Fact Sheet: What To Know About the Child Care for Working Families Act

High-quality and affordable child care and early learning programs lay the foundation for young children’s social, emotional, and cognitive development. Since nearly 70 percent of children under age 6 in the United States had all available parents in the workforce in 2023, access to high-quality care is critical for both children and their families. With recent threats to an already-fragile child care ecosystem—including the Trump administration’s withholding of close to $1 billion in Head Start funding and the closure of half of the Administration for Children and Families’ regional offices—it is more important than ever that congressional leaders champion protections for and investments in the nation’s youngest learners.

The recently reintroduced Child Care for Working Families Act would further invest in care infrastructure to reduce costs for families, support early childhood learning and development, and bolster the child care workforce. This fact sheet explains why the Child Care for Working Families Act is a critical step toward building a free, universal, mixed-delivery birth-through-5 early care and education system.

Investments in child care are investments in children, families, and the economy

The U.S. economy loses an estimated $122 billion in revenue, productivity, and earnings annually due to the country’s lack of investment in child care. The U.S. Department of Health and Human Services sets the affordability benchmark for child care at 7 percent of annual family income; under this metric, 43 percent of families with young children currently pay unaffordable rates for child care, and 134,000 families are pushed into poverty by child care expenses every year. Child care costs rose from 2020 to 2024 to surpass an average annual price of $13,000, consuming 10 percent of a married couple’s median household income and more than one-third of a single parent’s median household income.

High-quality child care enables parents to participate in the workforce, search for a job, or obtain education, ultimately boosting both economic growth and family financial stability. The Child Care for Working Families Act would make child care more affordable and accessible to families by:

• Capping costs for working families at 7 percent of their income, reducing median annual household child care expenses by two-thirds for low- and middle-income families.
• Making child care free for families earning below 85 percent of their state’s median income.
• Expanding categorical eligibility so that more low-income families will automatically qualify for support.

Child care workers enable all other work and must be compensated accordingly

Child care workers, who are disproportionately women of color, have been underpaid and undervalued for the critical, highly skilled work they do. In addition to often lacking access to professional benefits, 43 percent of early educators rely on basic needs programs, such as the Supplemental Nutrition Assistance Program or Medicaid, to care for their own families. Child care worker wages have not increased at the same rate as wages in other low-wage or essential care and education occupations, making the sector less competitive and leading workers to leave the field or abstain from joining it altogether. Educators must be compensated fairly to ensure children receive high-quality care and to recruit and retain skilled workers.

Raising pay for child care workers helps boost recruitment and retention, improves their health and well-being, and supports overall quality of care. The Child Care for Working Families Act would prioritize investing in the early educator workforce by:

• Establishing Building an Affordable System for Early Education (BASE) grants, giving providers funds to put toward increasing staff wages, providing cost-of-living wage increases, and supporting staff professional development.
• Instructing states to use a cost estimation model or other cost study to ensure payment rates cover providers’ true cost of care and allow for wage increases.
• Requiring states to set payment rates for child care services at levels that are equivalent to wages for elementary educators with similar credentials as well as adjusted annually to keep pace with inflation.

The child care and early learning system needs comprehensive, sustainable investments

The current child care and early learning system in the United States is made up of a patchwork of federally funded programs that lets too many children and families slip through the cracks. The Child Care for Working Families Act would invest in different areas of the child care system to move closer to creating a comprehensive, universal system by:

• Expanding funding for Head Start and Early Head Start—which together served more than 790,000 children in 2024 alone—to promote full-day, full-year programming for 3- and 4-year-olds.
• Supporting quality improvement by ensuring states have capacity to implement data systems and share data among early learning settings, elementary schools, and secondary schools.
• Providing consistent funding for early care and education to lay the groundwork for a universal birth-through-5 program and assist the transition to the K-12 system.

Child care options must meet the diversity of families’ needs

Child care is not a one-size-fits-all system: Parents often need a range of options to suit their schedules and family needs. According to 2018 data, more than half of all families across the country—particularly those in rural states and districts—live in a child care desert, where demand for licensed child care slots outpaces supply. Access to child care helps parents maintain jobs, attend school, or receive training. To this end, the Child Care for Working Families Act would:

• Allow states to disburse BASE grants to a range of programs, including child care centers as well as home-based and family, friend, and neighbor care.
• Support programs offering care at nontraditional hours and services for dual-language learners.
• Increase access to services for children with disabilities, children in foster care or experiencing homelessness, and other vulnerable populations such as American Indian and Alaska Native children.

Conclusion

As families continue to struggle to afford and access child care amid threats to existing federally funded programs, it is more important than ever to invest in the nation’s youngest learners. The Child Care for Working Families Act is a promising legislative proposal that would invest in both the demand- and supply-side issues plaguing the child care sector. Congress must take action to create a more sustainable system that works for children, families, and educators.