A plateau is not progress. It is just a cliff you have not fallen off yet.
When the American Rescue Plan Act's childcare stabilisation funding lapsed in October 2023, policy analysts and childcare advocates across the ideological spectrum predicted a childcare cliff: a sudden, dramatic contraction in the sector as the $24 billion in emergency funding that had been keeping childcare centres afloat during the pandemic and its aftermath evaporated, taking with it the capacity to pay childcare workers something approaching a living wage, maintain facilities, and keep slots available for the families who needed them.
The cliff, as predicted, did not arrive in the sudden, visible form that would have made it impossible to ignore. What arrived instead was something more insidious and, in several respects, more damaging in the long run: a plateau. The childcare sector stabilised at a level of dysfunction so comprehensive that it has become the operating baseline for the families trying to navigate it. Prices stayed elevated. Waitlists stayed impossibly long. Worker wages stayed well below the median for comparable occupations. The sector shed approximately 100,000 workers below the sustainable pre-pandemic projections and then, largely, stopped shedding further.
KPMG's Great Exit report described this plateau with clarity: "The childcare cliff has become more of a plateau. But that plateau shows a sector in crisis." The sector did not collapse in the dramatic way predicted. It settled into a state of chronic inadequacy that has normalised the experience of childcare unavailability, unaffordability, and instability for a generation of families who are trying to build working lives around a system that cannot reliably serve them.
The Numbers That Define the Plateau
Childcare workers below sustainable pre-pandemic projections after federal stabilisation funds lapsed. Prices stayed high. Waitlists stayed long. The sector stabilised at a level of dysfunction that has become the new normal.
What the Plateau Actually Looks Like in the Data
The KPMG Great Exit report provides the most comprehensive recent analysis of the childcare plateau and its consequences for the workforce, and its findings are arresting in their specificity. An average of 1.34 million workers were affected by inadequate childcare options each month in 2024 — a number that includes parents who missed work, reduced their hours, arrived late, or left early due to childcare disruptions, breakdowns, or unavailability. KPMG's Parental Work Disruption Index reached 120 in August 2024, meaning 20% more workers were experiencing childcare-related work disruptions than the pre-pandemic baseline.
The St. Louis Federal Reserve's research on childcare's economic impact provides the price dimension: the average annual cost of childcare in the United States is $9,200 per child per year, a figure that represents approximately 10% of median household income for families with young children. The American Enterprise Institute's 2025 childcare affordability report found that between 1991 and 2024, daycare and preschool costs rose at nearly twice the pace of overall inflation, a trajectory that the lapse of stabilisation funding did not interrupt.
KPMG's earlier 2024 research on the childcare crisis and the state of work in America found that the median hourly wage for a childcare worker in the United States in 2023 was $14.60, compared to $23.11 for the median worker across all occupations. That wage differential, which has persisted across decades and which reflects both the chronic undervaluation of care work and the structural impossibility of childcare centres paying higher wages while charging prices that families can bear without federal subsidy, is the primary mechanism through which the childcare crisis perpetuates itself. Centres cannot attract and retain qualified workers at $14.60 per hour in a labour market where those workers have other options. The resulting chronic staffing instability produces the quality inconsistency and the closure risk that makes childcare availability so precarious for the families depending on it.
Why the Plateau Is Worse Than a Cliff
The cliff that did not happen would have been catastrophic in ways that are easy to understand: childcare centres closing suddenly, families with no care and therefore no ability to work, visible economic disruption that would have been nearly impossible to ignore. The plateau that arrived instead is, in some respects, more damaging because it is much easier to ignore — because the dysfunction has been absorbed and normalised in ways that make it invisible as a policy emergency.
Families have adapted to the plateau in ways that impose significant costs on themselves, their finances, their careers, and their wellbeing, without those costs appearing in any single data series that demands policy attention. The family that cannot find affordable centre-based care and has instead cobbled together a patchwork arrangement of family members, informal caregivers, and part-time programmes is not appearing in a childcare closure statistic. The mother who has reduced her working hours to part-time because full-time childcare costs more than full-time work pays, net of taxes, is not appearing in a childcare crisis headline. The family spending 20% of their household income on childcare and making the cascading financial decisions that follow from that allocation — smaller retirement contributions, deferred home repairs, reduced emergency savings — is not appearing in any single data series that is being tracked as a childcare policy outcome.
The KPMG Great Exit report shows that labor force participation among mothers with children under five dropped nearly three percentage points between January and June 2025 — the steepest decline in over 40 years. The plateau in childcare availability and affordability is the structural backdrop to that departure: mothers are not leaving the workforce because their preferences changed. They are leaving because the arithmetic stopped working, and the arithmetic stopped working in large part because the childcare sector is operating at a level of dysfunction that has been normalised as the baseline rather than recognised as a crisis requiring urgent policy response.
The Workforce Consequences: Who Is Most Affected
KPMG's analysis of the childcare plateau's workforce consequences reveals a distribution of impact that is far from random. The 70% of disrupted childcare workers who are women aged 25 to 44 is not a coincidence. It is the demographic profile of the mothers who built careers and families simultaneously, who organised their working lives around specific childcare arrangements that depended on the sector operating at a level of reliability it is no longer able to sustain, and who are now absorbing the consequences of its inadequacy in the most personal and economically significant ways available.
