Opinion: Investing in Child Care Is Critical for the Economy in San Diego and Statewide

Child care is unaffordable and inaccessible in most cities with San Diego as no exception. Nearly half of San Diego families with two children and living on a median income are spending up to 40% of their monthly income on child care, according to the San Diego County Child Care Blueprint.

Infant care is particularly expensive, costing an average of $19,000 per child annually, due to this age group requiring the most direct care. Even if they can afford care, families struggle to simply access child care due to a provider workforce shortage resulting in centers and daycare homes having reduced capacities.

Recently, the nonprofit business leadership organization

released a report that found the annual cost of infant-toddler child care in California is $17 billion each year. To address skyrocketing child care costs and give the state’s economy a boost, California must increase access to infant-toddler child care.

Sixty percent of Californians lived in a child care “desert” even before the pandemic. Further, while the state has several programs to make child care more affordable for parents with low incomes, the demand exceeds the supply and many eligible children go without care.

For example, only 14% of infants and toddlers eligible for subsidized child care actually received services. Teacher turnover and staffing shortages are high largely due to low wages. For California educators who accept child care subsidies, reimbursement is not given until after the care is provided — often a month after — presenting further financial complications.

We cannot create a greater supply of child care without supporting the workforce and businesses that provide it. ReadyNation proposes a three-point plan to support child care workers and their capacity to serve, especially for infants and toddlers.

First, California policymakers should increase wages for child care providers next year. If no wage support occurs next year, the subsidized reimbursement rate will fall back to the rate calculated by the 2018 Regional Market Rate survey. If that happens, the system will crumble under the immense loss of the workforce as no one can live on 2018 wages. This is especially inequitable considering the increased fast food minimum wage.

Second, we need to implement an alternative rate methodology to pay child care providers a reimbursement rate that reflects the true cost of care. The Department of Social Services is required to develop this single system as a result of negotiations with Child Care Providers United last year.

However, there is no legal obligation to implement a single rate system. The current fiscal impact of moving to a single rate system is estimated to be between $2 billion and $12 billion. In comparison, we lose an estimated $17 billion each year by not supporting our child care infrastructure. Executing this alternative methodology by June 30, 2026, will fulfill increasing wages for child care providers sorely in need.

Third, with adequate raises enacted, Gov. Gavin Newsom should fulfill his promise of funding 200,000 new subsidized child care spaces by the 2026-27 budget proposal. However, adding more spaces is futile without also increasing subsidized rates to ensure the child care providers can serve more children with fully staffed classrooms with quality teachers. The state is at risk of not fulfilling the promise of 200,000 spaces, or even worse, seeing more provider closures, unless we increase wages, implement the alternative methodology, and ensure that they do not fall back to a 2018 market rate for reimbursement.

California policymakers should promote access to affordable, high-quality infant and toddler care. When families do not have the child care they need, parents’ work productivity declines, resulting in costs to parents, their employers, and, in due time, taxpayers.

ReadyNation members are business executives building a skilled workforce by promoting solutions that prepare children to succeed in education, work, and life. We praise the Legislature and the Governor for being national leaders in enacting the family fee reform and extending the “hold harmless” proposal last year as these steps benefited families and providers. Executing on this plan will improve the quality of life and preserve the economic health for all Californians.

Rick Richardson is president and CEO of Child Development Associates, a San Diego County First 5 commissioner and a member of ReadyNation/Council for a Strong America.