In Effort to Entice Child Care Staff, More States Follow Kentucky’s Lead

It’s difficult to go a week without reading a story in the news about the critical worker shortage affecting the child care industry. While the positive news is that child care employment has finally reached and even slightly exceeded the pre-pandemic numbers of February 2020, the headlines make it clear that the nation still has a long way to go to have a sufficient supply of child care staff to meet the current demand. Across the nation, from Connecticut to Minnesota to California, the story is a familiar one: classrooms shuttered and working parents left scrambling due to a child care worker shortage caused predominantly by the low wages and poor or non-existent benefits that are typical of the industry.

In late 2022, Kentucky came up with a novel solution for enticing child care staff back into the field: making these workers automatically eligible for child care subsidies for their own children. Under the program, employees of licensed child care centers or family child care homes in the state who work 20 or more hours per week are automatically eligible for child care subsidies via the state’s Child Care Assistance Program regardless of their total household income. Put simply, if you work at a licensed child care provider, you’re eligible for child care assistance.

“They were turning away families because they didn't have teachers to fill up those classrooms,” says Sarah Vanover of Kentucky Youth Advocates. “If you're struggling to pay your bills, and you see how these other organizations are increasing their starting pay, people were leaving to go into retail and hospitality.” After one year of the program’s operation, 3,200 parents employed in early care and education and a total of 5,600 children had benefited from the program. While the state is currently funding the benefit with federal COVID-relief dollars, those funds must be spent by September, so the state is exploring how to sustain the program without federal assistance. The Horizons Act, a $300 million child care bill currently under consideration by the state Legislature, includes a provision that would keep the benefit intact.

While Kentucky was the first state to make child care staff automatically eligible for subsidies, about a dozen states have followed the lead of the Bluegrass State and either implemented a similar policy or are actively considering it, including Arkansas, Massachusetts, Oklahoma, Nebraska, Maine, Arizona, Iowa, and Washington State. It is estimated that about 234,300 child care workers with children under the age of six and 294,000 children would benefit from the Kentucky model if all 50 states plus D.C. implemented a similar policy.

Rhode Island has committed $4 million in CCDBG funds to operate a one-year pilot of the model. “We heard about the Kentucky model and it immediately seemed like a really good idea to advocates in Rhode Island,” says Leanne Barrett of Rhode Island KIDS COUNT. Unlike Kentucky, Rhode Island’s program doesn’t make all child care staff eligible for subsidies, but it does make it easier for these workers to qualify by raising the family income cap from 200 percent of the federal poverty level to 300 percent. Implementation of the program began in August 2023 and, as of January, 257 staff members and 357 children had benefited. About half of centers and five percent of licensed family child care homes have at least one staff member participating in the program.

The state is hoping to extend the pilot past its expiration date of June, and some advocates would like to expand the program to include individuals who provide early intervention services. “We’ve had a waiting list for early intervention since November 2021. As of February, 623 infants and toddlers with possible disabilities, delays, or developmental challenges are on the waiting list,” says Barrett. While these service providers generally make higher salaries than child care staff, many are often burdened with large amounts of student loans, so saving on child care costs could serve as an important consideration when deciding where to work.

While these types of programs are starting to spread across the country, what is less clear is how many family child care (FCC) providers can benefit. Because most states interpret federal CCDF rules to prohibit providers from being paid to care for their own children, it requires creativity on the part of these providers to take advantage of a child care subsidy for their own child.

In some states, FCC providers have taken advantage of the benefit by swapping their own children with those of another provider or by using the benefit to pay for after school care in a public school. States could also make it easier for these providers to take advantage of the subsidy eligibility by using state funds, rather than federal CCDF funds, to pay for the program. States might also want to think creatively about other ways to entice more FCC providers into the field. “We would like to grow our family childcare homes immensely. We've lost a lot in the past few years due to retirement. In order to support those educators as much as possible, we may have to come up with ideas that are more focused on them,” says Vanover.

Natalie Renew of Home Grown explains why the benefit could be so beneficial to these providers if they’re able to find a way to make it work: “These are folks who are earning very low incomes who really need to have a total compensation view that includes both wages, but also really substantial benefits. And being able to save $8,000 or $10,000 a year on child care is a game changer for a child care worker who’s earning 12 bucks an hour.”