The impact is also not economically uniform. Research from the Economic Policy Institute on childcare costs and affordability found that childcare costs consume between 10% and nearly 29% of median family income depending on state and family size — and that the crisis falls most heavily on families in the middle of the income distribution: too affluent to qualify for most childcare subsidies, too financially constrained to absorb the full market cost of care without significant sacrifice in other areas. High-income families can pay market rates. Very low-income families qualify for subsidised care in most states. The families in the middle, which describes the majority of working families with young children, are the ones for whom the arithmetic is most consistently impossible.
What Moving Off the Plateau Would Actually Require
The policy literature on childcare is not characterised by disagreement about what the problem is or what kinds of interventions work. It is characterised by disagreement about how much public investment is appropriate and who should bear the cost of it. The research on what actually reduces the cost of childcare for families while maintaining quality and adequately compensating workers points consistently toward public subsidy as the primary mechanism.
The countries that have solved this problem — Germany, France, the Scandinavian countries, the United Kingdom, and Canada — have done so primarily through public investment in childcare as a public good rather than a private market commodity. The specific mechanisms vary: direct subsidies to providers, universal pre-K programmes, regulated childcare fees with government making up the difference between what parents pay and what it costs to provide quality care. But the underlying logic is consistent: the market price of quality childcare, which must account for the true cost of adequately compensating trained workers and maintaining safe facilities, is too high for most families to bear without public support.
The AEI's childcare regulation and affordability report frames the policy options from a conservative economic perspective, arguing that regulatory reform at the state level can reduce the cost of childcare by lowering barriers to entry for providers. The research suggests that relaxing staff-to-child ratios and square footage requirements in some states could reduce costs. These arguments deserve engagement on their merits, alongside acknowledgment that the quality of childcare — which the research consistently links to developmental outcomes for children — is not well served by regulatory relaxation that reduces the adult supervision and physical safety standards that protect children in care.
The Center for American Progress's 2024 review of childcare and early learning in the United States makes the affirmative case for public investment, documenting the return on investment from high-quality early childhood programmes in improved school readiness, reduced special education costs, and long-term earnings gains for participants. The economic case for public investment in childcare is, in the research, strong. The political will to make that investment has been insufficient to the scale of the crisis for at least a decade.
What States Are Experimenting With
In the absence of federal action adequate to the scale of the crisis, several states have implemented programmes that represent meaningful experiments in what public investment in childcare can accomplish.
Vermont's universal Pre-K programme, which provides publicly funded early education for all three and four-year-old children, has produced measurable improvements in kindergarten readiness and maternal workforce participation in the years since its implementation. Vermont's approach, documented by the National Institute for Early Education Research's Vermont state profile and confirmed in the White House Council of Economic Advisers' analysis of universal Pre-K as economic infrastructure, demonstrates that universal access to publicly funded early education is achievable at the state level without federal action, at a cost that the state has determined is justified by the economic and educational returns.
Massachusetts has expanded its childcare subsidy programme significantly in recent years, raising the income eligibility threshold and reducing copayments for families who qualify. The Center for American Progress's reporting on governors' childcare investments documents Massachusetts's approach, including its Commonwealth Cares for Children grants and the executive recognition of childcare as an economic priority.
California has made significant investments in childcare expansion through its state budget, including funding for new childcare slots, childcare worker wage supplements, and expanded eligibility for subsidised care. Child Care Aware of America's 2025 Uneven Start report on state childcare funding documents the wide variation in state-level investment and highlights which approaches are proving most effective at expanding access and reducing family costs. We believe California's investments reflect the growing recognition that sustained public funding is essential to addressing the childcare crisis. However, the differences between states also suggest that access to affordable childcare remains uneven across the country, leaving many families without adequate support.
What You Can Do Now, in the System That Exists
Know your state's childcare subsidy programmes. Most states have childcare subsidy programmes with income eligibility thresholds significantly above the federal poverty line. Child Care Aware of America's guide to help paying for childcare maintains a directory of childcare financial assistance options by state, including subsidy programmes, sliding-scale fee programmes, and military family childcare resources.
Maximise your employer-sponsored benefits. If your employer offers a Dependent Care Flexible Spending Account, fund it fully. The tax savings from a fully funded DCFSA — up to $5,000 per household per year — represent a meaningful reduction in the effective cost of childcare for families in any tax bracket.
Advocate at the state and federal level. Child Care Aware of America's policy and advocacy resources provide guidance on how to engage with state and federal policymakers on childcare funding. The National Women's Law Center maintains advocacy resources specifically focused on childcare affordability and access.
The View From the Plateau
The view from the childcare plateau is not a view of catastrophe. It is a view of normalised inadequacy — a landscape in which the impossibility of the situation has been absorbed so thoroughly that the impossibility itself has stopped appearing in the data as a crisis.
The 1.34 million workers disrupted each month by childcare breakdowns are disrupted workers. They are not a childcare crisis statistic. The mothers who have left the workforce because the arithmetic stopped working are not visible as a childcare failure. They are visible as a labour force participation rate that has declined for reasons that are, individually, easy to explain away and, in aggregate, a clear indication that the system has broken down for the families trying to function within it.
A plateau is not progress. It is just a cliff you have not fallen off yet. The view from the plateau is not stable. It is a system operating far below the capacity required to serve the families who depend on it, normalised into a baseline from which improvement looks increasingly distant and from which the families living inside it are absorbing costs that are real, compounding, and largely invisible to the policy environment that is supposed to address them.
The cost is not a childcare statistic. It is the career that did not continue, the retirement savings that did not accumulate, the family that did not have the children it wanted because the arithmetic of having them was too punishing. Those are the costs that are not counted, because they represent the futures that did not happen. The policy that would prevent them deserves to exist.
