US Childcare Crisis Harms Women’s Financial Security

The lack of affordable childcare in the United States is having a devastating impact on the economy, costing businesses, parents, and taxpayers $172 billion a year in lost productivity, earnings, and revenue, and the crisis will continue to grow without action from policymakers. Last year, the national average annual price of childcare was $13,184, which is 10% of the median household income for a married couple and one-third of a single-parent household, and families need to make over $180,000 to afford infant care, according to the National Women’s Law Center.

It’s also having a devastating impact on women. “The cost of childcare is suppressing women’s participation in the workforce,” said Nancy L. Cohen, CEO and founder of Gender Equity Policy Institute, a research and policy organization. Women’s wages are more likely to be lower than men’s, so for “a heterosexual couple the cost-benefit of putting a child or two or three children in childcare versus what the mother can bring home in pay” may not make economic sense, said Cohen. But when a mother does end up taking a leave, or quitting altogether, it can “reinforce stereotypes that women might leave the workforce when they have children, which makes employers pay them less,” withhold promotions, and in general, not invest in them as employees. Additionally, any time away from work means a reduction in retirement savings. “There’s a motherhood penalty if you take time out of the workforce. It’s a vicious circle.”

Demand for affordable, high-quality childcare far outpaces availability. A new report from the Center for American Progress found that nationwide almost half of families with children under the age of 5 live in childcare deserts — areas with at least three children competing for one local licensed slot. “When we’re talking about licensed childcare deserts to describe the structural shortages in the childcare sector, it can sound kind of abstract, but it has very real consequences for families and providers,” said Hailey Gibbs, associate director of early childhood policy at the Center for American Progress, and author of several reports on childcare deserts. “We’re talking about a family sitting on a waitlist for months or even years, a provider that can’t staff up more classrooms because they can’t afford to pay educators enough to recruit and retain them. And kids missing out on critical early learning experiences that shape their school readiness. We’re essentially talking about a coin toss for families with young kids.” The Center for American Progress found that in remote rural parts of the country, 70% of young children lack access to a slot.

Meanwhile, the number of children put on waiting lists for federally funded childcare assistance nearly doubled from February 2024 to February 2025, and has continued to grow. Although the numbers have fluctuated over the years, “to see the sudden spike was unusual,” said Karen Schulman, senior director of state childcare policy at the National Women’s Law Center and author of the report Warning Signs: State Child Care Assistance Policies 2025. She attributes the increase to several factors, including the expiration of supplemental federal childcare funding in 2024 and the failure of the Republican-led Congress to renew it. This puts “tremendous stress on the family and leaves them with terrible choices,” said Schulman. This might mean parents aren’t able to work, or they “stretch the [family] budget to pay for childcare on their own, making it harder to pay for food, for rent, for utilities. They might patch together less expensive arrangements which aren’t as reliable, making it more difficult to hold onto a stable job. It can play out in a number of different ways that are harmful to both a family’s well-being and the child’s.” Unstable childcare affects women’s “career trajectory and can have lifetime impacts on economic security.”

Struggles with childcare are especially challenging for single parents, most of whom are women. Single mothers are also overrepresented in the low-wage workforce, said Poonam Gupta, senior research associate at the Urban Institute and co-author of the report Elevating Their Voices: What Single Mothers Say They Need to Survive, a survey of over 2,200 single mothers across 43 states. Almost two-thirds of respondents “reported barriers to employment due to problems with childcare,” said Gupta. Single moms often have to “resort to childcare that they feel is not as reliable, that they don’t have as much trust in, but it’s ultimately the only affordable option.” This is especially difficult with low-wage jobs where there are often irregular hours and limited benefits. “Stable access to employment can only come if your childcare needs are met,” said Gupta.

The childcare workforce itself is made up overwhelmingly of women, and disproportionately women of color, and is one of the lowest paid professions, with workers often paid poverty-level wages. This means that early childhood educators themselves are struggling to support their own families, said Schulman. Not only do they receive low wages, but positions frequently do not include healthcare or retirement benefits, making it difficult to attract and retain staff, and this leads to a lot of turnover and instability in childcare centers.

Although the childcare system has been underfunded for years, the Trump administration has contributed to the current crisis through a number of initiatives including delaying or freezing funds meant for early learning programs and downsizing substantial parts of the Department of Health and Human Services responsible for overseeing these programs. It has also made regulatory changes to the federal programs that support childcare access that increase the administrative burden on childcare systems and also the cost for families, said Gibbs. In May the administration announced a proposed rule that would roll back advancements in compensation and benefits for Head Start teachers and staff. And another proposed regulation in the pipeline could gut performance standards, threatening how Head Start operates.

Advocates point to a handful of states, including New Mexico, Vermont and New York, that are prioritizing childcare funding in their state budgets. But in order to enact real change in very state, major public investment is required. “Members of Congress need to understand that the childcare market is broken and it’s a myth that the market can resolve its own issues without intervention,” said Gibbs. The childcare system “needs public investment in order to close the gap between what parents can afford to pay and what providers need in order to operate high-quality programs. We need a system that respects families’ individual needs and treats [childcare] not as a private burden that families have to bear alone, but instead as a shared public investment that everybody benefits from.”