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Born in a Pandemic, Part II: Financial Hardship Persists for Many New Parents

By Jennifer Palmer  |  June 14, 2022

On top of rising food and gas prices, parents of infants and toddlers are paying more for basics like diapers, formula (if they can find it) and child care than ever before.

Kansas Rep. Ponka-We Cozad (D) confesses she didn’t fully grasp the stress and expenses parents face until she welcomed her daughter, Walking Star, in August 2021. “From the cost of formula to the cost of child care,” she says, “I never appreciated how expensive and challenging (being a parent) was until I started living it. And I am living it now.”

Decades of research on early child development warns against the negative consequences of inadequate housing and lack of access to basic needs during a child’s first years of life, yet current data tells an alarming story.

Families with young children are at greater risk of experiencing poverty and food insecurity than the overall population. Forty percent of infants live in poor or low-income families, and families with children younger than 6 make up 30%-40% of those experiencing homelessness.

Research also shows financial and material hardship have increased disproportionately over the last two years for low-income families. Black, Hispanic, single-parent families and families with children who have special needs have experienced greater material hardship unpredictability than white families.

States Support Food and Financial Assistance

Amid lockdowns and major declines in employment, states relaxed eligibility requirements for public benefits. Most states continue to use emergency waivers to extend eligibility, flexibility and benefits for the Supplemental Nutrition Assistance Program, known as SNAP or food stamps, and the Special Supplemental Nutrition Program for Women, Infants and Children. Such waivers will stop one month after the federally declared pandemic emergency ends, expected by the end of this year.

Last year, seven states—Arizona, California, Hawaii, Maine, Maryland, New York and Nebraska—expanded access to SNAP or made more food choices eligible for purchase through the program. New Jersey and Texas streamlined the SNAP enrollment process. Missouri lawmakers expanded food voucher eligibility to low-income pregnant and postpartum women and children under age 5. Legislation in Illinois, Maine, Massachusetts, Mississippi, Nebraska, Nevada, Virginia and Washington expanded eligibility for the Temporary Assistance for Needy Families program. West Virginia examined the state’s eligibility criteria and reestablished a drug-screening program for TANF applicants.

From July to December 2021, qualifying parents received a new type of financial support when the federal government replaced the annual child tax credit with monthly installments to more than 36 million families. In surveys, parents reported using the funds to buy food and clothing and to pay rent, utilities and other bills. In 2021, lawmakers in 12 states, the District of Columbia and Puerto Rico passed legislation to reduce the tax burden for low- and middle-income families by establishing or expanding an earned income tax credit. Additionally, seven states passed bills to create, expand or study the potential of state child tax credits.

Parents Face Limited Options for Infant and Toddler Care

Most U.S. parents do not have access to paid leave following the birth or adoption of a child, and those with infants and toddlers face particularly challenges finding qualified, affordable child care providers.

The average cost of child care rose 5% from $9,687 in 2019 to $10,174 in 2020, outpacing inflation and further stretching parents’ budgets. On top of that, pandemic-related closures shrank the already insufficient supply of child care nationwide by an additional 9%-10%, depending on type of care. Sustaining low adult-child ratios—a requisite of high-quality care for children under age 2—became even harder in a field facing enormous hiring challenges.

In response, legislatures in 30 states passed over 90 bills to support child care access for more families, provide relief to providers and encourage the growth of new child care businesses. In addition, the federal government invested a historic $39 billion to support recruitment and retention of child care professionals through the American Rescue Plan Act of 2021.

States were encouraged to use a portion of their ARPA funds to expand infant and toddler care. At least nine states—Alaska, Arizona, Colorado, Kentucky, Michigan, Minnesota, Missouri, Nevada and New Hampshire—are using the funds to increase payment rates or offer other financial incentives to providers of infant care. Ten states—California, Colorado, Kentucky, Louisiana, Maine, Minnesota, Montana, Nebraska, New Hampshire and Rhode Island—are investing in family or home-based child care providers, who care for nearly 30% of all infants and toddlers.

In addition, at least five states have expanded paid family leave in some form since 2020. Colorado, Delaware and Maryland approved statewide parental leave programs. Georgia lawmakers enacted paid leave for state employees, and Rhode Island lengthened its existing paid parental leave from four to six weeks. And lawmakers in Hawaii and Maine passed legislation to identify next steps toward creating parental leave programs.

What’s Next for Policies That Support Parents of Infants and Toddlers?

It is often said the COVID-19 pandemic laid bare many of the challenges that families, particularly those of lower economic status, have long endured. While it seems increased attention on food and housing insecurity and lack of child care spurred many policymakers into action over the last two years, these issues persist for many families and disproportionately so for parents of children with disabilities, single parents and families of color.

With continued inflation, an infant formula shortage and the looming end of emergency federal funding, policymakers will have to decide what pandemic-related actions to make permanent and what else should be done to help families with young children thrive.

This article is part two of a two-part series. Part one covered declining maternal well-being in the United States.

Jennifer Palmer is a senior policy specialist in NCSL’s Children and Families Program.

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