Report | Wages, Incomes, and Wealth

More than half a million child care workers would benefit from a $15 minimum wage in 2025

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Summary

More than two in five child care workers would have higher pay if there were a $15 national minimum wage in 2025, as called for by the 2021 Raise the Wage Act. Of the child care workers who would get a raise, more than nine in 10 are women.

This report finds that after a $15 minimum wage in 2025:

  • As many as 560,000 child care workers would have higher take-home pay.
  • The vast majority (95.4%) of child care workers who would get a raise are women, and 36.2% are Black or Hispanic.
  • Among those child care workers who get a raise, average annual pay for year-round workers would rise by $2,900 (in 2021 dollars). The year-round earnings of Black or Hispanic child care workers would increase by $3,200 and $3,100, respectively.
  • Child care worker pay increases would be concentrated at the bottom of the wage distribution and would significantly reduce inequality in this profession. If the Raise the Wage Act passed, the 10th-percentile child care worker hourly wage in 2025 would be 41.8% higher than it would be without the act.
  • Wages would rise for 43.5% of child care workers nationally. In the following states, more than two out of every three child care workers would have higher take-home pay: Alabama (72.3%), Arkansas (69.1%), Iowa (72.8%), Kansas (76.3%), Kentucky (78.8%), Louisiana (72.0%), Mississippi (69.0%), Nebraska (68.9%), New Mexico (69.1%), Oklahoma (73.0%), Texas (70.0%), Utah (75.2%), and Wisconsin (67.1%).

Quality child care is essential to our economy

During the COVID-19 pandemic, working parents struggled to navigate day care and school closures; essential child care workers faced risks on the job and lost income; and child care centers faced increasing costs to meet additional safety standards (Workman and Jessen-Howard 2020). These difficulties highlight the vast social benefits that quality child care provides to both children and their families.

And yet child care work is—and has been—deeply undervalued. Domestic workers (many of whom provide child care) were originally excluded from the federal minimum wage when it was first established in the 1930s, as a direct result of racism against the Black women who made up most of that workforce (Wolfe et al. 2020; ILO 2021).

In this report, we show how raising the minimum wage would benefit these essential workers.

The Raise the Wage Act would make a big difference for child care workers

The 2021 Raise the Wage Act would increase the federal minimum wage to $15 in 2025 and disproportionately benefit workers in child care. Table 1 shows the projected effects of the policy in 2025 relative to “business as usual” wherein the federal minimum wage remains at its current level of $7.25 per hour. The Raise the Wage Act would increase the pay of 32 million workers; these “affected” workers make up 21.2% of the overall wage and salary workforce. Because they are paid particularly low wages, child care workers are much more likely to be affected by the policy. Wages would rise for more than 560,000, or 43.5% of, child care workers.

Table 1

Child care workers are more likely to be impacted by the Raise the Wage Act of 2021 (RTWA): Numbers and shares of workers affected by the RTWA, projected for 2025

Group Total workforce (thousands) Total affected (thousands) Share of group affected
All occupations 151,743 32,204 21.2%
Child care occupations only 967 486 50.2%
Child care occupations + Pre-K and kindergarten teacher occupations 1,586 654 41.2%
…excluding those who work in elementary and secondary schools 1,288 561 43.5%

Notes: The final row in this table represents the group we refer to as “child care workers”—i.e., workers in the “Child care” or “Pre-K and kindergarten teachers” occupation classifications, excluding those who work in the “elementary and secondary schools” industry. The table also shows results for two other definitions of child care workers: (1) only those workers in the “Child care” occupation category (not including the “Pre-K and kindergarten teachers” category), and (2) all workers that appear in either the “Child care” or the “Pre-K and kindergarten teachers” occupation category.

Source: Economic Policy Institute Minimum Wage Simulation Model; see Technical Methodology by Cooper, Mokhiber, and Zipperer (2019).

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Throughout this report, “child care workers” refers to workers in the “Child care” or “Pre-K and kindergarten teachers” occupation classifications (from the Bureau of Labor Statistics’ American Community Survey), excluding those who work in the “Elementary and secondary schools” industry. Since pre-K and kindergarten teachers are in a combined occupation category, the industry restriction is needed to exclude kindergarten teachers. While this also excludes pre-K teachers who work in elementary schools, it still provides a more comprehensive look at the universe of child care workers and pre-K teachers than if we just looked at workers in “Child care” occupations.

