A Broken Business Model

Summary:

Wisconsin’s child care system is built on a broken business model where parent fees are too high for families to bear, yet too low to adequately support child care programs and staff. A typical regulated center serving 52 children may collect around $520,000 annually in tuition, averaging $10,000 per child. However, once expenses such as rent, utilities, materials, and administration are covered, staff compensation is drastically limited. On average, educators earn only $23,600 per year—or $11.34 an hour—without access to standard benefits like health insurance or retirement. This imbalance leaves families struggling to pay and educators unable to make a living wage, perpetuating financial strain across the system.

To resolve this crisis, significant state and federal investments are needed to strengthen the early care and education workforce while reducing costs for families. Parent fees alone cannot fund high-quality child care, and without intervention, providers will continue to face staffing shortages, high turnover, and closures. By raising wages, offering benefits, and ensuring sustainable funding, Wisconsin can better support early childhood educators, reduce the financial burden on parents, and stabilize a system that is essential to children, families, and the state’s economy.

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