relative and her three kids during COVID-19, she’s seeking work again, and looking at about $18,000 a year for four days a week of work.

The low pay is particularly tough to manage in the high-priced Boston area.

AIMEE HOFFMAN:

So, it's taken some sacrifice to, especially my husband and I both as educators to remain in our fields. And I can't lie, I have thought about, "Oh, do I need to make a career shift?" I will have three children going into college, gulp, what do I do now?

JAY LINDSAY:

The answer for many child care workers is, “Not this.”

Estimates of annual turnover rates in the industry are around 25 percent, and it can be higher in certain places.

University of Arizona researcher Chris Herbst, a child care expert, cites a recent study of early child care teachers in Louisiana that put their turnover rate at around 40 percent – which he calls “astronomically high.”

By comparison, a LinkedIn analysis of a half billion professionals in 2018 found a 10.9 percent turnover rate across all industries.

Herbst says the high turnover rate comes at a steep cost to the quality of child care, and ultimately to the rest of us, as well.

CHRIS HERBST:

I mean, child care centers employ people not to make widgets, but to care for and tend to the needs of children during very developmentally important years. And, so, when there is a disruption to the continuity of care that kids receive because of high turnover rates, we know from the empirical evidence that child outcomes, that child well-being suffers as a result. And, so, one of the implications I think of fixing the turnover problem is that stability of care would improve, and, in turn, child outcomes would improve, too.

JAY LINDSAY:

Sarah Savage, a Boston Fed researcher and child care expert, says the high turnover is a direct result of the market’s constraints on most providers.

She says that right now, the highest quality care tends to be accessible only to the families with the most money. That’s because their providers can charge them enough to pay for top-rate staff and other features that define high quality.

But for other providers, the limits on what they can charge, and thus pay workers, makes workers harder to retain and high quality harder to achieve.

SARAH SAVAGE:

They don't have a lot left to work with to invest in quality. So, what we tend to see is mediocre or fair at best, I think partly because, or maybe a large part, because of this inability to pay child care workers and early educators wages that would ensure that they are attracting and retaining credentialed staff.

JAY LINDSAY:

For now, neither Hoffman or Pettibone plan to leave their profession. Hoffman refers to what she does as a “calling.”

AIMEE HOFFMAN:

I think what really is amazing about the young ages is that they are learning through play and their spark of curiosity. It's just so contagious. So, you feel like you're on an adventure together discovering the world.

JAY LINDSAY:

Pettibone says people underestimate her infants. She challenges them in ways that aim to stimulate the physical and cognitive development she knows is happening at a furious rate.

In February, Pettibone took her tiny charges to the Museum of Fine Arts to view the work of urban graffiti artist Jean-Michel Basquiat. Then she sent home the artwork the kids did using similar colors.

ANNIE PETTIBONE:

They are so more capable of things than a lot of people think they are.

JAY LINDSAY:

Like Hoffman, Pettibone would like to make more money. But she knows raises would come at the expense of parents, and realizes they’re in a bind, too.

ANNIE PETTIBONE:

I think the fact that the amount that they're charging for child care is such a high percentage of their own income, it's so hard for parents to figure out, "Okay. Well, if I can't afford child care, then how am I going to work? How am I going to make ends meet if I can't afford it?" It's scary.

JAY LINDSAY:

It wasn’t long after Essence Lee Souffrant learned she was having her second child that an unexpected thought entered her mind.

ESSENCE LEE SOUFFRANT:

Of course, the first thought when you find out you're having a baby shouldn't be, "Oh, my goodness. This is more daycare expenses that we will have." That's just not the best scenario, but that's where my brain went, like, "Oh, my goodness, we're going to have tons of child care to pay, at least for the next three to four years, right?"

JAY LINDSAY:

If you’re a working parent, stress about child care costs is tough to avoid, even before your kids are born.

The average annual price of child care in the U.S. is more than $9,000 per child, and it can be far more for parents who live in more expensive regions.

Souffrant lives in Malden, Massachusetts, just outside Boston. When her second child was on the way, she calculated she and her husband were looking at nearly $40,000 a year to put her baby and 3-year-old daughter into child care.

Subsidies may lower the costs for some poorer families, but not necessarily the pain. In a study before COVID-19, one think tank estimated that child care costs average 30 percent of the budget for a family of four living below the federal poverty level.

Aisha Losche and her husband are both professionals, but child care costs remain a perpetual worry. Their oldest boy has aged into public school, but another son is in preschool and a newborn daughter will need care someday soon. Like so many families, they’ll need to figure it out.

AISHA LOSCHE:

We just keep adapting. Parents are so ... I don't know if nimble is the right word, or selfless. We just do what we have to do to get it done. So, I think the government has been knowing of that and hasn't put too much time into fixing it.

JAY LINDSAY:

Souffrant wishes it would. Child care costs are a constant strain for so many, affecting different families in different ways, and there’s no guarantee all children will have access to high-quality early care.

ESSENCE LEE SOUFFRANT:

Equal access starts with quality education, quality early childhood education, and it shouldn't just be for those who can afford the best facilities. It should be a right for every family.

JAY LINDSAY:

In this episode, we looked at three groups struggling to make the child care system work for them. In the next, we’ll focus on a particular group that’s disproportionately impacted by its problems: women.

When the industry contracts or its workers are underpaid, it primarily affects women because nearly every worker in child care is a woman.

The single parents who can’t work if they don’t have child care are also overwhelmingly single mothers.

And the gender wage gap, which generally sees men as the highest earners in families headed by a married man and woman, also has a major impact. It means when child care becomes inaccessible or too expensive and one parent needs to step back from their career, it tends to be the woman.

A more comprehensive child care system could lessen these impacts on women, and some child care advocates say that’s exactly why it hasn’t happened.

MISTY HEGGENESS:

I believe that if we had leaders in power who were predominantly women, we would have right now a child care package tasked and being implemented.

JAY LINDSAY:

But if the flaws of the current system hurt women more, is it possible that the future of child care will be imbalanced in a different way?

Are we overvaluing work? Are we underestimating how important motherhood is to our children and ourselves? Some say yes.

ERICA KOMISAR:

We devalue mothering. We devalue mothering in our culture. We devalue mothering, as women, we devalue mothering. If we don't stop devaluing mothering, we're heading in a very, very bad direction.

JAY LINDSAY:

That’s next time on Six Hundred Atlantic.

JAY LINDSAY:

Thanks for listening to Six Hundred Atlantic. Please check out all five episodes of our second season. You can find our first two seasons and subscribe to our mailing list at bostonfed.org/six-hundred-atlantic. Listen and subscribe to Six Hundred Atlantic on Apple Podcasts, Spotify, Stitcher, and TuneIn.

The producers would like to thank our contributors for their time and insights. They are Jess Carson, Julie Clark, Misty Heggeness, Chris Herbst, Erica Komisar, Aisha Losche, Aimee Hoffman, Beth Mattingly, Annie Pettibone, Sarah Savage, Essence Lee Souffrant, and Jennifer Washburn.

This had been “A Private Crisis,” the second season of the Boston Fed’s Six Hundred Atlantic podcast.