Table 1 also displays the effects of the Raise the Wage Act of 2021 on two alternative definitions of child care workers that do not include the industry restriction: (1) only those workers in the “Child care” category (that is, not including pre-K workers from the “Pre-K and kindergarten” category), and (2) all workers that appear in either the “Child care” or the “Pre-K and kindergarten teacher” occupation category (i.e., not excluding kindergarten teachers).

Women and Black workers are more likely to benefit

Many of the child care workers who would benefit from the Raise the Wage Act are women and people of color. Table 2 and Figure A show that, among child care workers, women and Black workers are particularly likely to see their pay rise. Nearly half (48.5%) of Black child care workers would benefit from the Raise the Wage Act—a higher share than other race/ethnicity groups. Women child care workers are also more likely to benefit than their peers who are men (43.8% would see a raise compared with 38.3%). Coupled with the fact that women make up the vast majority of child care workers, this means 95.4% of affected child care workers are women.

Table 2

Women and Black child care workers would be particularly likely to see a raise under the Raise the Wage Act of 2021 (RTWA): Numbers and shares of child care workers affected by the RTWA, by gender and race/ethnicity, projected for 2025

Group Total child care workers (thousands) Number affected (thousands) Share affected
Overall 1,288 561 43.5%
Gender
Female 1,221 535 43.8%
Male 67 26 38.3%
Race
White 707 327 46.2%
Black 217 106 48.5%
Hispanic 265 97 36.4%
AAPI 55 13 24.0%

Notes: AAPI stands for Asian American/Pacific Islander. “Child care workers” refers to workers in the “Child care” or “Pre-K and kindergarten teachers” occupation classifications (from the Bureau of Labor Statistics’ American Community Survey), excluding those who work in the “Elementary and secondary schools” industry.

Source: Economic Policy Institute Minimum Wage Simulation Model; see Technical Methodology by Cooper, Mokhiber, and Zipperer (2019).

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Figure A

Nearly half of Black child care workers would see their wages increased by the Raise the Wage Act of 2021 (RTWA): Shares of child care workers affected by the RTWA, by gender and race/ethnicity, projected for 2025

Group Share affected
Overall 43.5%
Female 43.8%
Male 38.3%
White 46.2%
Black 48.5%
Hispanic 36.4%
AAPI 24.0%
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Notes: AAPI stands for Asian American/Pacific Islander. “Child care workers” refers to workers in the “Child care” or “Pre-K and kindergarten teachers” occupation classifications (from the Bureau of Labor Statistics’ American Community Survey), excluding those who work in the “Elementary and secondary schools” industry.

Source: Economic Policy Institute Minimum Wage Simulation Model; see Technical Methodology by Cooper, Mokhiber, and Zipperer (2019).

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Table 3 shows that child care workers affected by the Raise the Wage Act would receive, on average, an annual pay increase of $2,900 (in 2021 dollars) if they worked year-round (52 weeks per year). Black or Hispanic child care workers would see slightly larger pay increases: The average annual earnings for these workers would rise by $3,200 and $3,100, respectively, if they worked year-round. These higher increases reflect the degree to which these workers were underpaid even relative to other child care workers.

Table 3

Black and Hispanic child care workers would see larger pay increases than white workers from the Raise the Wage Act of 2021 (RTWA): Pay increases for child care workers affected by the RTWA, by gender and race/ethnicity, projected for 2025

Group Average hourly increase in real earnings (2021$) Change in average real annual earnings (year-round workers) (2021$)
Overall $1.94 $2,900
Gender
Female $1.93 $2,900
Male $2.14 $2,900
Race
White $1.97 $2,800
Black $1.91 $3,200
Hispanic $1.89 $3,100
AAPI $1.72 $2,300

Notes: AAPI stands for Asian American/Pacific Islander. “Child care workers” refers to workers in the “Child care” or “Pre-K and kindergarten teachers” occupation classifications (from the Bureau of Labor Statistics’ American Community Survey), excluding those who work in the “Elementary and secondary schools” industry.

