Employers Are Filling the Child Care Void, But Is That the Right Solution?

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Last month, the female-owned company CAKES Body announced a benefit that went viral: a child care allowance, up to $36,000, for every employee. The nipple cover company was lauded by nonprofits, business leaders and parents alike. As a pediatrician and early childhood advocate, I commend CAKES’ initiative. But we should see this offering for what it is: the result of massive underinvestment in children and families in the United States that sets a risky precedent.

Our country invests less in child care and enrolls fewer children in preschool than nearly every other developed nation. And the current administration has threatened to make this disparity worse. A leaked presidential budget document proposed eliminating Head Start, the nation’s largest early care and education program.

In the absence of significant public investment, the United States continues to experience a child care crisis.

The average cost of center-based child care for a family with two children exceeds the cost of rent in all 50 states, according to a recent report from Child Care Aware,, with too few programs to meet the current demand. Federal child-care subsidies are available to lower-income families, but they reach only 14% of children who qualify, according to pre-COVID data. That’s a reflection of state restrictions on eligibility, a limited supply of child care slots and insufficient federal funding. My state of Virginia has nearly 10,000 children on our current child care subsidy waitlist. And federal funding for these subsidies has seen recent delays.

This means that the majority of families are left to foot the bill with no government assistance. With a national average price of child care at $11,582 annually, that’s 

problematic for many families. Because employers want to keep parents in the workforce, some have stepped into the void. An estimated 11% of families have access to employer-sponsored child care, where companies offer subsidized care on-site or contract it out to a local provider, according to the Bureau of Labor Statistics.

Legislators from both sides of the aisle are pushing to expand the reach of employers into child care. In 2021, Michigan’s Democratic Gov. Gretchen Whitmer helped introduce the Tri-Share model in Michigan where businesses pay one third of their employees’ child care costs, shared evenly with the state and the parents. The CHIPS Act of 2022 required government contractors manufacturing microchips to offer child care as a condition of receiving grants. The 45F tax credit allows businesses to receive a credit of up to $150,000 per year for money spent on child care, and multiple recent bipartisan bills have proposed increasing this amount. House Republicans recently voted to raise this credit to $600,000 in their “One Big Beautiful Bill Act.” 

I am nonetheless wary of relying on employers as the best solution for children and families. Just like our employer-sponsored health insurance system, employer-sponsored child care can be expensive and of variable quality. It also ties an infant or toddler’s well-being to a parent’s job. If a parent needs to change work, the child could have her teachers, friends and routine ripped away.

When we segregate responsibility for health insurance and child care between the public and private sectors, we also segregate children by socioeconomic status. In my community, a baby covered through Medicaid will go to a different clinic than his privately insured counterpart. The list of providers and services the children will have access to can be considerably different. The food and field trips offered in a Head Start program might not match those offered at the employer-sponsored facility down the road. 

Another concerning parallel between employer-sponsored health insurance and child care is the growing dominance of for-profit companies overseeing systems purportedly designed for the public good. Just as an employer might turn to UnitedHealthcare for health insurance, employers often turn to investor-backed chains to contract child care services. Profiting from the care of young children is ethically suspect. Staff at for-profit centers report being asked to limit meal portions and sheets of paper to pinch every penny for their investors. 

As one of the wealthiest nations in the world, we should offer every young child the best start imaginable. This begins with a federal paid-leave policy that allows parents to be a child’s first caregiver. It then involves supporting children in a variety of settings — at a child care center, preschool or at home. We should think about child care as the means to help children flourish and set them on a path toward a healthier and more prosperous future, not as a warehouse for kids so that their parents can get to work. 

Until our government decides that children and families matter, CAKES Body is doing the right thing. But if current trends continue, it seems that we’ll instead end up with a child care system that mirrors our current health insurance system: segregated, difficult to access, expensive and inefficient. There is another way. Rather than expecting businesses and corporations to pay for child care, we could expect them to pay taxes to support equitable access to high-quality early childhood education for everyone.

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