HIGH-QUALITY CHILD CARE IS THE BIGGEST missing element in welfare-to-work efforts. Despite additional funding under welfare reform, the care available to most low-income women and their children is usually custodial and unreliable. Many former welfare recipients themselves work providing child care--at low wages in unstable employment. So upgrading child care would actually serve three related goals: It would provide a key work support for mothers. It would improve outcomes of at-risk children. And it would raise the earnings and career horizons of many people formerly on welfare, serving as a model of how to upgrade low-wage work.
Unfortunately, Congress neither acknowledges the need nor provides adequate funds. The 1996 welfare law consolidated four federal child-care programs into block grants to states under the Child Care Development Fund. Total federal and state spending on child care roughly doubled between 1996 and 2000. In 2001 the fund committed $4.5 billion to child care for people transitioning from public assistance while working or attending classes. Yet with more low-income mothers in the paid workforce than ever before, demand grossly exceeds supply and the majority of eligible children are not receiving subsidized care.
To stretch limited funds, most states have placed income-eligibility limits on child-care subsidies, some as low as just 40 percent of the poverty level. Most states also require co-payments from families, making many child-care options unaffordable to low-income mothers. States tend to reimburse providers at less than the cost of care (typically 75 percent of the market rate). So many available programs won't accept government vouchers because they cannot maintain quality at these below-market rates, further limiting options for low-income families.
Consequently, the average single mother earning the minimum wage spends 38 percent of her income on child care for one child, according to Mathematica Policy Research, Inc. Earning more money does not solve the problem, because improved incomes make mothers ineligible for subsidies.
One hidden source of subsidy is the low wages of women who work in child care. As expressed by the National Women's Law Center report Be All That We Can Be, government underfunding means that "the system is subsidized by caregivers who forgo decent wages and benefits, children who experience long-term developmental effects of poor quality care, and employers who bear the costs of an unstable workforce and absent and distracted workers worrying about their children's care."
Child care in America remains literally a cottage industry. About 45 percent of children who receive subsidies are in child care delivered by relatives or so-called family day care (in which a parent, usually a mother, takes in a few of her neighbors' children for a fee). Many low-income families use home-based care because it is cheaper, because it is nearby, or because it is the only option available for parents working nights, weekends, or rotating schedules. (About 43 percent of women with a high-school diploma or less work nontraditional hours.)
Child-care regulation is minimal. Only 16 states require home-based providers to be licensed. For centers, licensing may be triggered by the number of children in care or by the number of days per year the center operates. Where they do exist, regulations mostly address health and safety standards and teacher-child ratios, but do not set educational standards. Thirty states have no training requirements for workers. Only six states prescribe preschool curricula. Enforcement of even these scant regulations is minimal. States vary from requiring inspections more than once a year to once every five years. In many states, inspectors have large caseloads that make thorough inspections impossible and only extreme violations are sanctioned.
THE CHILD-CARE LABOR MARKET
Jobs in child care are projected to grow by 42 percent between 2000 and 2010, almost triple the rate of growth for the economy as a whole. …