Source: Economic Policy Institute Minimum Wage Simulation Model; see Technical Methodology by Cooper, Mokhiber, and Zipperer (2019).

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Figure B shows that pay increases for child care workers are concentrated in the bottom half of their occupations’ hourly wage distributions. For instance, without the Raise the Wage Act, the 10th percentile of the child care worker wage distribution would be just $10.58 in 2025. However, with the act, it would be 41.8% higher at $15. The 20th-percentile wage would be 19.8% higher in 2025 under the Raise the Wage Act.

Figure B

Wage gains under the Raise the Wage Act of 2021 (RTWA) would be concentrated among lower-paid workers: Hourly wage distribution of child care workers, by percentile, projected for 2025 (2021$)

Percentile Wage in 2025 without RTWA Wage in 2025 with RTWA
10th $10.58 $15.00
20th $12.52 $15.00
30th $14.04 $15.00
40th $15.22 $15.55
50th $16.35 $16.35
60th $16.99 $17.04
70th $18.73 $18.73
80th $21.30 $21.30
90th $25.59 $25.59
ChartData Download data

The data below can be saved or copied directly into Excel.

Notes: “Child care workers” refers to workers in the “Child care” or “Pre-K and kindergarten teachers” occupation classifications (from the Bureau of Labor Statistics’ American Community Survey), excluding those who work in the “Elementary and secondary schools” industry.

Source: Economic Policy Institute Minimum Wage Simulation Model; see Technical Methodology by Cooper, Mokhiber, and Zipperer (2019).

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Child care workers in some states would benefit disproportionately

While nationally, on average, 43.5% of child care workers would benefit from the Raise the Wage Act, the benefits vary widely by state. Some states already have higher minimum wage standards; therefore, the national average understates the benefits of the Raise the Wage Act in low-minimum-wage states.

Figure C shows state-specific totals and shares of child care workers who would have higher pay as a result of the policy. More than two out of every three child care workers would have higher take-home pay in Alabama (72.3%), Arkansas (69.1%), Iowa (72.8%), Kansas (76.3%), Kentucky (78.8%), Louisiana (72.0%), Mississippi (69.0%), Nebraska (68.9%), New Mexico (69.1%), Oklahoma (73.0%), Texas (70.0%), Utah (75.2%), and Wisconsin (67.1%).

Southern states tend to have particularly high shares of child care workers who would benefit from the RTWA, since only three Southern states have a minimum wage higher than $7.25 (Arkansas, Florida, and West Virginia). In fact, the five states that would not have a minimum wage at all if it were not for the federal minimum wage are all in the South (EPI 2021).

Figure C

Number and share of child care workers who would benefit from the Raise the Wage Act of 2021, by state

State Share of child care workers affected Total child care workforce Total number of affected child care workers
Alabama 72.3% 21,000 15,000
Alaska NA NA NA
Arizona 59.6% 23,000 13,000
Arkansas 69.1% 14,000 10,000
California NA 142,000 NA
Colorado 38.7% 21,000 8,000
Connecticut NA 18,000 NA
Delaware NA NA NA
Washington D.C. NA NA NA
Florida 61.4% 70,000 43,000
Georgia 66.3% 43,000 29,000
Hawaii NA NA NA
Idaho NA NA NA
Illinois NA 48,000 NA
Indiana 66.4% 22,000 15,000
Iowa 72.8% 14,000 10,000
Kansas 76.3% 11,000 9,000
Kentucky 78.8% 18,000 14,000
Louisiana 72.0% 14,000 10,000
Maine NA NA NA
Maryland NA 28,000 NA
Massachusetts NA 35,000 NA
Michigan 58.6% 31,000 18,000
Minnesota 31.5% 25,000 8,000
Mississippi 69.0% 13,000 9,000
Missouri 62.8% 25,000 16,000
Montana NA NA NA
Nebraska 68.9% 12,000 8,000
Nevada 64.4% 7,000 4,000
New Hampshire NA NA NA
New Jersey NA 37,000 NA
New Mexico 69.1% 7,000 5,000
New York 15.7% 93,000 15,000
North Carolina 61.1% 45,000 27,000
North Dakota NA NA NA
Ohio 63.8% 41,000 26,000
Oklahoma 73.0% 15,000 11,000
Oregon 22.7% 15,000 3,000
Pennsylvania 64.2% 52,000 33,000
Rhode Island NA NA NA
South Carolina 65.1% 19,000 12,000
South Dakota NA NA NA
Tennessee 64.6% 26,000 17,000
Texas 70.0% 118,000 83,000
Utah 75.2% 8,000 6,000
Vermont NA NA NA
Virginia 52.1% 43,000 22,000
Washington 27.1% 31,000 9,000
West Virginia NA NA NA
Wisconsin 67.1% 24,000 16,000
Wyoming NA NA NA

