Toddlers and Investors Aren’t Playmates: The Threat of Private Equity in Child Care
By Elliot Haspel
When a child care owner is making decisions, should they be thinking about what’s best for young children and families, or about what’s going to make the most profit for their investors?
Private equity-backed for-profit child care chains are growing in size and power in the United States. As most child care programs scrape to survive while raising parent fees only as a last resort, investor-backed chains make between a 15 and 20% profit while regularly hiking fees for parents.
These chains have increasing political clout. And they have proven themselves unwilling to support a child care system that would work for everyone: one that lowers parent fees, increases child care educator wages, and puts people over undue profits.
To date, the U.S. has not had a serious conversation about the threats posed by this profit-seeking subsector or potential policy actions to put guardrails around this model’s expansion.
It is time for that to change.