When Shauna Rose’s daughter was born two months early, Shauna had to burn most of her maternity leave while in the hospital. After leaving her job in eastern Nebraska, she is now looking for childcare in a new city. Not an easy task, since most childcare facilities are telling her there is a long waitlist.
“I called every childcare center that was rated a 4 or 5 on Step Up to Quality (an online resource for parents and childcare providers), and everyone was full,” Rose said. “Nobody had capacity, and the centers that did have capacity, following a tour, I did not feel my daughter would receive quality care from.”
As a result, Rose said, she did research on starting her own childcare center and encountered many roadblocks. Now she is looking into starting up an in-home daycare center but first must complete training, licensing and mentorship requirements.
After her daughter was born, Shauna Rose faced challenges finding suitable childcare services.
One outlet that provided guidance for Rose was Lincoln Littles in Lincoln, Nebraska. The organization’s goal is to remove barriers and provide opportunities for all children from birth to age 5, including access to affordable, high-quality early care and education.
“Lincoln Littles serves as a chamber of sorts to childcare providers offering resources, training opportunities, grants, and thought partners,” said Anne Brandt, executive director. “We also provide tuition assistance and childcare assistance to parents and increase quality childcare opportunities. Additionally, we offer support to businesses to help retain and recruit employees as well as workforce development for the childcare industry.”
Among the biggest issues in childcare? Affordability, lack of quality care and long waitlists for infant and toddler openings, Brandt said. Those issues won’t be resolved on their own, she said.
“The future has lots of potential, however it is going to take public investment through policy change,” she said. “Childcare is essential and part of the infrastructure of any community.”
Anne Brandt is executive director of Lincoln Littles.
Implications for the labor force
The Kansas City Fed explored the challenges associated with attaining childcare in an October 2024 Economic Bulletin. The author, Associate Economist John McCoy, began his research after the topic was brought up many times during the Bank’s community outreach activities.
“Childcare issues have been front of mind for many, especially since the pandemic,” McCoy said. “It appears that the primary concern has shifted from the availability of childcare to the availability of affordable childcare. During the pandemic, most concerns we heard about were shortages due to pandemic disruptions. Now, price is a bigger issue for families and may be causing some people to re-think their relationship with the labor force.”
Associate Economist John McCoy
In Oklahoma, there is a shortage of qualified childcare workers as a result of several factors, including effects from the pandemic, when many older workers retired. Carrie Williams, executive director of the Oklahoma Partnership for School Readiness Foundation in Oklahoma City, said childcare workers are among the lowest-paid in the workforce. She said the average pay is about $11.67 an hour, and many positions don’t offer health or retirement benefits.
“This combination of low pay and limited incentives makes the field unattractive to young people,” Williams said. “Additionally, many current childcare workers are leaving for jobs in retail settings like Target or Starbucks, where they can earn $17–$18 per hour and often receive comprehensive benefits packages.”
Williams said the childcare workforce must find ways to increase wages and offer good benefits, and that likely will require public investment from the state.
Strains on families
In 2024, the Oklahoma Partnership for School Readiness (OPSR) commissioned a RAND Corporation study to examine the true costs of providing childcare in Oklahoma. The report revealed that “the fees families can afford to pay are far below the actual costs of care. This disparity has contributed to a shrinking childcare industry, with licensed facilities dropping from 3,573 in 2015 to 3,108 in 2024, further straining availability. Increasing state subsidy rates for providers is a key solution to addressing this imbalance.”
Another potential strategy would be to reinstate a benefit allowing childcare workers to receive subsidized care for their own children, which was originally funded by federal pandemic dollars but ended in September 2024 when the funding expired.
Williams added that it’s not only difficult for parents to find open slots at childcare centers, but yet another challenge is to find one that fits their budget.
“A family earning the state median income of $61,000 and enrolling an infant and a 3-year-old in a childcare center could spend, on average, one-third of their annual income on childcare alone,” Williams said.
Carrie Williams is executive director of the Oklahoma Partnership for School Readiness.
According to the Center for American Progress, the childcare industry is facing a national shortage of early care and education providers and teachers. As of November 2023, the childcare sector was still more than 30,000 jobs below February 2020 levels.
“Introducing tax credits could help,” Williams said. “Businesses that contribute to employee childcare costs could be incentivized, and refundable tax credits could make childcare professions more financially viable.”
Meanwhile, Rose finally was able to find a job and childcare after months of being on a waiting list. However, she continues to advocate locally for affordable and accessible childcare for parents such as herself. She hopes to propose a new model inviting employers to contribute through sponsorship to new centers.
Brandt agrees that working to address the community’s current needs is the best way to make progress.
“We aspire to grow with the needs of the community, but for now we plan to go deeper into our current programs and develop partnerships with key local leaders and area businesses to design solutions,” Brandt said.
Resources from the Kansas City Fed
Read or download the Economic Bulletin and read Beige Book feedback from childcare providers in Tenth District communities.