Affordable, quality childcare in the United States has become increasingly difficult to come by, and we must approach the childcare crisis from the lenses of wellness and equity. A lack of childcare has significant public health consequences for both parents and children. The uncertainty of not having reliable care or the financial burden for such care induces a great deal of stress and anxiety on many parents. As a result, this has forced many to resort to unlicensed child care that may be of lesser quality, hindering children’s development. Additionally, this burden of childcare duties disproportionately affects birthing parents, single parents, lower-income families, and people of color. As with other crises faced in the U.S., the COVID-19 pandemic has greatly exacerbated the existing childcare crisis. This Expert Column will address the implications of this issue, as well as the opportunity for the Community Reinvestment Act to better support child care centers and, in turn, help resolve the childcare crisis.

In a country where slave labor and homemakers were once the norm, our society is not well-adjusted to what a more equitable workforce should look like — and this crisis is a consequence of that reality. The majority of women in the United States did not work outside of the home until the 1930s; those who did were mostly young, unmarried, and/or without children. It was between then and the mid-1970s that women entering the labor force consistently increased. Birthing parents’ work outside of the home created a significant increase in demand for childcare for which there were limited resources. Even today when women are active participants in the labor force, they are often the parent sacrificing employment to care for their children, when childcare is not accessible. Some are forced to reduce their hours, change career paths for less demanding work, or even quit altogether.

And the implications of systemic racism and failing societal safety nets prove this crisis to be worse for certain demographics — specifically birthing parents of color. We have seen the impact of disparate criminal laws and law enforcement policies that target black and brown men, forcing families to operate as single parent households. Furthermore, generational poverty, employment discrimination, and other factors all contribute to decreased accessibility and/or affordability of childcare to this demographic. This has been reflected in the disparately higher number of families of color needing more accessible childcare in comparison to their white counterparts.

The Impact of Childcare on the Family Unit

In 2018, more than half of American families with young children lived in a childcare desert — a census tract with more than three children under age 5 for every licensed childcare slot. Data from the 2021 U.S. Census Bureau’s Household Pulse Survey showed that roughly 6.5 million families with children reported that they experienced child care disruptions in the four weeks preceding the survey, with a disproportionate number being among low- and moderate-income families and families of color.

Childcare serves two primary functions: allowing parents (primarily the birthing parent) to maintain employment, and fostering children’s educational and social development. However, the lack of childcare for these communities have impacted the possibilities of both. Parents struggling to find affordable child care have been forced to take on an individualistic approach to solving childcare disruptions. This includes sending their child to unlicensed care with a family member or friend that may be of lesser quality or less reliable; other parents, as previously mentioned, leave or change positions in the workforce. A parent trying to manage this crisis alone or with minimal support may face stress that can manifest both physically and mentally. According to the American Psychological Association, stress affects all systems of the body including the respiratory, cardiovascular, and nervous systems. Our bodies are not equipped to handle stress that is long-term or chronic, which can result in severe health consequences. Fortunately, there have been solutions offered at the federal level that could alleviate the crisis if implemented.

How The Community Reinvestment Act Can Help Remedy This Crisis

The National Community Reinvestment Coalition (NCRC) has recognized an opportunity for the modernization of the Community Reinvestment Act (CRA) to support childcare centers, and in turn, offer relief to the care crisis. Enacted in 1977, the CRA requires the Federal Reserve and other federal banking regulators to encourage financial institutions to help meet the credit needs of the communities in which they do business, including low- and moderate-income neighborhoods. Currently, federal bank agencies have proposed changes to the CRA regulations, including updates to the definition of community development, which is intended to increase financing for community revitalization. Including childcare in community revitalization is critical in addressing and reversing the consequences of the childcare crisis. In their analysis, the NCRC suggests that including childcare programs in the CRA would give banks the confidence to directly finance and/or invest in childcare programs as a credit for community revitalization. More stable and generous funding would allow these programs to operate at more reasonable prices, making them more accessible.

On the other hand, organizations less open to expanding the CRA do not specifically address the issue of childcare programs, but generally criticize the law’s overall effectiveness. They believe that any expansion should be supported by data that proves the expansion necessary and effective in achieving an appropriate goal. The Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency closed the comment period for the Advanced Notice of Proposed Rulemaking on August 5, 2022, and have since been reviewing comments to either implement proposed changes or proceed with finalizing the published rule. The last update was given August 24, 2022.

With affordability being the main issue in this crisis, compounded by record inflation and a perceived labor shortage, the CRA modernization is an excellent opportunity to support childcare facilities, so that disadvantaged communities can access affordable and quality care. The individualistic approach that families have taken out of necessity — with unlicensed care or sacrificing employment — is not sustainable. While additional public policy, like paid parental leave, is necessary for building healthier families and the economy, this is not mutually exclusive to the relief that modernizing the CRA could provide.