Blog | January 20, 2022

Investing in Texas Child Care

Dallas-based business leader explains the value of child care to the Texan workforce

Tom Hedrick

As this new year begins, I’m grateful for signs our Texas state government is headed towards more opportunity for children. In the Texas Legislature’s sessions last year, early childhood education and child care got some much-overdue, critically-needed attention and passed measures that will be implemented this year. But much more needs to get done.

I’ve worked for the past 20 years investing in venture capital and private equity. As an investor, I know focusing on upstream processes and capabilities (that is better preparation in the early stages of a company’s life) can have tremendous payoffs. There’s a natural linkage between that work and my personal interest in the development of infants and toddlers.

I’m a member of ReadyNation, a nonprofit that leverages the expertise of approximately 3,000 business executives to make an evidence-based case for effective, bipartisan investments in children as the future workforce. As an investor in companies, I know the shortage in quality, affordable child care and lack of access to early childhood education are damaging our state’s ability to compete.

A 2019 ReadyNation report examining the nation’s infant-toddler child care crisis noted that the crisis costs our economy a staggering $57 billion per year in lost earnings, productivity, and revenue. Texas’ share of GDP suggests the economic cost for the lack of reliable infant-and-toddler child care in our state could come to $4.9 billion annually.

Shortly after the release of that report, the situation got worse. The world plunged into a pandemic. Nationwide, six of 10 child care providers shut down. Millions lost their jobs or had to quit to care for young children. We’re rebuilding now, but companies are having trouble hiring the employees they need.

The Texas Legislature took some good steps last year to address some of the underlying causes that make these problems more challenging. Moms of infants and toddlers can now keep Medicaid health benefits for six months after the birth of a child, and a long-fought-for bill passed that will prevent Medicaid-eligible children from mistakenly getting kicked off their coverage. And Texas passed bills better aligning child care subsidy support with provider quality ratings, and reducing red tape. A long-sought new law will create a state strategic plan for the child care workforce, exploring strategies to raise child care worker pay.

Last September, ReadyNation issued a report, Want to Strengthen Texas’ Economy? Fix the Child Care Crisis. The challenges it lays out are stark: Nearly half (48 percent) of Texans live in child care “deserts” where more than three children under age 5 compete for each licensed child care slot. The lack of subsidized child care is even more acute: 68 percent of Texas children in families with low incomes live in areas without sufficient supply of subsidized care. The cost of center-based infant care in Texas averages $10,300 per year, about the same price as public college tuition. This high cost makes child care unaffordable for many families.

My fellow business leader members of ReadyNation in Texas are urging lawmakers to continue to invest in child care with a focus on quality, accountability, and defined outcomes. In particular, we must increase the quality of early education by ensuring that all providers are in the state’s Texas Rising Star quality system, ensure accountability for how state dollars are spent on child care, and provide support to enhance our child care workforce.

I salute last year’s bipartisan efforts, and hope the progress is implemented swiftly this year.


Tom Hedrick

Managing Director, Dillon Joyce Ltd

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