Notes: “Child care workers” refers to workers in the “Child care” or “Pre-K and kindergarten teachers” occupation classifications (from the Bureau of Labor Statistics’ American Community Survey), excluding those who work in the “Elementary and secondary schools” industry. We do not report data for states where the total child care workforce sample size is less than 250. We also do not report counts and shares of affected workers for states where less than 1,000 workers are affected; this is the case for states where the state minimum wage is already scheduled to reach $15 by 2025.

Source: Economic Policy Institute Minimum Wage Simulation Model; see Technical Methodology by Cooper, Mokhiber, and Zipperer (2019).

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Low wages are not a ‘solution’ to the affordability problem

Low wages for child care workers have for too long been treated as a “solution” to help make child care affordable. This has failed on every count. Despite the low wages of child care workers, these services remain unaffordable for many low- and middle-income families. Meanwhile, low wages leave child care workers economically vulnerable and compromise the quality of care children receive.

These low wages also reinforce existing racial and gender inequality, since both Black child care workers and women are particularly likely to see their wages increase under the RTWA. Child care workers deserve to be paid a wage that better reflects the value of their work and allows them to care for their own families.

Raising the federal minimum wage to $15 by 2025 is an important first step, and policymakers must also address the affordability issue in tandem with raising the minimum wage, investing in this critical infrastructure to lower the costs for families (Mitchell, Narefsky, and Dade 2020; Gould et al. 2020).

Methodology

The estimates come from our analysis of the Raise the Wage Act of 2021 using the Economic Policy Institute Minimum Wage Simulation Model. The results in this memorandum are the projected effects of the policy in 2025. The model incorporates all already-scheduled state and local minimum wage increases through 2025. A description of the detailed methodology is available in Cooper, Mokhiber, and Zipperer 2019.

The total workforce used in these estimates includes all wage and salary workers with valid wage values, excluding the self-employed and those working abroad. “Child care workers” and “Pre-K and kindergarten teachers” are defined by the 2018 ACS occupation codes 4600 and 2300, respectively. “Elementary and secondary schools” is defined by the 2017 ACS industry code 7860.

References

Cooper, David, Zane Mokhiber, and Ben Zipperer. 2019. Minimum Wage Simulation Model Technical Methodology. Economic Policy Institute, February 2019.

Economic Policy Institute (EPI). 2021. Minimum Wage Tracker. Accessed May 17, 2021.

Gould, Elise, Marcy Whitebook, Zane Mokhiber, and Lea J.E. Austin. 2020. A Values-Based Early Care and Education System Would Benefit Children, Parents, and Teachers. Economic Policy Institute, January 2020.

International Labour Organization (ILO). 2021. ILO Minimum Wage Policy Guide. Accessed May 17, 2020.

Mitchell, Estelle, Laura Narefsky, and Annie Dade. 2020. The Care Minimum: The Case for Raising the Minimum Wage and Investing in Child Care Together. National Women’s Law Center, October 2020.

Wolfe, Julia, Jori Kandra, Lora Engdahl, and Heidi Shierholz. 2020. Domestic Workers Chartbook: A Comprehensive Look at the Demographics, Wages, Benefits, and Poverty Rates of the Professionals Who Care for Our Family Members and Clean Our Homes. Economic Policy Institute, 2020.

Workman, Simon, and Steven Jessen-Howard. 2020. The True Cost of Providing Safe Child Care During the Coronavirus Pandemic. Center for American Progress, September 2020.


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