The mounting child care crisis has received growing attention in recent weeks and months. But less talked about are the challenges surrounding nontraditional-hour (NTH) child care needs and options. About one-third of all children younger than 6 have parents who work NTH schedules.

Home-based providers are a cornerstone of the NTH workforce. And women of color—particularly Black and Latina women—disproportionally provide this care. Despite their importance, our new report shows that home-based providers face systemic disadvantages, highlighting their experiences in Austin/Travis County, Texas. Research points to a range of policy solutions that can help root out structural racism in early childhood systems and better support the women providing this critical care.

Black and Latina women are overrepresented in home-based child care

As opportunities for white women have grown, women of color have subsidized white women’s career growth through undercompensated domestic and caregiving labor. Women of color, particularly Black women, have been historically and systematically diverted into caregiving, especially within homes, through concerted processes of exclusion, violence, and discrimination entrenched in the American labor market.

Today, Black and Latina women disproportionately provide child care and are particularly likely to be home-based providers—which are among the lowest-paid jobs, both within the child care sector and across sectors overall. In listed child care homes nationally, 16 percent of providers are Black and 16 percent are Hispanic/Latinx, most of them women. In unlisted homes, those numbers are even higher. Compared with their proportion of the total population, Black providers are overrepresented in all home-based child care, and Hispanic/Latinx providers are overrepresented in unlisted child care homes.

Black and Latina home-based providers face unique barriers to business opportunities

Black and Latina home-based providers experience systemic disadvantages that can limit pay, prohibit growth, and lead to disproportionate financial hardship.

1. Subsidy rates don’t meet the cost of providing care

As of October 2022 in Texas, participation in Texas Rising Star—the state’s quality rating and improvement system (QRIS)—is mandatory for facilities that accept subsidies. Providers with higher ratings receive higher subsidy reimbursement rates, but current minimum rates don’t cover the cost of care. For example, registered home-based providers at the base QRIS level make as little as $35.40 per day per child (PDF) for a full-time preschooler.

Our interviews with child care providers revealed that some small home-based providers faced serious barriers to participation and advancement in QRIS—and were in turn unable to access the full amount of subsidy funds they would otherwise be entitled to. Several Black women home-based providers in Austin told us they face serious financial hardship to serving majority subsidy-eligible families at the low reimbursement rates set by the state and don’t pay themselves a salary, instead using revenue they earn to keep the facility afloat. This means they’re not only less able to build wealth but also less able to pass wealth on to future generations.

2. Barriers to quality rating mean barriers to pay

In addition to challenges meeting their basic needs, we heard the QRIS criteria (PDF) (e.g., equipment and facilities, degrees and credentials, paperwork and assessments, and annual training hours) are difficult to achieve at the current subsidy reimbursement rates. This, in turn, prevents providers from accessing the enhanced subsidy rates associated with higher QRIS scores.

Despite the importance of these quality factors, some providers reported they couldn’t afford to meet the expectations while maintaining round-the-clock schedules and razor-thin margins. Although some spoke highly of the workforce board mentorship program, others expressed a need for more resources, support, and outreach.

These financial and business challenges may be particularly acute for Black and Latinx providers. For example, consider the facility improvements or expansion that would enable home-based providers to get a higher QRIS score to increase their subsidy payments, increase the number of children they can support, or serve more children of a different age group. Because of structural racism baked into the employment system, lending system (including mortgage lending), and barriers to housing and homeownership, Black and Latinx providers are on average less able than white providers to build up their savings, purchase property, or use loans or credit to invest in their homes and businesses to further build wealth (PDF), property values, or home equity. These intersecting oppressions are particularly stark for home-based child care providers because their homes are their places of work—there’s no separation between the housing discrimination they may face and the direct implications of that discrimination for their businesses.

Moreover, Black and Latinx homeownership rates are far below the rates for white people. This means Black and Latina women who operate child care facilities out of a rented home have even less freedom and ability to upgrade the built environment, ensure maintenance needs are met, or benefit from expansion grants.

3. Barriers to other funding opportunities

Interviewees were further disadvantaged when it came to accessing expansion grant funding. Application processes for expansion grants and other (PDF) funding sources can be prohibitive. Several providers described needing a mentor or coach to assist them through the process. If programs like the expansion grants inadvertently favor larger centers with more resources that are more likely to be owned by white people, or if they fail to correct for structural racism in application processes, assessment criteria, and awards, they perpetuate inequality.

Policy solutions can help

These stories show how current systems are inadequately supporting the Black and Latina women who carry out so much critical care work. Research suggests several policy strategies can help address this inequality:

• Explicitly assess the equity of early childhood systems—including QRIS programs—to identify and remedy cases where policies disproportionately hurt particular groups because of the effects of structural racism.
• Increase public and private investments in child care to ensure that funds to providers (including subsidy payments) match the cost of providing quality care and are distributed equitably.
• Investigate alternative methods of subsidizing child care providers’ income, such as DC’s Early Childhood Educator Pay Equity Fund.
• Support wealth-building opportunities (PDF) for women of color.
• Consider providing financial assistance, administrative support—like shared services (PDF) agreements and technical assistance)—enhanced outreach (PDF), and other initiatives that support child care providers who are Black and Latinx, as well as small providers with limited resources.
• Ensure providers and families of color are represented in decisionmaking and enact policies that reflect their needs.