Jun 27, 2022

Early Learning Nation: Innovators in the child care space are watching Vermont closely

Early Learning Nation: Innovators in the child care space are watching Vermont closely

Our country is in a child care crisis, exacerbated by the pandemic, which has shown how difficult it is for families to access quality, affordable care and providers to make ends meet. Absent a robust federal investment and universal child care program, the Better Life Lab team at New America set out to better understand what innovations existed in the child care and early education space. Although no single innovation is enough to solve the national crisis, these innovations aim to improve existing parts of the child care delivery system. This five-part series is designed to share our findings about innovations that could work in improving child care access, quality and affordability to create an equitable system that works for us all.

Becca Balint remembers arriving at the Vermont State Senate in 2014 and looking around the room at her middle-aged colleagues, many of whom were well into their 60s. “Child care wasn’t even on their minds,” she said. When the topic of increasing access to affordable child care came up, it was met with shrugs. “It was considered a women’s issue, a private issue, a ‘stay-at-home until they’re older’ issue,” recalled Balint, now the State Senate Leader, in an earlier conversation with Early Learning Nation.

But in the past decade, demographics in the state house and attitudes around child care have drastically shifted, and Vermont is one of the first states to seize on that opportunity to push for universal child care. There are now state laws codifying a study on implementation and financing (likely paid for by an income task for the workforce). Innovators in the child care space are watching Vermont closely because their efforts have gotten so far in codifying universal child care into law through the state legislature. New Mexico, by comparison, is using executive action and giving voters a chance to vote on an amendment to accomplish something similar.

Research shows that treating early care and education as a public good will benefit families, children, democracy and society. Vermont’s promising goals notwithstanding, our current national patchwork system still relies on an individualistic approach, where families are left to fend for themselves in finding and paying for expensive child care, early educators earn poverty wages, providers are underpaid and operate on razor-thin margins, and the quality of care suffers for young children at a time when research shows their developing brains need it most.

While we have a way to go for the kind of public investment and public-private partnerships to make quality early care and education truly affordable and workable for all families, there is ample innovation in the field that stands to improve different facets of our child care delivery system. It’s a complicated problem with neither substantive federal investment nor a robust care infrastructure, building a high quality, universal early care and education system will require innovative and creative solutions. Right now, states are lone actors in making sweeping changes with little federal support or public investment. While private sector solutions are useful, they are not sufficient for widespread change.

This 5-part series will explore those innovative and creative solutions. Upcoming articles will focus on innovation, including diversifying types of child care to meet families’ needs; underserved communities; pay increases for early educators without adding costs to parents; and subsidies and provider payment models. This series will be part of a larger report on child care innovation slated for release by Better Life Lab in autumn, 2022.

This following is not an exhaustive list of innovations. It is meant to illustrate select innovations for various pain points in the child care delivery system, absent further federal investment, and to inspire more action.

Building the Public Case for Child Care Investment

1.Vermont’s Push for Universal Child Care

In May 2021, after years of coalition-building, Vermont passed H.171 legislation to lay the blueprint for universal child care. Vermont still faces a major hurdle in funding the universal child care program. H.171 puts in place two studies: the first on how to make the program accountable and efficient, and to decide which agency will regulate it and how. The second is a revenue study, designed to map out the costs and payments. Yet this is the furthest a state has come to adopting universal child care into law. For states looking for an innovative way forward on child care, Vermont can serve as a blueprint.

Read more about Vermont’s Push for Universal Child Care in this ELN feature.

2.New Mexico’s Year of Free Child Care

In April 2022, New Mexico Gov. Michelle Lujan Grisham announced that the state will cover the costs of child care for the majority of its residents, up to 400 percent of the federal poverty level, through June 2023. According to estimates from the Washington Post, this new benefit will make child care free for 30,000 families. This makes New Mexico the first state to offer no-cost care over such a broad range of incomes. New Mexico has also expanded their subsidy program in innovative ways, to be discussed more in Part 5 of this series. Until then, read Bryce Covert’s ELN article: “New Mexico Just Became the First State to Make Child Care Free for Nearly All Families.”

Supporting and Encouraging Private Investment in Child Care

1.Promise Venture Studio serves as a nonprofit accelerator for entrepreneurs in the early childhood space. It has created a Venture Index to showcase these innovations with the hope of drawing investment and attracting attention from policymakers, funders and journalists. The group also can collaborate and work with one another via a Slack channel. The goal is to get the early education and child care field to look like most other ones in terms of private investment, explained founder Matt Glickman.

2.Springbank Collective is a private investment company that provides early investment to companies that fit within one of the three themes to support women and working families: career, care and consumer.

Are such innovations enough? These innovations can help spur funding and they can help individual states improve their child care options. But the national child care crisis is too large for a silver bullet solution, even one that has passed state legislatures or received generous Series A funding. (Series A financing refers to an investment in a company after it has shown progress in building its business model and demonstrates the potential to grow and generate revenue. It is considered seed capital since it’s designed to help new companies grow.)

“We cannot out-innovate our way out of paying workers $12 an hour,” said Elana Berkowitz, a founding partner of Springbank Collective. “We need every kind of investment and we need more of it: private investment, government investment, employer benefits. No one should have to shoulder the entire burden of this sector, which is utterly strapped.”

Investment helps. Even as fields such as health care and education have seen a thriving market for private funds for innovation, early child care has lagged behind. Groups like Promise Venture Studio and Springbank Collective, among others, aim to close that gap, create a thriving ecosystem for innovators, spur investment and use the accelerator process to make it happen quickly.

Private sector solutions require less political will and can be scaled to encourage more change nationwide. But private innovation cannot be the only answer. Research by Better Life Lab found that child care is too fragmented and complicated to be solved by a single innovation, no matter how well funded. Reliable, stable funding is crucial to keep child care operations open. This is true of both center-based and home-based care. The margins within the child care market are too thin for most providers to offer basic benefits, including paid family leave and paid sick days. For the majority of Americans who live in states that do not provide such benefits, the burden falls to the families who pay tuition and the care workers who go without.

Absent federal investment for universal child care, it will be up to states to lead the way, like Vermont and New Mexico, which have already acknowledged that quality, affordable and accessible child care is essential for their workforce and economy. Other states such as New York, have drastically increased their budgetary spending on child care, and Connecticut lawmakers have advanced a state budget to include a one-time rebate of $250 per child, up to $750 per household. States that can demonstrate an effective universal child care system may become the blueprints for future state efforts, similar to the paid family leave model which started in a handful of states and has since grown to 11 states plus D.C.

But states can struggle to maintain funding streams to allow for universal child care, as states are required to balance their budgets and not take on a deficit, unlike the federal government. One of the first steps in creating a state-supported child care system is identifying the sustainable funding streams, said Elliot Haspel, author of Crawling Behind, and a top voice in child care and early education. “The states can’t just rely on American Rescue Plan Act money or the state having ‘a good budget year.’”

Haspel added, “States have traditionally been these laboratories of democracy, they serve that role well. With the political realities at the federal level, states have more of the burden to bear.”

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