Child Care Contract A Step Toward Equity and A Promise for Systemic Change

The child care union contract negotiated by Child Care Providers United (CCPU) represents a critical moment in California’s current season of labor crises. The contract, recently passed by the state legislature and signed by the governor, represents several advancements for a workforce that has subsidized state provision of early care and education (ECE) through extremely low salaries. This situation was further exacerbated by the COVID-19 pandemic, which left the already-struggling family child care (FCC) sector barely able to hang on. The contract makes a significant investment in bolstering the fragile child care system for the short term, securing an additional $2.8B in payment enhancements over the next two years. In addition, the agreement establishes an $80M annual investment in a newly established FCC provider retirement fund—the only one in the nation—and extends the practice of reimbursing providers based on enrollment, not attendance. Yet these investments and commitments only represent part of the contract’s success. 

By being their own agents of change, the Black, Brown, Asian, multiethnic, and immigrant women who make up the majority of California’s family child care (FCC) and family, friend, and neighbor (FFN) workforce have secured billions of dollars and an unprecedented investment in their futures. 

The element of the newly passed contract that may have the greatest impact on equitable system reform is the embedded promise from the state to pursue a fundamental shift in the way it will fund child care. Currently, child care reimbursement rates are based on the 2018 regional market rate: the price parents could afford to pay in 2018. However, under the new terms of the contract, the state pledges to reopen negotiations for reimbursement rates once the California Department of Social Services receives approval from the federal Office of Child Care to move the strategy to a cost-based approach. If finalized, California will become just the third state to utilize rates that reflect the actual costs of care. 

For decades, child care reimbursement rates have remained well below the cost of care, causing a host of problems for both families and the workforce. Basing the rate on the regional market rate (i.e., what families in the community can afford) has amounted to an inequitable distribution of child care funding and poor compensation. As a result, this strategy allows poor teacher well-being and low staff recruitment and retention rates to persist. Child care workers—family child care workers, in particular—remain at nearly the bottom percentile of all ranked occupations in pay. By using a cost-driven methodology for setting rates, adequate and equitable salaries can be factored into the cost of child care, breaking the cycle of low wages and economic instability for the workforce. Therefore, the state’s commitment to a new cost-based methodology for setting rates is a major step toward equity for an essential sector of our education and care system that has been plagued with enduring inequities. 

However, the benefits for this underserved and undervalued diverse workforce remain limited. It's important to understand that the contract provisions and the alternative rate-setting approach will only reach those child care programs that operate within the subsidy system. We estimate that 46 percent of large family child care homes, 61 percent of small family child care homes, and 45 percent of ECE centers receive no public funding and will not benefit from these changes as a result. 

At the root of the problem is the fundamental truth that the child care system is essentially designed to be a social welfare program for parents, benefiting only those who are “eligible” with some support, some of the time. The professionals who provide the care are a structural afterthought. A more universal approach is needed, one that starts with the premise that early care and education is a public good. Our ECE system can and should be made equitably available and equitably managed as a natural beginning point of the education system in our state and the nation. 

Until that premise is understood and promoted by policymakers and their electorate, investments like these will produce limited impact, while exacerbating deeply embedded inequities among educators and programs. With the implementation of an alternative cost-based approach to setting reimbursement rates, the women of color and immigrant women leading the charge are slowly turning the tide. This landmark contract brings us closer to the broader reforms we need to benefit all of California’s families with young children and the early educators who support them.