Businesses Scramble to Address Child Care Crisis

Kylie Collins learned she was pregnant with her first child in March 2020, the day North Carolina went into pandemic lockdown. Collins is from Australia and her husband is from England, so they have no family members within a five-hour flight. They got on the waitlist for every child care center within a 40-mile radius of their Brevard home. 

While they waited, Collins and her husband set up nanny shares in their home, with different babysitters caring for multiple children. This arrangement cost twice what a traditional daycare might and was “very, very stressful,” Collins said. She left her job as a camp director to work from home, thinking it would grant her flexibility. But every time her son cried, she was distracted. Then their long-term nanny left, and so did one of the mothers in the nanny share.

Collins and her husband considered running their own child care center, but they couldn’t make the numbers work. To earn a profit, they’d have to charge more than families around them could afford to pay. “We were so desperate to have consistent care,” Collins said.

Her desperation is echoed by parents and employers across the state. More than five families compete for every spot in a licensed child care center, according to the N.C. Early Education Coalition, an advocacy group. Transylvania County, where Collins lives, has space in those centers for just 12 percent of infants and toddlers with working parents, according to a 2022 study by the advocacy group the Child Care Services Association.

In May 2023, the N.C. Chamber Foundation published a survey that found more than a quarter of parents of kids 5 years old and younger had left the workforce because they couldn’t find affordable child care. Nationally, U.S. Bureau of Labor Statistics data show 47,000 people missed work last year due to child care problems, compared to 33,000 people in 2019.

Businesses, nonprofits, and local governments are scrambling to help. They’re trying things such as splitting child care costs between employers and parents, providing land and buildings so daycare centers can save on rent, and giving raises to early childhood educators who pursue professional development. None of it is enough to solve the problem.

Many child care centers kept their doors open in recent years by relying on federal stabilization grants that let them pay workers higher salaries. Those grants, part of the 2021 American Rescue Plan, ran out in June. The state legislature approved $67.5 million to fill the gap—much less than Gov. Roy Cooper and child care advocates wanted. The money will run out again in December. 

“We have to implore the state to stop putting Band-aids on this and make it a priority,” said James Milner, who contributes to a local child care fund and is president of Appalachian Commercial Real Estate.

On The Brink

Child care was already in short supply before 2020, but the pandemic made the problem impossible to ignore. Parents couldn’t attend Zoom meetings without screaming children in the background; nurses couldn’t see patients without someone watching their kids. While many child care centers reopened eventually, some did not. Since February 2020, the number of licensed child care centers in the state has decreased by 5.3 percent, according to EdNC.

State Commerce Department numbers show the child care industry, whose workforce had been growing until 2019, never recovered from the pandemic. It lost six percent of its workers from 2019 to 2021. The federal stabilization grants lured some teachers back with higher pay, but providers can’t sustain those raises without help.

Child care providers operate on razor-thin profit margins because while the costs of rent and wages go up, they can’t raise tuition rates beyond what parents can afford to pay. Last year, the median wage for child care workers was $14.65 an hour, according to the state Department of Commerce. Compensation varies widely depending on a teacher’s location and education. Iris McRae, who owns a center in Rockingham with five stars (the highest quality ranking bestowed by the state) can only afford to pay a teacher with an associate’s degree in early childhood $12 an hour—less than that teacher would earn at a fast-food chain. 

Meanwhile, many North Carolina businesses are dealing with a labor shortage and struggle to attract talent without offering child care. Last year, there were 3,476 more job openings in the state than people seeking them, according to the state Department of Commerce. Many companies want to set up their own daycare centers onsite, but there are too many regulatory hoops to jump through, Payne said.

This June, the U.S. Chamber of Commerce Foundation, in collaboration with the advocacy group NC Child, released a report estimating North Carolina loses more than $5.65 billion a year due to its child care shortage. 

The shortage was especially acute in Western North Carolina, even before Hurricane Helene threw the whole region into turmoil. Since the pandemic, Boone Area Chamber of Commerce president David Jackson said dozens of school teachers and local government employees have considered accepting jobs in the area but declined because of the cost of living, lack of housing, or child care. 

“In a place like Boone, where we have very few major employers, it is hard for us to attract another major employer based on a lack of child care,” Milner said.

Lisa Finaldi, community engagement leader for the NC Early Childhood Foundation, said she knows of at least two employers who have had trouble recruiting workers to the state because of child care issues, but they declined to be identified for this article.

Josh Herman, preconstruction manager at Greene Construction, Inc. in Boone, spoke to Cooper’s office about the problem in June. “We frequently have office employees who bring their children to work and field employees who have to miss work to care for their child,” he said.

In early September, Jackson gathered a group of business leaders around the Chamber’s conference table. On snow days, he lets employees’ children—including his own—play in this fluorescent-lit room. On this day, he was using the room to convene a discussion about a crisis. 

The $67.5 million in state funds—which had been promised to child care centers in June—were tied up in bureaucracy and had not yet arrived. The federal stabilization checks had been mailed quarterly, with the last ones sent in April. Nothing came in July. “That money has still not hit the bank,” Jackson told the group. “We’re on the brink, again, of a pretty significant business disruption.”

