Parents forfeit employment opportunities and wage increases to become eligible for childcare assistance
In the United States, Amy Lee Funes, a single mother living in Harlem, found herself struggling to afford child care for her son, Leo, who had been diagnosed with autism the previous year. With a low salary of $35,000 per year, Funes was eligible for government-funded child care subsidies according to federal guidelines, but faced a series of challenges that left her without the assistance she needed.
In 2019, Funes applied for a subsidy but was denied due to her income being just above the cutoff. New York, like many states, follows federal guidelines that families are eligible for child care subsidies if they make up to 85 percent of the state median income. However, Funes made about $98 too much each month to qualify.
The limited access to child care subsidies in the U.S. is largely due to limited funding, state flexibility in eligibility rules, and capacity constraints such as waitlists. In FY2021, although 11.5 million children were federally eligible, only about 1.8 million children (15%) actually received assistance. Under state-specific rules, 8 million children were eligible, with 22% receiving subsidies. Some states, like Virginia, have established waitlists due to the mismatch between the number of applicants and available subsidy slots set by state budgets.
This limited access disproportionately affects families with lower incomes and particularly women, who often bear the primary caregiving responsibilities. Black and Latino families, who are overrepresented among those eligible due to economic inequities, face significant barriers to accessing subsidies. The shortage in subsidy availability places financial and logistical stress on families, which can force women to reduce work hours or leave the workforce altogether, perpetuating economic disparities.
In 2020, New York received a waiver from the phase-out requirement for child care subsidies due to the pandemic, but much of the world, including most child care programs, temporarily shut down. Funes qualified for a subsidy in early 2020, but her son's care was interrupted as the programs closed.
Post-pandemic, it's been a mixed bag, with some states becoming more generous, while others have walked back pandemic-era changes that made it easier for families to get and keep subsidies. For example, New York City has expanded the number of children who receive child care subsidies from 9,000 two years ago to 46,000 this year. On the other hand, states like Ohio and Arkansas have set vastly different income cutoffs for subsidies, with Ohio's cutoff being about $17,000 higher than Arkansas's.
Funes found a seasonal job as a cashier at a large New York City department store in fall of 2021, earning about $15 an hour. However, this income still left her just above the cutoff for a subsidy. Frustrated and with no other options, Funes planned to leave her job and go on public assistance to access a subsidy.
This federal rule passed in March requires states to cap the co-payment families pay to a provider at 7 percent of a household's income, but it came with no additional funding. As a result, states often have to make difficult choices with the money they have for child care assistance.
In summary, limited funding, state discretion, and capacity constraints limit subsidy reach, which in turn exacerbates economic and racial disparities and disproportionately burdens families and women through increased financial strain and reduced labor force participation. Efforts to expand access to child care subsidies and improve the quality of care are ongoing, but progress has been slow.
- The lack of adequate funding, coupled with state flexibility in eligibility rules, and capacity constraints like waitlists, has resulted in a significant disparity in child care subsidies, with only 15% of the federally eligible children actually receiving assistance.
- Inequality in access to child care subsidies disproportionately affects families with lower incomes, particularly women, and racial minorities like Black and Latino families, further perpetuating economic disparities.
- Despite some states' efforts to expand access to child care subsidies post-pandemic, progress has been slow, and many families, like Amy Lee Funes, still struggle to qualify due to limited funding and state discretion in eligibility rules. In the realm of education-and-self-development and general-news, this issue highlights the ongoing challenge of ensuring equal opportunity and reducing inequality in lifestyle.
