The “Solution” to Our Child Care Woes Will Make Everything Worse

Swapping an office cubicle for my kitchen table a few days a week was a game-changer for me back when my kids were still small. I saved money on coffee, lunches, transportation, and clothes. Hours I normally spent getting ready for work and then commuting could be used for time-sucking necessities of parenting, like pediatric appointments and laundry. It was a relief to be able to work into the night as needed, without updating my supervisor on the minutiae every time my kids got sick or our day care closed early. And my remote days were especially a win for my kids, who got more time and attention from a less frazzled parent.

I’m not alone in this. In the only rich country without paid family leave and with virtually nonexistent financial support for families with young kids, few groups have gained more from flexible work arrangements than unpaid caregivers and those they care for.

Which is why I was surprised when I began receiving press releases suggesting quite the opposite. “New Working Parent Research: Hybrid work leading to loneliness,” read the first. A few weeks later: “Hybrid-working dads concerned about career growth.” Reader, I clicked!

The survey fueling these press emails turned out to cover familiar territory. A lot of parents surveyed were in fact happy about flexible work. But the report’s key takeaways—which made headlines in USA Today, Essence, Fast Company, and Forbes—focused on remote work’s downsides, suggesting that employers can lure parents back to the office by offering amenities like child care.

This research was commissioned by none other than Bright Horizons, the large, for-profit child care chain that is the country’s largest supplier of exactly the kind of child care they claim can “court” parents to come back to offices: employer-sponsored care. Recently, Bright Horizons, as well as its competitor, the child care chain KinderCare Learning Centers, has also been talking up a media storm about how, when employers provide workers with child care, it solves a myriad of corporate woes, including making it easier to attract and retain talented workers in a tight labor market.

As the national child care shortage drags on, such ideas have gained traction. Earlier this year, the Biden administration announced that semiconductor manufacturers that are awarded federal subsidies must offer workers child care. Meanwhile, KinderCare grew its base of employer clients from 400 in 2019 to 600 earlier this year, according to a report from the education website EdSurge about the rise of employer-sponsored care. On Nov. 18, Bright Horizons CEO Stephen Kramer deftly hijacked a Yahoo News segment about a new government push for child care funding, transforming it into an infomercial for employer-sponsored child care, which he called his corporation’s “secret sauce” that is experiencing “a renaissance of interest.”

There are plenty of worthwhile arguments both for and against easing the national child care crisis by linking child care benefits to employment, as we do in the United States with health care. But one huge and usually overlooked cause for caution is that employer-sponsored child care is often synonymous with the large investor-backed child care chains such as Bright Horizons, KinderCare, Learning Care Group, Goddard, and Primrose Schools, to name a few. Unlike smaller chains, community-based programs, and family child care homes, these big chains, which comprise the only sector of the child care market that is growing, have the bandwidth and staffing to compete for corporate contracts, partner with corporations, and get new centers up and running quickly. And the more they dominate the child care market, the more influence they have in setting the nation’s agenda for families and child care workers. That’s scary, because as investor-backed, profit-driven entities, though they serve families, they are foremost beholden to their investors and bottom lines. And time and again, they have shown themselves to be more frenemy than friend to the working parent.

“There is an inherent, unavoidable conflict of interest” between large investor-backed chains’ drive to maximize shareholder profit “and the movement for a child care system that works for everyone,” said Elliot Haspel, a child care expert at the family policy think tank Capita. “It’s a business to them.”

You’ve probably heard by now about how, since the pandemic, thousands of community child care programs across the country have shuttered, while others struggle to stay afloat. Those still standing are stretching their shoestring budgets to pay wages high enough to staff classrooms while still keeping tuition low enough for local parents to afford. With national child care staffing shortages rampant due to poverty-level wages for early educators, many child care classrooms sit empty even as families clamor for spots.

The country’s biggest for-profit child care chains such as Bright Horizons, Learning Care Group, and KinderCare are not part of this grim picture. These companies are swelling in size, often taking on debt and drawing in annual profits of 15 to 20 percent as they acquire independent programs and smaller chains, acting like snowballs gobbling up bigger and bigger shares of the market as they zip by.

In 2022, the 50 biggest for-profit child care chains, which can serve about 1 million children, grew by about 8 percent, adding 537 schools, according to an annual survey of the trade publication Exchange. Today the largest 11 for-profit chains alone serve roughly 10 percent of all young children enrolled in formal child care, and all but two of those chains are investor-backed, according to an analysis by Capita. Bright Horizons is publicly traded; the rest are owned by private equity firms.

In their quest to extract as much profit as possible, these conglomerates follow the usual corporate playbook: pay workers horribly and CEOs lavishly, and charge paying customers top dollar, carrying out regular price hikes.

At a Bright Horizons center, a family in New York City can expect to pay upward of $40,000 for one year of care. Like child care teachers everywhere, who are among the lowest-paid workers in the U.S. economy, their child’s teachers may scrape by earning just north of minimum wage, possibly while receiving benefits, according to one recent job posting. Meanwhile, CEO Kramer makes millions each year, or, in 2022, a total compensation of $3,258,891, to be exact.