The room was quiet. In April, the Boone Chamber and the Watauga County Economic Development Commission had published a study estimating the area needed 580 more child care spots for children under 5 and more than 1,600 seats in afterschool programs for older children. Increasing these resources would allow 300 parents to join the workforce—a huge number in a county where a quarter of the residents live in poverty. 

Jackson explained that some child care centers were applying for bridge loans and others were giving parents discounts to pay tuition in advance. Boone has an Early Childhood Development Fund, created by donations from private businesses and the county government, that gives money to centers whose teachers pursue professional development. But Jackson said that money could not be used for bridge loans. 

Milner, sitting a few feet away from Jackson, covered his eyes with his hands. He’s an enthusiastic contributor to the Early Childhood Development Fund. His school-age sons sometimes have to stay home alone while he attends meetings or other work obligations. “Child care is an economic development issue,” he said later. “If we don’t work to address it, then it can have a catastrophic impact.”

Messy Middle

The morning after Jackson’s Chamber meeting, Halee Hartley savored a rare quiet moment at Panera Bread in the Boone Mall. In the world of early childhood education, she’s considered a unicorn. She owns three child care centers in Boone and had just come from a meeting with the contractor who’s helping her open a fourth. She pays her employees between $14 and $21 an hour, charges parents $810 to $860 a month for tuition, and has a profit margin of approximately zero. 

“I don’t pay myself,” she explained, spreading cream cheese on a bagel. With her silver hoop earrings and gray sweatshirt, Hartley was cheerful at 9 a.m., but the circles under her eyes indicated she didn’t have much time to sleep.

Instead of collecting a salary, Hartley lives on investment income and the money she earns from managing vacation rentals. To tide her over until the state funding arrived, Hartley took out a small capital loan and offered parents a discount if they paid tuition in advance. Stabilization checks were finally mailed to providers on September 18.

Then Hurricane Helene hit. Entire communities in the western part of the state were destroyed, and roughly 100 people in North Carolina died. Immediately after the storm, 25 counties were declared federal disaster areas. Of the 812 child care centers and pre-K sites in those areas, roughly a third had not reopened more than a week after the storm hit. According to the state Department of Health and Human Services, 53 centers suffered damage that would prevent them from reopening, and 50 had not re-established communication, so their damage was unknown. 

On October 3, the foundation arm of the Boone Chamber announced it would give $125,000 to local licensed child care centers, allowing them to pay their staff and cover tuition costs even if they were not able to reopen.

Across the state, many child care centers like Hartley’s, as well as other businesses and local governments, are trying anything they can to stay afloat and help parents.

Fourteen counties are involved in a pilot version of Tri-Share, a program that other states are also testing. In North Carolina, it splits the cost of child care between employers, parents, and a $900,000 contribution from the state. The program, which includes Henderson and Lincoln counties in the west, Chatham in central N.C., and Scotland in the east, started enrolling families in July.

In Yadkin County, local leaders are working on a program called EarlyEd FlexPlex, which would house six small child care centers under one roof. The Yadkin County Economic Development Partnership would own the building and lease it to the local Smart Start—a nonprofit that provides services to families and young children—which would manage the preschools and support them in providing quality care. 

This model, originally designed by the Minnesota firm Business of Child Care, holds promise for rural communities looking to save on the cost of land, rent, and administering child care. But Yadkin needs to raise $2 million in local and state funding before it can launch.

NC Early Childhood Foundation’s Finaldi, who runs an initiative to make businesses in the state more family-friendly, has been asking employers to voluntarily match whatever employees put in their dependent-care accounts—even if it’s just $200 a month. “Those kinds of things will help stabilize the market,” she said. “At least during this messy middle, we can do something.”

Legislative Inaction

In Hartley’s free time, she works with the WNC Early Childhood Coalition—an advocacy group aimed at improving child care in 18 western counties—to speak to legislators in Raleigh about the child care crisis. She said state Sen. Ralph Hise (R-Spruce Pine) has been a “100 percent advocate.” But many of his colleagues aren’t as sympathetic. She estimates that about half the lawmakers she’s met understand the problem and half don’t.

The NC Chamber survey found 79 percent of voters—across all parties and regions of the state—want more state funding for affordable, quality care. This echoes the findings of a national poll conducted last year by the First Five Years Fund, which found 74 percent of all voters think federal funding for child care and early learning should be increased.

The Chamber has a powerful lobbying arm that gave $39,000 to state lawmakers last year, according to the nonpartisan Transparency USA. In response to growing complaints from its members, the Chamber formed a coalition of companies such as Butterball and American Airlines to pressure leaders in Raleigh to invest more in child care. But the group isn’t pushing any specific child care policy; Chamber spokeswoman Payne said they’re looking at long-term, “market-based” solutions that don’t rely entirely on government funding. 

When business leaders advocated for change in other states, it helped. In Vermont, they pushed for a payroll tax that will provide $125 million in child care funding annually. In Michigan, they supported the Tri-Share program that some counties in North Carolina have now adopted. In 2022, New Mexico became the first state in the country to pass a constitutional amendment providing a permanent fund for child care—using money from oil and gas production on public lands.

