Building a Better Future Through Child Care—Vermont Leads the Way

To enter Sherry Boudro’s child-care center in Windsor, Vermont, I had to visit her home. The center has a separate entrance in the back, though it’s connected to her main house by an internal staircase. The colorful room, where two fluorescent sensory swings hang from the ceiling, is lined with bookshelves and has the bright colors and well-worn look of a space for children. The house is where Boudro herself went to kindergarten decades ago. When she saw it for sale in 1992, she knew it would be the perfect place to open her own in-home child-care center.

The day I visit, Boudro is watching three boys. They finish a snack of applesauce and walk upstairs to place their spoons in the sink, before putting on snow gear to go outside and play. “My program is all about children being self-sufficient and taking care of their needs [at home] so they can be self-learners and take care of their needs in public school as well,” she said.

But though she loves the work, she has struggled to make enough money to live comfortably. At age 60, she has no retirement savings, she explains. And because Windsor “doesn’t have a lot of high-paying jobs,” she couldn’t charge families any more money, meaning she was working all the time and hardly breaking even.

For decades, Vermont, like the other 49 united states, had an individualistic approach to child care: It was up to the providers to offer and the parents to find. What has happened—and continues to happen across our wealthy country—is that too many families can’t afford or access child care, while too many providers like Boudro earn far too little for their vital work, constrained by the reality that families simply can’t pay more.

“Too many families can’t afford or access child care, while too many providers earn far too little for their vital work, constrained by the reality that families simply can’t pay more.”

But Vermont made a change in 2023, when Act 76 was signed into state law and the “collective” approach to child care began to triumph over the “individual” one. Providers like Boudro started being reimbursed by the state at higher levels, and far more families qualified for subsidies. For the first time in the state, child-care providers based out of their homes were paid equally to those who work in centers.

With Act 76, Boudro has more than doubled her income for doing the same work. She had been charging families $150 per kid per week. Now, all her families qualify for subsidies under the new law, so Vermont pays her $364 per kid per week—doing the same work she has always done. She can put that extra income toward retirement. And where before she could only afford bare-minimum maintenance, now she can make some long-awaited repairs, replacing the carpeted floors and fixing the drooping ceiling tiles.

This investment is what allows her to thrive and stay in business. It allows her to be a better caregiver to her kids and to be a provider her community can count on.

Moreover, the data supports that money invested in child care yields a good return on investment. In developing his well-known “Heckman equation,” Nobel prize-winning economist James Heckman found that every $1 invested in care returns between $4 and $16.

But despite that evidence, most of the United States lacks any comprehensive child-care policy. One reason it can take so long to bring about change is that people have deeply entrenched, often gendered views about who should provide care, and whether what has traditionally been unpaid labor deserves compensation. Confronting those outdated narratives can be hard without collective action.

The “fix it” mentality resonated with business leader Michele Asch, who serves as the chief people officer for Twincraft, a soap and lotion manufacturer located outside Burlington, Vermont. Business was thriving: COVID-19 brought about a boom in skincare products, and to meet demand, they had to hire over 180 people in 18 months. But workers couldn’t find local child care, and that affected Asch’s ability to hire and retain good employees. She recalls that one standout employee spent an hour driving each morning to drop off her kids in two different towns before heading to work, even though she lived just 15 minutes away.

In 2020, Asch met with Aly Richards, the director of Let’s Grow Kids, the organization that spearheaded the decade-long campaign to fix the state’s child-care shortage. Asch remembers asking, via Zoom: “Aly, we make skincare. Can’t I just pay into a system so we can get this child care fixed?”

But the problem isn’t so simple. It requires sustained robust investment that the state or federal government can provide to overcome structural challenges, like the large overhead costs of offering care and the high teacher-to-student ratios needed for young children.

Asch joined the board of Let’s Grow Kids and set about working to convince her colleagues in business to support Act 76. Her biggest challenge wasn’t that they disagreed with the need for child care, but that they didn’t understand why this state-organized effort was the solution. “I don’t pay individually to have our roads done. I pay into a system to have the trucks come in to pick up [our] soap,” Asch says. “[Child care] is necessary infrastructure for doing business.” Once her colleagues understood the plan, they would support it, “enthusiastically or reluctantly,” she adds.

Since Act 76 was implemented in 2023, Asch has found that more of her employees can find child care closer to where they work, with more affordable options and, as a result, less stress. With enough options for everyone to access child care, and with more money for educators to stay in the field, there’s the possibility of an economy where everyone can win—and not at someone else’s expense.

“With enough options for everyone to access child care ... there’s the possibility of an economy where everyone can win—and not at someone else’s expense.”

So why did it take so long for minds to change about the collective benefits of such investment? Child care has long been a complex social policy issue: It is part education and part parenting, but also part economics, as obstacles to child care remain a top reason that parents cannot access paid work. In fact, in message testing surrounding child care, arguments about the economic and workforce benefits are often the most persuasive.

Under Act 76, Boudro has been able to enroll more families and make more money, enabling her to reinvest in her business and herself. Her husband already had to retire due to health issues, and now her extra dollars can cover their health insurance.

But Boudro is concerned that funding may not keep up each year. Act 76 has provided an opportunity to see how collective investment can improve overall well-being for children, providers, and businesses alike. The next hurdle will be to make sure it sticks for years to come so that an economy where together, everyone thrives is in reach.

Follow The Thread! Subscribe to The Thread monthly newsletter to get the latest in policy, equity, and culture in your inbox.