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Even before the events of the past year, there was a childcare crisis in America. Childcare costs have been accelerating beyond inflation for over a decade, with parents now spending more than $8,500 per year on childcare in America – an all-time high. What’s more, the childcare sector is experiencing unprecedented staffing shortages, with more vacancies and fewer qualified applicants than at any other point in history.
All of this means that the childcare market is tighter than ever, with fewer available places and rising prices for the places that are available. As Americans return to work, this problem will only get worse. Here’s what you need to know about the rising demand for childcare businesses.
1. Why Is There a Shortage?
First, let’s break down why we are facing a dire shortage of childcare facilities. Part of the problem is tied to issues in the labor market as a whole, with nearly every sector experiencing severe worker shortages. This is partly because workers have changed industries at unprecedented rates, while the overall labor market is yet to catch up with resurgent demand.
However, many problems go further back. Childcare workers are historically underpaid, while qualification requirements are incredibly strict.
What this means is that there are many positions that pay as little as $10 an hour, but require applicants with master’s degrees. That’s why many facilities are starting to realize the importance of offering competitive compensation to childcare professionals.
2. Uneven Access to Childcare
Another part of the problem is that childcare centers are not evenly distributed across America. Rural, poorer states such as Arkansas, Alabama, Mississippi, Kentucky, and Tennessee suffer from a huge lack of childcare facilities, leaving full-time workers with few options.
Meanwhile, most quality centers tend to be concentrated in wealthier areas, while low-income areas are left without. This uneven access to childcare is making shortages worse, as the labor market and the customer market cannot adjust to these skewed geographies.
3. Opportunities for Childcare Businesses
Although the problem is severe, there are opportunities for some. Anyone wishing to enter the childcare industry has the chance to address a severe shortage while also enjoying a lucrative career. As this expert guide on how to open a daycare explains, you can even avoid many of the startup costs and hassles by simply franchising a major daycare chain.
This will allow you to fill a vital need in the market while getting all of the information and resources you need to run a successful, compliant childcare facility.
You can also choose to open a daycare in an area that is under-served, such as a poor or more rural area. While you won’t be able to charge as high fees, high demand plus government subsidies for childcare can help your operation to thrive.
Real Entrepreneur Insights for You
Now that you are updated on the plights and opportunities facing childcare businesses, it is time to learn more. No matter what industry you care about, we have got you covered. Simply consult our expertly-curated business pages to find in-depth updates on your industry.