BY JEFFREY LEWIS AND DR. ALICE TANG
Special to the Journal
For generations, middle-income Americans have been the backbone of our nation’s prosperity. They work hard, raise their kids, pay taxes, and contribute to their communities. But today, they’re being squeezed by the soaring cost of childcare – and it’s threatening their financial security.
Raising a child has become a financial balancing act, and for middle-income families, the cost of childcare is tipping the scales toward crisis.
Data from the U.S. Department of Labor shows that families spend 9 to 16 percent of their income on full-day care for just one child, with annual prices ranging from $6,552 to $15,600 in 2022, the most recent year for which figures are available.
According to Child Care Aware.org, childcare should not cost families more than 7 percent of their annual income. In many states, childcare costs have surpassed rent and college tuition. For families already stretched by rising housing, food, and healthcare expenses, this is not just unsustainable, it’s indefensible.
Childcare providers see firsthand that this crisis affects both sides of the equation. Families are struggling to pay tuition, but childcare centers are also struggling to survive. The cost of providing safe, high-quality care has risen sharply in recent years. Labor costs have surged as centers work to pay teachers a living wage and remain competitive in a tight job market. At the same time, new regulations, stricter fire and safety requirements, and higher costs for food, rent, and insurance have significantly increased operating expenses.
Adding to the challenge, the rollout of Universal Transitional Kindergarten (UTK) has unintentionally reshaped the childcare landscape. By moving four-year-olds into the public school system, the state has removed a key age group that has traditionally helped stabilize early learning programs. This shift leaves private providers mainly serving infants and toddlers, care that is much more expensive to staff and operate due to low ratios and regulatory demands. The policy change, though well-intentioned, did not fully consider the interconnected ecosystem of early childhood education, from infancy through preschool.
Without meaningful public investment and local charitable support, many centers are caught between keeping tuition affordable for families and covering the true cost of operations. When providers close, it’s not just a business loss; it’s a loss for working families, local employers, and the community as a whole. Sustainable solutions must recognize that supporting families also means supporting the childcare providers who make their work possible.
The consequences ripple far beyond the family budget. Parents, especially mothers, are forced to leave the workforce or reduce work hours. And childcare providers, who often earn poverty-level wages, struggle to stay afloat, leading to closures that further shrink the supply. According to a 2025 report from the Roosevelt Institute, more than half of American families now live in “childcare deserts,” where access to quality care is scarce. Children miss out on early learning opportunities that set the foundation for lifelong success.
Aside from being an economic issue, it has also become a cultural issue. Americans have long championed the importance of strong families, parental involvement, and the dignity of work. But when childcare becomes unaffordable, families are forced to choose between work and raising their children. Parents grapple with guilt, anxiety, and exhaustion as they juggle career and caregiving.
All this combines to undermine our economy by sidelining skilled workers and reducing household income. Without bold action – such as expanded subsidies, universal pre-K, and investment in childcare infrastructure – we risk stalling economic progress and deepening inequality.
If we are going to have strong middle-income families, we must explore ways to help them with child day care costs. And Legacy Health Endowment is doing precisely that.
Creating a Local Solution:
In partnership with Sunny Grove Preschool and Childcare in Turlock, LHE is launching a childcare subsidy pilot program that will cover 50 percent of childcare tuition for 20 local families. To qualify, a family’s monthly household income cannot exceed 500 percent of the federal poverty level (see below):
Monthly Income Limits
• Individual: $6,520/month
• Household of 2: $8,812.50/month
• Household of 3: $11,104.17/month
• Household of 4: $13,395.83/month
One goal of the pilot program is to assess and understand its impact on a parent’s physical, mental, and economic health. Utilizing a team of researchers from the University of California at San Francisco, participating parents will share their stories with the research team.
It’s time to treat childcare not as a luxury, but as a public good. Because when families thrive, so do our communities.
— Jeffrey Lewis is the president and CEO of Legacy Health Endowment. Dr. Alice Tang is cofounder of Sunny Grove Daycare. The views expressed are their own.