In North Carolina, some child care advocates are pushing for proposals including:

• Raising the subsidy floor. The reimbursement child care centers receive when lower-income parents pay with a child care subsidy (funded by state and federal grants) varies widely from county to county. For example, a 5-star center in Randolph County gets $715 less per child than an equivalent center in neighboring Chatham County. NC Child wants to raise the minimum subsidy payment in all counties to $1400 a month per child. They estimate this will cost the state $95 million annually.

• Keeping the wage supplement that was funded by the stabilization grants, allowing centers to recruit and retain high quality teachers.

• Giving all educators free or reduced tuition at the child care centers where they work. (Proposed by the NC Licensed Child Care Association). This would help retain teachers, allowing centers to accept more children and shorten their waiting lists.

Bipartisan members of the early childhood caucus in the state legislature asked for $300 million to replace the federal stabilization grants that ran out this summer. When the legislature authorized just $67.5 million, House Speaker Tim Moore suggested that more funding would be approved in January.

In early September, state lawmakers passed a measure allocating $463 million to private school vouchers—and no more to child care. (Gov. Cooper vetoed the bill). “Why have they chosen not to make the $300 million [child care] investment?” asked Finaldi. “The answer probably has nothing to do with child care.” 

Moore and Senate President Pro Tempore Phil Berger did not respond to requests for comment.

Every Dollar Helps

McRae would benefit from all of the changes proposed by child care advocates. Her Over the Rainbow Child Development Center in Rockingham is open 24 hours a day to accommodate parents who work late-night shifts, and 95 percent of her families receive subsidies. But those payments don’t cover the full cost of care, and some parents can’t afford to cover the difference. McRae has watched them juggle the escalating cost of rent, food, gas, and clothing. “They’re still struggling, paying those [tuition] fees,” McRae said. She’s asked some of them to leave the program because they fall so far behind.

McRae gives tuition discounts to some of her teachers with young children. This means she’s able to keep her classrooms staffed, but she’s losing about $3,000 a month in revenue. “I can’t keep hiring teachers and giving them these big discounts,” she said. If the state covered their tuition, it would relieve that burden.

“Every additional dollar that you put into child care helps,” said Julie Kashen, senior fellow and director of women’s economic justice at the Century Foundation, a progressive think tank. “When chambers of commerce [and] businesses get involved, that really does help.” However, she adds, simply having businesses share the cost with employees is “not the long-term answer.”

The larger fix has to come from the federal government, Kashen said. She points to President Biden’s 2025 budget proposal, released in March, which includes $600 billion for child care. From birth through kindergarten, the proposal would cap the cost of care at $10 a day for families earning $200,000 or less. It also calls for funding universal preschool for 4-year-olds and raising compensation for early childhood educators. 

“Any federal investment requires that the resources are available to both lower costs for families and raise wages for early educators,” Kashen said. (Congress has pushed 2025 spending decisions until after the November election.)

Vice President Kamala Harris, the Democratic presidential nominee, has proposed capping child care costs at no more than 7 percent of a family’s income. She would also expand the Child Tax Credit to give $6,000 to parents of newborns.

Former President Donald Trump has not announced a specific child care plan, but suggested tariffs on foreign goods would raise the money to address it. His running mate, Sen. J.D. Vance, has said he supports a $5,000 Child Tax Credit. 

Moms Under Pressure

Kylie Collins finally found child care in late 2022. Her son, who was almost 2 by then, was accepted into New Adventure Learning Center, a county-run, full-day center in Brevard. Collins calls this “an absolute lifesaver.” She knows many families aren’t so lucky. 

Kellyn Haight, a nurse who spent seven years at UNC Hospitals in Chapel Hill before moving to Brevard, has found it impossible to work without reliable care for her 4-year-old daughter. Her husband is a pilot whose job requires unpredictable hours and frequent travel. Her daughter attends a half-day preschool run by a local church. They have no family nearby.

This spring, Haight took a part-time job in the emergency room at Transylvania Regional Hospital, planning to work just one day a week. But the logistical stress of asking friends to watch her daughter from noon to 8 p.m.—a shift most child care centers would not cover—proved too much. “I couldn’t even finish my orientation,” Haight said. “The sentiment was: We’re not sure if you can commit the time. What is this gonna look like when we’re relying on you?”

Haight’s voice is pained as she describes the loss of her nursing career—both for herself and for her patients. “I don’t understand why hospitals don’t have child care on site,” she said. “Most of these people are women of childbearing age. You’re losing these experienced nurses because they’re having to stay home.” 

She sees this as part of a broader “devaluation of having a family”—especially for working mothers.

“There is dirt and blood under our hands trying to hold onto ourselves,” Haight said of working moms. “I just feel like you should not have to go to those extreme lengths.”

Lisa Rab is a journalist based in Asheville. Her work has appeared in Politico Magazine and The Washington Post Magazine, among many other outlets. Reach her at lisarab.substack.com.

Support for this reporting came from the Better Life Lab at New America.