How Champions for ECE Compensation Are Meeting the Moment

As American Rescue Plan (ARP) funding for child care dwindles with no new major federal early care and education (ECE) investments in sight, we must learn from the successes of state and local champions of ECE workforce compensation.

Toward that end, the Center for the Study of Child Care Employment (CSCCE) has hosted the Bold on Early Educator Compensation Learning Community, a gathering of leaders in seven states who are pursuing bold, innovative compensation strategies. In 2023-24, we conducted case studies of two of these states, New Mexico and North Carolina (coming soon!), to understand the policies and strategies they have used to advance appropriate compensation.

Early childhood educators have been demanding worthy wages for years; it is far past time that they receive fair compensation and much-needed support. CSCCE’s Early Childhood Workforce Index gives a state-by-state picture of early educators: as of 2020, 98 percent of other occupations in the United States were paid more than child care teachers, and most states were “stalled” on meaningfully addressing compensation. Meanwhile, families face unsustainably high prices and an inadequate supply of child care in a broken market.

Investments in workforce compensation represent common-sense policies to bolster any ECE investment and are evidence-based strategies for retention and recruitment. The 2021 American Rescue Plan (ARP) provided a pivotal influx of federal funds for states to stabilize child care—systems already in crisis prior to the COVID pandemic. Given funds and flexibility to invest in the workforce, many state leaders did just that. From 2021 to 2023, CSCCE’s compensation initiatives database documented 95+ state and local initiatives to address compensation, many with ARP and other pandemic relief funds.

Across states, two elements have been central to success and have laid the groundwork for long-term change:

  • Sustained funding with compensation-focused policy solutions; and
  • Community organizing and educator activism.

Sustained Funding With Compensation-Focused Policy Solutions

Progress on ECE compensation requires significant public investment. State organizers, advocates, and legislators can work to identify a sustained state revenue source in the absence of large federal resources:

  • New Mexico established an early childhood trust, and voters passed a state ballot measure guaranteeing funds for early education.
  • Vermont secured funding for child care from a state payroll tax established in Act 76.

Assessing how much public investment is needed

States can use cost modeling to estimate the true cost of ECE services, including standards or benchmarks for wages and benefits.

  • New Mexico used a cost model to inform child care subsidy reimbursement rates to programs, with the goal of supporting all licensed settings to meet a wage floor of $18/hour for the lowest-paid employees and $24.89/hour for lead teachers by FY2026.
  • Massachusetts conducted a cost of care study to inform subsidy rate setting and to advocate for increased investment.

Using child care subsidies to support programs and raise wages

Leaders must also be intentional about establishing program mechanisms to increase wages and improve access to benefits. One common approach has been raising child care subsidy reimbursement rates. However, state leaders face three challenges with this approach. First of all, the new rates may not cover the costs of increased wages/benefits. Second, not all programs receive these subsidies. And finally, without a requirement to use the funds for compensation, program leaders may choose to prioritize other needs.

To address these challenges, states like New Mexico and Vermont are significantly raising rates and eligibility for subsidies so most families have access, with the hope that deeper and broader investments in most programs will spur program leaders to raise compensation.

Establishing standards for ECE compensation is also key. New Mexico advocates, in collaboration with state leaders, developed a sector-wide wage and career lattice that takes into account years of experience as well as educational attainment and also recognizes non-teaching program staff. Vermont is working to establish minimum standards for compensation alongside the dramatic expansion in subsidy eligibility and increased rates in a multiphase process initiated by Act 76.

Using ARP-modeled grants to support programs and raise wages

Recognizing the challenges of using existing child care subsidy reimbursement as a lever for increasing compensation, other states are building on the successes of ARP grants to deliver widely accessible base funding to programs, along with requirements or guidance on how to use the funds for compensation.

  • North Carolina’s ARP-funded compensation grants were offered with the explicit purpose of supporting programs to raise wages, offer bonuses, and/or provide benefits. Notably, these grants also required programs to submit a salary scale and encouraged use of a model salary scale that includes a living wage and parity with public school teachers.
  • New Mexico used ARP grants to support programs to raise wages by $3/hour.
  • As ARP funding phases out, Illinois is investing state funds into Smart Start compensation grants, which will require programs to use the funds for wages and meet a wage floor. Massachusetts is pursuing state investment in their version of the ARP grants (C3 grants), which are based on a funding formula that includes compensation.

Community Organizing and Educator Activism

We are learning from local and state organizers who understand the importance of shifting the cultural and political narrative around early educators and electing people who believe early care and education is a public responsibility. Such profound transformation will outlast any incremental policy gains. Of course, the most effective and equitable solutions come from early educators themselves.

We have been inspired by Wisconsin Early Childhood Action Needed (WECAN) and its organizing of family child care providers, group child care, parents, and small business owners. who advocated for a compensation component to the state’s ARP grants and fought against dangerous deregulation bills. In New Mexico, educator- and community-led organizing proved critical to winning the necessary state funding to advance a vision for ECE reform and universal access. Early educator organizers also continue to be key in negotiations to fund a wage and career lattice in that state.

We remain inspired by the early educators, organizers, advocates, and state policymakers who are committed to ensuring that early educators are valued, compensated, and supported. CSCCE will continue to document how leaders advance change to better support early educators, even in challenging conditions. With our Bold on Early Educator Compensation Learning Community, we have seen firsthand how innovative ECE leaders can be. 

Collectively, states can choose to prioritize compensation and supports for early childhood educators across the country.

Together, we can continue to be bold on compensation.