Child Care in Crisis: Texas Case Study

    States throughout the country are grappling with major issues in early childhood education. Early childhood educators earn wages so low that many cannot afford to remain in the field, but child care programs cannot raise wages without raising tuition, which is already unaffordable for many families. Lack of access to consistent, high-quality child care costs billions of dollars each year through lost tax revenue and missed work days.

    In this research brief series, Child Care in Crisis: Texas Case Study, read about national child care issues through original findings from Texas, home to more than 10% of the nation’s children. The briefs explain the specific issues facing the child care industry and what states can do to support early childhood educators and child care businesses, as well as ensure that all families have access to high-quality child care.

    In the context of the COVID-19 pandemic straining the child care industry almost to its breaking point, Texas passed House Bill 619. The law tasked the Texas Workforce Commission (TWC) with developing a strategic plan to support the state’s child care workforce. In partnership with TWC, the Prenatal-to-3 Policy Impact Center convened a group of 27 Texas child care experts under the umbrella of the 2022 Texas Child Care Strategic Plan Workgroup (Workgroup), who shared input and recommendations about the needs of the early childhood education workforce in Texas. Simultaneously, more than 800 child care program directors responded to the 2022 Texas Child Care Director Survey, sharing their experiences in the industry, as well as reporting on characteristics and compensation of the early childhood educators at their child care program.

    Data from the Texas Director Survey and feedback from the Workgroup guided the development of the Workgroup Recommendations to Inform the 2022 Texas Child Care Workforce Strategic Plan, a comprehensive set of 11 recommendations to stabilize the industry and raise workforce quality. Data collected to develop the recommendations forms the basis of this new research brief series.


    Texas early childhood educators do not earn a living wage

    In the first brief, we examine the critical issue of compensation. Early childhood educators play an essential role in child development and the economy, but are consistently among the lowest paid. In Texas, the typical early childhood educator earns $4.41 per hour below a living wage. The brief also raises issues of equity and advancement. Hispanic educators, educators at subsidy-accepting programs, and educators in rural areas earn the least. And experience does not bring meaningful wage increases—an early childhood educator with 25 years on the job would, on average, make only $2 more per hour than a new high school graduate joining the field.

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    Working without support: Texas early childhood educators lack access to benefits

    In the second brief, we explore access to the type of benefits that contribute to high-quality, nurturing care for children by supporting the wellbeing and quality of life of the child care workforce. We found that fewer than 1 in 3 early childhood educators in Texas have health insurance through their employer, only half of workers have paid sick leave, and fewer than one third have retirement accounts. For educators in home-based programs, the numbers are even lower.

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    Child Care Hiring and Retention Challenges Driven by Low Pay

    In the third brief, we investigate the intertwining issues of wages and industry instability. We found that child care program directors overwhelmingly cite hiring and retaining high-quality early childhood educators as their biggest challenge—and low industry pay as the root cause behind staffing challenges. Directors agree that wages are too low to attract high-quality staff (77%) but that paying educators what they deserve would mean raising tuition (80%). Understaffed child care programs cannot operate at full licensed capacity, limiting access to child care for families. And inability to access child care can drive parents out of the workforce, resulting in reduced household income for families and reduced profit and productivity for businesses.

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    Subsidy Reimbursement Rates in Texas Remain Far Below the True Cost of Providing Child Care

    In the fourth and final brief, we dig into states’ varying approaches to setting reimbursement rates for child care. The brief finds that the Texas child care subsidy program sets reimbursement rates too low to cover the cost of providing care. As a result, Texas is underpaying child care providers by as much as $870 per month per child. Three states have begun using an innovative cost estimation model to identify the true cost of providing child care and to subsidize care at a rate that supports sustainable business. Applied in Texas, this approach would allow providers to remain in business, pay child care educators reasonable wages, and enable families to work.

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