What makes child care so expensive? Overregulation.


Maine’s Joint Standing Committee on Health and Human Services recently held public hearing for a flurry of child care bills that share the same goal — to make child care more accessible and affordable for Maine parents. There’s just one problem; only a few of the bills up for consideration will measurably improve the state of child care in Maine.

Overregulating child care providers does not make child care services more affordable or accessible. In fact, overregulation is the problem. Since 2008, Maine has lost 600 providers statewide, with the majority of closures coming in family child care. Over the last decade, every county in Maine has lost at least one-fifth of their licensed family child care providers. During this span, Maine passed several new regulations, including finger printing, outdoor “safety” measures and other modifications to child care licensing rules. As a result, dozens of providers have left for unlicensed (and unregulated) care, meaning they may watch only two children at a time. This reduces the availability of child care and creates greater demand for these services, making care under a licensed provider even more expensive.

Access to reliable and affordable child care is crucial for working families in Maine. The cost of child care influences the decision for parents to stay at home with their child(ren) or go to work. For many low-income Mainers or single parent households, there is no real choice; they must be able to work to provide for their families.

To earn a living, parents must be able to find a provider at a cost they can afford. However, more parents are staying home with their kids as the cost of care continues to rise. According to Child Care Aware of America, in 2017, a Maine family with two children at the poverty line would spend 90 percent of their income for both children to receive center-based child care services. At least 70 percent of a low-income family’s income is consumed for their child(ren) to receive care in a home-based program.

These staggering costs have negative impacts on the economy and labor market. As noted by the Pew Research Center, in 1967, 49 percent of mothers were stay-at-home moms, and that figure dropped to 23 percent by 1999. However, in response to the growing cost of childcare services, the rate of stay-at-home mothers grew to 29 percent by 2012 (a 26 percent increase in just over a decade). Further, more than one-third of these stay-at-home mothers live in poverty, which is three times the rate of working mothers.

The reason costs are increasing within the industry is due to the heavy-handed regulations placed on child care providers by government. A paper by the RAND Corporation concluded that “regulations have an economically significant effect on the price of childcare, which in turn affects both the demand of regulated care and the labor force participation choices of the mothers.” An article published in the Washington Examiner in 2014 noted that “excessive regulation of daycare and preschool mostly hurts the poor and working class,” and “makes daycare rarer and more expensive.” These costs are most prohibitive for low-income individuals, because they must use a greater share of their disposable income to pay for child care services.

During the 127th Legislature, a child care provider in Maine testified against a bill imposing new regulations on the industry by saying “As more and more daycare regulations are passed, more and more great home daycares are closing, because it is becoming almost impossible to comply with all the rules and regulations.”

There are three bills — LDs 765, 1423 and 1474 — that would help reverse trends of overregulation within the child care industry, and would ultimately make childcare services more affordable and accessible for Maine parents without jeopardizing the health and safety of our children. Enacting these bills would loosen restrictions on child care providers by allowing them to watch more children without certification, reducing the fees associated with attaining licensure and extending the term of the license, and by limiting rules to those which are carefully tailored to mitigate legitimate health and safety risks.

The average unlicensed provider in the US can watch four children, but in Maine, an unlicensed provider may watch only two. Further, our strict ratios are out of step with practices in other states. For example, the staff-to-child ratio in Maine for children four years of age and older is 1:8 for a group of 24 children or 1:10 for group of 20. In Florida and North Carolina, a single provider may watch up to 20 children of the same age in a similar care environment.

These children are not prone to death or serious injury because of loose staffing ratios. Interest groups in Maine continue to assert that relaxing regulations will put our children in danger. I say: Show me the data! If these groups could have their way, the only people who could afford child care in Maine would be $100,000/year+ earners; and every family child care would be regulated out of the market until the only option left for Maine parents is expensive, heavily-regulated center-based care.

LDs 765, 1423, and 1474 would legitimately make child care services more accessible and affordable without jeopardizing the health and safety of Maine children. These measures would also create new entrepreneurial opportunities in the child care industry for Maine citizens, which would be particularly helpful for low-income families and stay-at-home parents.

You cannot regulate your way to accessibility and affordability. Maine has tried, and failed. It’s time we charter a new course on child care.