Montana’s Child Care Crisis: Workforce Solutions Are the Key to Progress

Xanna Burg | December 2024 | Presented by the Montana Budget & Policy Center

Finding and affording child care is challenging across Montana. Many families face severely limited options for child care and ultimately pay high costs when they do find care. In our first report, “Reaching Families: Assessing Best Beginnings’ Impact on Montana’s Communities,” we provide an in-depth analysis of the current landscape for accessing and affording child care, including how the Best Beginnings Scholarship is an opportunity to support families and providers. As Montana leaders work to build a child care system that works for families and providers, strategies and solutions must include the child care workforce. Specific recommendations include:
• Improve child care wages through a comprehensive wage supplement program; and
• Expand eligibility for the Best Beginnings Scholarship to all child care staff.

Lack of Affordable and Accessible Child Care Impacts Everyone in Montana

Child care impacts us all in Montana. Parents of young children who struggle to find and afford care are often left to make difficult decisions about how work or education is impacted. Career sacrifices that parents make to accommodate child care disproportionately affect women. Mothers of young children in Montana are less likely to be in the workforce, with 31 percent of mothers with young children not in the workforce compared to 6 percent of men with young children. Nearly half (47 percent) of mothers of color with young children are not in the workforce.^[1] When parents struggle to find care, it impacts businesses and the broader economy. A survey in 2020 showed that more than two-thirds (68 percent) of social service businesses (like education, health care, and government) identified there was a child care shortage for their workers and that the deficit should be prioritized.^[2]

Child care impacts children directly. Early childhood is a critical window of time for children’s development.^[3] Positive learning experiences and nurturing relationships, like those found in high-quality programs, help young children set a strong foundation for future growth and learning.

The child care workforce underscores all of these impacts. For young children, the relationship a child has with their caregiver matters the most when considering quality, meaning a stable and skilled child care workforce is a key part of high-quality care.^[4] Unfortunately, child care workers in Montana do not earn wages that reflect the value of their caregiving work, resulting in difficulty recruiting and retaining a child care workforce. Unless efforts address the shortfalls of the child care workforce specifically, the child care system will continue to struggle to meet the needs of all who depend on it.

Parents Alone Cannot Pay What High-Quality Care Costs

Parents alone cannot bear the full cost of high-quality care on their own. Using the Montana Child Care Cost Model developed in 2024, a typical center would need to charge $2,281 per month ($27,370 per year) for the true cost of high-quality care for an infant and $1,385 per month ($16,618 per year) for a 4-year-old, including paying staff higher wages and offering benefits and time off.^[5] A typical family-based program would need to charge $1,975 a month per child ($23,694 per year) for the true cost of high-quality care.^[5] That is two to three times the cost of in-state tuition at Montana State University ($8,460 per year).^[6]

If providers charged what it truly costs to offer high-quality care, no one would be able to attend their programs. Instead, providers lower their prices to what parents can just barely afford. To make up the difference, providers cut staff wages and benefits. Without more significant investment in the child care system, and specifically in the child care workforce, low wages will persist.

Montana’s current child care system is largely funded by parents, covering about 81 percent of the estimated cost, with the rest coming from state and federal sources.^[7] Most of the state and federal funding goes directly to support children receiving a Best Beginnings Scholarship, with a smaller amount of funding to support licensing, training, and other services for providers. In total, the $54.2 million in state and federal funds invested in the child care system is roughly equal to $1,168 per child age birth to 5 with working parents.^[7] By comparison, the average spending per student in public schools in Montana is $14,451 per child.^[8] Given that these estimates are based on the current child care system, which falls short of the true cost of care and the demand from working families, these numbers understate the need for public investment.

The Child Care Workforce Is Critical to Montana

The early childhood workforce lives and works in communities all across Montana, providing essential care and education that supports families and builds a strong foundation for our youngest residents. In state fiscal year 2024, 4,680 people worked in child care and early childhood education across the state, according to the Montana Early Childhood Project, a statewide registry that allows workers to track professional development and credentials.^[9] Montana’s child care workforce is disproportionately female (97 percent vs. 47 percent of all workers) and BIPOC (16 percent vs. 13 percent of all workers), underscoring the need to focus on equity as part of conversations on the child care workforce.^[10] Low wages have plagued the child care industry for decades, due to limited public funding and because policies and practices have undervalued caregiving.

The median wage for child care workers in Montana was $13.99 per hour in 2023.^[11] Annual mean wage estimates for child care workers hovers around $30,000 per year.^[11] These low wages make it difficult to recruit and retain a child care workforce and do not begin to recognize and value child care workers who support families and strengthen communities in our state.

Child care workers have shouldered the burden of inadequate funding by working for low wages for decades. Parents have also shouldered the burden of inadequate funding by making difficult decisions to leave the workforce when child care becomes too unaffordable, missing out on lost wages, career advancement, and education opportunities. Women disproportionately bear the responsibility for caregiving of family members, and over the course of a lifetime, women specifically lose $295,000 in income and retirement savings to provide family care.^[12] Inadequate funding for child care also means children bear part of the burden when high-quality care is more limited. High turnover for child care staff directly impacts the relationships and quality of care children receive. Meaningful public investment is needed to shift the burden away from children, parents, and child care workers.

