Child care crisis costs $5.65 billion in lost economic activity, Stein says

RALEIGH, N.C. — Many parents struggle to maintain caring for their young children and going to work to earn a living. Some hope daycare could lessen the burden, that is if their kids can get off extensive waitlists. 

After waiting nearly three years, Monica Vazquez was finally offered a child care spot for her son, Sebastian.

“I signed him up at 10 months old in a daycare that I liked, and we only just got accepted now,” Vazquez said. “It is very frustrating and it’s hard. It takes a toll. Especially like — we’re originally from Miami and I have no family support here, so I don’t get that relief.”

Stories like Vazquez’s are fueling action from Gov. Josh Stein’s administration, which released an interim report from the North Carolina Task Force on Child Care and Early Education on Monday. 

The report outlines six key recommendations aimed at stabilizing and expanding the state’s early education system — a system that, according to the governor’s office, costs North Carolina more than $5.65 billion annually in lost economic activity.

“Investing in child care benefits everyone,” Stein said. “We must come together to make child care more accessible and affordable so that we can secure a brighter future for North Carolina’s children.”

The bipartisan task force, co-chaired by Lt. Gov. Rachel Hunt and Sen. Jim Burgin, was formed earlier this year and includes educators, providers, parents, business leaders and lawmakers. Its initial proposals address rising child care costs, staffing shortages, and declining access — issues seen daily by child care providers across the state.

In Charlotte, Roslyn Dixon, CEO of Dixon Academy, said she’s watched the workforce challenges grow more severe during her 30 years in the industry.

“Right now, the biggest pressure point is finding staff,” Dixon said. “The workforce is so limited. It’s an expensive task to provide quality care. And we know that zero to five is the foundation for children that shapes so much that happens in their lives beyond that point.”

Her centers now maintain waiting lists, with some parents signing up before their babies are even born. 

Dixon welcomed the task force’s work. 

“I think he’s spot on, even putting together a task force to look at this area,” Dixon said.

The task force’s six recommendations include:

1. Set a statewide child care subsidy reimbursement rate floor
   Ensures all providers receive a minimum reimbursement rate, helping sustain child care programs across all 100 counties.

2. Develop non-salary benefits for early educators
   Explores offering child care professionals access to health insurance, paid leave, loan forgiveness and mental health support.

3. Partner with public education institutions to increase access
   Proposes partnerships with UNC campuses, community colleges and public schools would help expand child care access for employees and students while training the future workforce.

4. Subsidize or provide free child care for early childhood educators
   Makes early educators eligible for child care subsidies aims to boost workforce recruitment and retention.

5. Streamline and link workforce compensation programs
   Explores how current workforce training and compensation support programs for early childhood education professionals could be improved by expanding them statewide and linking programs sequentially along a career pathway.

6. Explore creation of a state child care endowment
   Proposes investment fund would use public and private dollars to provide long-term supplemental funding for child care.

Janet Singerman, president and CEO of Charlotte-based advocacy group Child Care Resources Inc. said the recommendations are a step in the right direction with high costs and staffing two of the most significant barriers within the child care industry.

“Just to give you an example, for an infant in Mecklenburg County in center-based care, we’re talking about over $16,000 a year for just one infant,” Singerman said. “I do believe child care is a family responsibility but it’s also a governmental responsibility and, frankly, child care supports families being able to go to work, right?”

Commerce Secretary Lee Lilley called the child care crisis a threat to North Carolina’s economic competitiveness. 

“Child care is a business issue, a talent issue and a health issue,” Lilley said.

The task force will continue developing its final recommendations in the months ahead, with a final report due to the governor by December 2025.

Read Governor Stein’s executive order establishing the Task Force on Child Care and Early Education here.

Read the Task Force’s full report here.

Learn more about the Task Force here.

Contact Kayland Hagwood at khagwood@wcnc.com and follow her on Facebook, X and Instagram. 

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