The rest of the US can learn a lot from how New Mexico is tackling the childcare crisis
- New Mexico is the first state to dedicate permanent funding for childcare.
- It comes as many American families are struggling to find and afford childcare.
America has a childcare crisis. New Mexico is trying to show the rest of the country a better way forward.
The state's legislature is set to approve plans in the coming weeks to allocate childcare providers more money per child, make more families eligible for free childcare, give the industry's workers permanent raises, and establish a wage floor of $15 per hour.
It's happening because last November, over 70% of New Mexico voters supported a constitutional amendment that will dedicate roughly $150 million per year to early childhood education. The amendment, which was the result of nearly a year of campaigning by thousands of childcare workers across the state, made New Mexico the first in the nation to allocate permanent funding to childcare. Last May, the state became the first to offer free childcare to the majority of its residents.
"New Mexico is a leader right now," Cindy Lehnhoff, Director of the National Child Care Association, told Insider.
It could set the stage for quite a turnaround for a state whose funding for child-serving programs has languished over the past decade. While New Mexico ranks in the middle-of-the-pack in terms of childcare affordability, it was dead last in the nation in "child well-being" in 2022, according to the annual KIDS COUNT Data Book report.
The rest of the country is grappling with its own childcare problems.
In 2018, the left-leaning Center for American Progress found that over half of Americans lived in an area where childcare was sparse, and the shortage only grew worse during the pandemic. When families do find childcare, it's often expensive. National childcare costs average over $9,000 annually, and the median cost of having two children in childcare exceeded the average rent in all 49 states with available data in 2021, according to a new Department of Labor report. And costs could shoot even higher over the next year as federal funds dry up.
Experts say the key is providing the kind of stable funding New Mexico just did
With money running out, many childcare providers may be left with two options: Cut back on wage increases and risk that their workers will leave, or raise prices and risk that parents will decide to pull their children out of childcare.
Experts told Insider it's currently not economically viable for many childcare providers to offer both moderate prices and healthy wages. It comes down to small children being difficult to care for.
"Childcare, or early care and education, is labor intensive," Wanzi Muruvi, senior research and policy associate at the Center for the Study of Child Care Employment at UC Berkeley, told Insider.
"Economies of scale do not apply to child care in the same way as with other economic sectors," Taryn Morrissey, an associate professor of public policy at American University, told Insider. "Unlike higher education, for example, lecture halls with hundreds of students would not work for infants' and toddlers' care and education."
States have different adult-to-child ratio requirements for childcare. But while the NCCA's Lehnhoff acknowledges loosening these ratios could help raise wages and bring down costs, she says doing so isn't the right solution.
"You have got to think about putting yourself in a room by yourself with 11 two-year-olds," she said. "You're potty training, you're feeding, you are cleaning up breakfast, lunch, and two snacks a day. Oh, and guess what? You also are teaching and helping them develop."
The experts agree the best solution ties back to what New Mexico is doing right now: expanding government childcare funding.
"More public investment is needed to ensure families across the income spectrum have access to high-quality child care, which includes providing compensation that can attract and retain skilled workers," Morrissey said.
Of course, the question is where will all this funding will come from. New Mexico, for instance, is allowing some childcare money to be drawn from a state oil and gas fund valued at nearly $26 billion, but not every state has a piggy bank like this.
That's why Muruvi and Lehnhoff say the federal government needs to step up as well.
"Other industrialized nations invest in it as a public good, like K-12, but in the US it operates as a private market-based system that fails the workforce, families, and children," Muruvi said, adding that the US needs "universal and affordable access for children and their families."
"It is going to take an investment from our federal government to come forward and to think about the return on investment if you invest in early childhood and childcare so that people can go to work and earn salaries and pay taxes and then also you're growing a better workforce," Lehnhoff said.
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