Keep pulling the thread on Lauren Shores-Pelican.
Nine of the ten largest for-profit child care chains in the U.S. are backed by private equity investors.
Private equity-backed child care chains are achieving annual profit margins of 15% to 20% of revenue.
Lauren Shores-Pelican proposes a "child care service provider exclusion" that would allow individual child care workers to exclude their wages from both federal income and payroll taxes.
The U.S. government provided $52.5 billion in temporary support for the child care sector during the COVID-19 pandemic, and these funds have now been depleted.
Professor Lauren Shores-Pelican proposes that federal tax incentives for child care should be directed to sector workers rather than to parents.
Private equity firms are earning significant returns from investments in the child care sector, while the rest of the market operates with minimal profitability.
According to Lauren Shores-Pelican, private equity profits in the child care sector are derived from financial engineering and market consolidation, not from expanding access or creating new child care spots.
Two private equity-owned childcare chains have previously gone bankrupt and collapsed.
Independent child care centers and family child care homes in the U.S. typically operate with profit margins of less than 1% of revenue.
Labor costs account for 70% to 80% of the total budget for a typical small child care center.
On average, preschool teachers in the U.S. earn approximately half the salary of kindergarten teachers.
The national average cost of child care in the U.S. was approximately $13,000 in 2024.