WASHINGTON, D.C. – On April 14, President Joe Biden addressed the nation from the Treaty Room at the White House, detailing a significant plan aimed at bolstering the child care industry, which has been severely impacted by the COVID-19 pandemic. This initiative, part of the American Rescue Plan, allocates $39 billion to assist states, territories, and tribes in addressing the ongoing child care crisis.
The administration asserts that these funds are vital for kickstarting economic recovery and paving the way for a more equitable future for women. The pandemic has hit various sectors hard, but working women have faced particularly steep challenges. With many child care options disappearing, parents find themselves in a difficult position—without reliable care, many cannot return to work.
The White House’s announcement comes as statistics reveal that while many fathers have resumed their jobs, mothers—especially those without a college degree—have struggled to do the same. This trend is expected to widen the gender pay gap, projected to increase by 5 percentage points. As women strive to reclaim their roles in the workforce, families with young children, particularly those of color where mothers often serve as the primary earners, might encounter prolonged financial hardships.
The administration highlighted the integral role women play in the workforce, noting that they accounted for 91 percent of the income growth seen by middle-class families over the last four decades. Yet, since the onset of the pandemic, nearly 2 million women have exited the labor force, primarily due to caregiving demands. Experts warn this regression could undo significant advancements made in female workforce participation over recent decades.
Additionally, the child care sector itself, mostly consisting of small businesses owned by women and people of color, has been devastated by the pandemic. Many child care providers have faced plummeting enrollment alongside soaring costs—up to 47 percent higher in some cases—due to the necessary expenses for personal protective equipment and sanitation protocols. The White House acknowledged that, even before the pandemic, child care providers operated on razor-thin profit margins.
A December survey indicated that about one in four child care providers were closed during the early pandemic, further limiting access to care, especially for families of color. The situation has exacerbated an existing issue where half of Americans live in so-called child care deserts. Many providers have had to make tough financial decisions, with two in five reporting they have incurred debt using personal credit cards to cover rising costs. The ripple effect has led to layoffs, furloughs, and pay cuts, with one in six child care jobs—often held by women of color—still unfilled.
The $39 billion initiative earmarks $24 billion for child care stabilization funding, aimed at helping providers reopen or remain operational, maintain safe learning environments, and offer mental health support for caregivers and children. The remaining $15 billion will be allocated to states for flexible funding to enhance affordability, increase access for subsidized families, improve compensation for early childhood workers, and address other state-specific care needs.
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In summary, the Biden administration’s new initiative aims to stabilize the child care sector, which has faced unprecedented challenges during the pandemic. By providing essential funding, the plan seeks to support child care providers, help families access affordable care, and ensure that women can return to the workforce, thereby promoting economic recovery and equity.