Childcare Landscape Study - Flipbook - Page 90
Davidson County Child Care Landscape Study Results
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providers can sustain financially viable programs with a stable, well-supported, and
adequately compensated workforce. Reaching this balance requires a clear understanding of
what providing high-quality child care actually costs programs.
The Market Price of Child Care Depends on Underpaying Educators
Understanding the cost of child care begins with the state’s market rate survey, conducted
annually in Tennessee, which measures the amount (price) child care programs charge
families across the state.5 However, market rates reflect the prices that families are willing or
able to pay, not what it actually costs programs to sustainably deliver high-quality child care.
Therefore, market rates provide an incomplete picture of the actual cost of services.
A key component of high-quality child care is a stable, well-supported, and adequately
compensated workforce. When educators stay in their roles, children benefit from stronger
educator-child relationships, better classroom quality, and educators who can build expertise
over time.6,7 Yet current market prices leave limited room for programs to compensate
educators at a level that supports long-term workforce stability.
At an average child care center in greater Davidson County, 9 in 10 educators earn less than
the local ALICE Household Survival Budget Threshold ($22.50 per hour). More than 2 out
of 5 child care centers do not offer health insurance (42%) or retirement plans (44%).a
Further, 57 percent of child care centers experience high annual educator turnover (greater
than 20% annually).b,8
Child care programs report limited ability to address these challenges. Almost half of centerbased programs describe themselves as either breaking even or operating at a loss,
indicating that raising educator wages or improving benefits could push some programs out
of business.9 Programs also have limited ability to raise tuition to increase revenue, as many
families already struggle to afford child care.
Market rate surveys underestimate the actual cost of providing highquality child care because tuition rates in the market are anchored to a
system in which educators are often paid below a living wage.
As a result, programs cannot set tuition rates to reflect the true cost of providing highquality child care, which would include paying educators a living wage, without making
a ALICE is an acronym for Asset Limited, Income Constrained, Employed, and represents households with income above
the Federal Poverty Level (FPL), but below the basic cost of living. The Household Survival Budget reflects the minimum
cost of household necessities (housing, child care, food, transportation, health care, and technology) plus taxes, adjusted for
all US counties and various household compositions. The Davidson County ALICE Household Survival Budget income is
$22.50 per hour for a single adult living alone. See ALICE Budget and Income Status | UnitedForALICE.
b See Brief 2 for more information about the characteristics of the center-based child care workforce.
Prenatal-to-3 Policy Impact Center 2026
www.pn3policy.org