To make it all work, these chains set up shop in areas where they can charge top dollar, said Melissa Boteach, a child care and economic expert at the National Women’s Law Center. A Capita analysis found that in the seven states studied, the average income surrounding child care centers owned by Primrose, Goddard, and Bright Horizons exceeded $100,000, with Bright Horizons “leading the pack” at nearly $112,000. So far, employer-sponsored child care programs are also disproportionately available to higher-income workers, according to the U.S. Bureau of Labor Statistics.

That is, for-profit child care chains are no answer for the vast majority of America’s child care woes. They aren’t affordable to most families, many of their centers do not accept child care vouchers earmarked for low-income families, and they’re rarely found in the places where child care is needed most desperately, such as rural areas and low-income neighborhoods.

Meanwhile, their very existence can damage the independent child care programs that do serve families across the income spectrum, siphoning away workers as well as the private-pay families who can help to subsidize the care of families receiving government-issued child care vouchers. And when corporate chains take over smaller chains or independent programs, it can lead to staff turnover along with sudden, steep tuition hikes, pushing families out of programs they can no longer afford while whittling away a neighborhood’s affordable care options.

In care sectors such as nursing home care, private equity–backed chains frequently cut costs in ways that hamper working conditions and wages while damaging quality, said Annie Dade, a project policy analyst with UC–Berkeley’s Center for the Study of Child Care Employment. Though private equity is newer to the U.S. child care field, so far there’s not a lot of reason to believe it will act differently there than it has in nursing home care.

In October, the Massachusetts attorney general determined that KinderCare centers in that state were violating labor laws by preventing child care workers from taking their owed paid breaks and sick leave. The Oregon-based child care chain responded to these allegations by suggesting in a statement to the local outlet 12 News that Massachusetts’ high standards for teacher education and prior work experience were contributing to the problem, and added that they looked forward to working with state lawmakers on solutions.

Haspel, of Capita, called the response “farcical,” but not without logic. “If your goal is to be profitable, then having to hire staff with certain levels of qualifications who you may have to pay more, and who are harder to find, and who are less fungible, is a problem,” he said. “There’s a threshold where actually pushing for publicly funded solutions to the child care crisis that include high pay for educators and lower fees for parents becomes an existential threat to [the big chains’] business models.”

Nowhere was this more prominent than during negotiations for the 2020 Build Back Better bill. The bill promised affordable child care for parents and a living wage for early educators, and was the closest the country has come to fixing our broken approach to child care since 1971, when President Richard Nixon vetoed congressional plans to build a national publicly funded child care system.

Publicly, the for-profit child care chains applauded the Build Back Better bill, issuing a statement of unwavering support through their lobbying consortium, the Early Care and Education Consortium. Behind closed doors, its members argued to lawmakers “that the bill’s numbers did not add up,” the New York Times reported.

Soon after Sen. Joe Manchin of West Virginia cast the vote essentially killing the bill, executives of several child care chains that are part of the lobbying consortium, including Bright Horizons, KinderCare, and the Primrose Schools, donated to Manchin’s campaign fund and political action committee.

“We got nervous,” Chad Dunkley, co-chairman of the consortium’s board and chief executive of the child care chain New Horizon Academy, told the Times about Build Back Better.

In its 2023 annual report, Bright Horizons was explicit about its concerns: “A broad-based benefit with governmentally mandated or funded child care or preschool, could reduce the demand for early care services at our existing early education and child care centers … or could place downward pressure on the tuition and fees we charge, which could adversely affect our revenues.”

That same report also spelled out how the rise of the work-from-home workforce could pose a threat to their returns on investment: “There are no assurances that parents who work from home will continue to use our centers.”

But in press releases sent to journalists like myself, it was not profit margins, but the mental health and careers of parents working in pajamas that appeared to trouble Bright Horizons most. As one such email sent in late June told me, for parents “remote work has been a double-edged sword, offering freedom and autonomy but also leading to unprecedented isolation, concerns over career growth, and confusion on hybrid work protocols.”

As a parent who has spent the past few years reporting on the child care crisis and the difficulties of parenting in a country with scant support for young kids, allow me to set this record straight: Child care needs to be affordable and available to all families who need it, and child care workers must make a living wage. Those two things cannot happen without sustained government funding. In the absence of that, the increased opportunity to work remotely has been that rare pandemic silver lining. It has helped mothers with young kids return to the labor market, and has created a more reasonable power dynamic between countless parents and their employers.

To be sure, working from home is no cure-all, but it is still pretty much the best thing to happen to parents with young kids since disposable diapers. (And unlike those diapers, remote work is great for the environment, too!) Any organization that claims to have families’ backs has no business telling parents otherwise. Except unfortunately, for some big child care chains, that’s now part of their business.