In a recent survey of child care workers, more equitable pay was listed as the most important benefit, with 88 percent saying it was important or very important.^[13] Professional development opportunities (84 percent) and paid time off (83 percent) are also important to child care workers.^[13]

Child Care Work Is Chronically Undervalued, Impacting BIPOC and Women the Most

The reality of today’s child care profession has been shaped by decades of policies and public perception that devalued the role of caring for young children. For example, the Fair Labor Standards Act of 1938 excluded domestic, agricultural, and service occupations.^[14] This exclusion reflects a policy decision that overlooked the value of caregiving work, despite the expertise and contributions of women, particularly BIPOC women, who have long been leaders in domestic and caregiving roles. Black women who were enslaved were forced to provide unpaid labor, including many domestic and caregiving tasks.14 For American Indian families, the Civilization Fund Act of 1819 created boarding schools designed to assimilate American Indian people into white patriarchal culture.^[14] Boarding schools focused education for girls on domestic skills alongside forced labor, abuse, and stripping American Indians of their culture that more largely focused on communal life.^[14] After the end of slavery, education and training opportunities for women of color in the early 20th century were almost exclusively focused on domestic skills, leaving very few options besides domestic work for women of color.^[15]

Federal funding for child care ebbed and flowed throughout the 1900s. Child care funding sometimes flourished, like during World War II, when more women entered the workforce as men were away.^[15] In 1971, Congress passed the Comprehensive Child Development Act with bipartisan support, which would have created substantial and universal support for child care, but was ultimately vetoed as a result of backlash from anti-feminist groups who wanted to maintain gendered family roles.^[15] The examples of policies and public perception go on and on throughout history and set a precedent for undervaluing caregiving as a skilled and essential role. This legacy directly shapes the present-day reality of an underpaid and undervalued child care workforce.

Recent Programs to Improve Child Care Wages Have Limited Impact

With additional federal funding available during the pandemic, Montana implemented the ARPA Child Care Workforce Stipends in 2022, spending $4 million to fund one-time-only stipends for eligible child care workers.^[16] Eligible child care workers received stipends in two rounds ranging in total amounts from $600 to $1,600. A $1,600 stipend is roughly equal to a 77-cent raise if working full time over a year.^[17] While any support of the child care workforce is beneficial, a stipend model has challenges addressing low wages. When stipends go directly to workers, providers are not able to advertise higher wages when recruiting new workers. Whether stipends are temporary or ongoing and the amount offered also matters in terms of a tool to raise wages and retain workers.

A recent federal grant allowed Montana to implement the Child Care Assistance for Child Care Workers program, expanding eligibility for the Best Beginnings Scholarship to certain child care staff if they earn less than 250 percent of the federal poverty level for their entire household (about $64,500 for a family of three).^[18] Initial feedback from licensed providers and child care workers indicates this program is a benefit and helps workers stay in their current job.^[19] However, providers and workers agreed that the income limit has been challenging, particularly for families where two people work.^[19] In a recent survey, more than half of child care providers were covering a child care benefit for employees before the state program began in October 2023.^[19] When child care providers cover this benefit for those who do not qualify, less income is left to pay higher wages for all employees.

Key Strategies Can Help Improve Child Care Worker Wages and Benefits

Strategy #1: Improve Child Care Wages and Benefits

Invest in a comprehensive wage supplement program to support the child care workforce and their invaluable contribution to Montana children and families. Minnesota implemented a similar wage supplement program called Great Start Compensation Support, which provides monthly grants to all regulated providers who use the funding to support staff wages and benefits.^[20] In the Minnesota program, a $375 monthly worker benefit translates to about a $2 per hour raise.

Illinois also recently implemented a similar program called the Smart Start workforce grants.^[21] Grants are given to eligible regulated programs to help providers pay a minimum wage for teachers and assistant teachers. The minimum wage depends on the location and role but ranges from $17 to $19.25 per hour. In the Illinois program, grant amounts are based on classrooms and were calculated based on the funds needed to raise wages to the minimum levels.

Strategy #2: Expand Eligibility for the Best Beginnings Scholarship to All Child Care Staff, Regardless of Income

Many child care workers have young children that also need care. These parents working in child care may already be eligible for a Best Beginnings Scholarship, but others fall just above the eligibility level, particularly for families with two working parents. Some providers choose to take on the cost themselves if a worker does not qualify for Best Beginnings as a strategy to recruit and retain workers. Other parents who work at a child care program are left to make a difficult decision whether to keep working or if the full cost of child care is too high compared to their wages earned.

Expanding eligibility for the Best Beginnings Scholarship to all child care staff, regardless of income, is a strategy to help bolster the benefits available to child care workers. Providers already shouldering this cost burden would have more flexibility in their budget to raise wages for all workers. Three states (Iowa, Kentucky, and Maine) invested state dollars to expand eligibility to child care staff regardless of income.^[22] Many other states have expanded eligibility for child care workers up to the federal maximum, similar to Montana’s temporary program that provides Best Beginnings up to 250 percent of the federal poverty level for child care staff. An estimated 1,000 child care workers with young children work in Montana.^[23]

Fixing the Child Care System in Montana Requires Investing in the Child Care Workforce

More state investment in the child care workforce is needed to make significant shifts in recruiting and retaining staff and raising wages. A well-compensated and stable child care workforce will improve access and affordability for families, as more programs can remain open or expand their current capacity.