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North Carolina’s Childcare Crisis: A Looming Catastrophe

As the American Rescue Plan Act’s temporary lifeline for childcare in North Carolina nears its end, the state faces an impending crisis that threatens the well-being of families and the economy alike. With nearly 221,000 children under the age of five reliant on childcare services, the repercussions of inadequate funding and systemic challenges are becoming increasingly dire.

The substantial increase in federal support provided by the American Rescue Plan Act, amounting to about $1.3 billion annually, offered a vital cushion for childcare facilities throughout the pandemic. Ariel Ford, overseeing North Carolina’s Division of Child Development and Early Education, emphasized the critical role this funding played in keeping childcare centers operational during tumultuous times. However, this financial support is set to expire in July unless immediate legislative intervention occurs.

In Raleigh on Tuesday, NC Child, a statewide nonprofit organization dedicated to every aspect of child health, held its inaugural “State of the Child” summit, bringing together over 100 organizations and leaders dedicated to serving children in North Carolina. The first topic addressed was the impending childcare crisis.

The consequences of funding shortfalls are already being felt across the state as childcare centers grapple with closures and staffing shortages. Unable to sustain operations without state and federal subsidies, these centers are forced to shutter their doors, leaving families scrambling for alternatives and exacerbating an already strained system.

“300 childcare centers in North Carolina closed last year,” NC Secretary of DHHS Kody Kinsey said during the summit. “Right now we are having to face the reality that many more are slated to close this year if something isn’t done. It is a lot harder to fix something after it is closed and shut down than to do something now to provide the resources needed to keep it going.”

Among those 300 childcare centers were centers across NC’s western most states operated by Southwestern Child Development, which announced the closing of seven childcare facilities last October. The seven centers operated by the organization served 300 children from birth to 5 years old, the majority of whom received child care subsidy or NC Pre-K services.

“These closures are devastating to children, families and communities who rely on child care to nurture their children’s healthy development and learning, allow parents to work and support their families, and keep local businesses running,” said Ariel Ford, Dire tor of NCDHHS Division of Child Development and Early Education. “ Across North Carolina, we’re seeing a growing crisis of a lack of child care access and increased financial pressures driven by the need for competitive wages and increasing supply costs.

Without access to additional funding, more child care centers could face closure. Unfortunately, the budget passed by the legislature did not include significant new funding for childcare. State health officials join Governor Cooper in urging the General Assembly to make this child care crisis a priority.”

According to NC Child, childcare costs have risen 32% in North Carolina since 2019, and if something isn’t done soon, 155,000 children are estimated to lose care. An estimated 1,800 childcare facilities could be unable to pay the bills. And on top of that, parents could be forced to stay home, costing parents millions in revenue.

Debra Derr, Director of Government Affairs for the North Carolina Chamber of Commerce lead the childcare discussion for NC Child and sited a recent report that underscores the far-reaching impact of childcare challenges on the state’s workforce and economy. Shockingly, a quarter of families with young children report leaving the workforce due to unaffordable childcare, hindering businesses’ ability to recruit and retain employees. Moreover, the prevalence of missed workdays due to childcare issues and the rejection of job opportunities due to escalating childcare expenses further underscore the urgency of the situation.

The financial burden on families is staggering, with childcare costs surpassing even the price of in-state college tuition. Parents of infants and toddlers face average annual childcare expenses exceeding $17,000, a daunting figure in a state where the median wage for childcare workers hovers at just $14 per hour. This disparity in wages, coupled with the demanding nature of the profession, contributes to difficulties in recruiting and retaining qualified childcare professionals, ultimately compromising the quality of care provided.

North Carolina’s childcare crisis extends beyond financial strains to encompass concerns about quality. Despite exorbitant costs, providers struggle to attract and retain skilled workers due to woefully inadequate compensation. Michelle Shepherd with the Wilkes Community Partnership for Children explained that a recent survey in Wilkes County revealed that parents are turning to social media to find individuals willing to keep their children due to the lack of adequate childcare facilities, raising a serious question regarding the quality and safety of those children.

The dire state of childcare in North Carolina demands immediate attention and decisive action from policymakers. Sustainable funding solutions must be prioritized to ensure the accessibility, affordability, and quality of childcare services for families across the state. Failure to address these challenges risks not only the well-being of children and families but also the long-term prosperity of North Carolina’s economy.

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