Despite “fragile progress,” the Commonwealth’s early child care system continues to suffer from a workforce problem, according to a new analysis published by the Massachusetts Taxpayers Foundation (MTF). 

The report makes several policy recommendations and highlights that the state is losing out on billions in tax revenue due to low earnings and lost wages, a lack of employee benefits, and subsequently high turnover. 

“Massachusetts loses close to $3 billion each year due to inadequate child care, a loss that ripples across families, employers, and the economy,” MTF policy researcher and report author Victoria Bergeron said. “But it isn’t just about dollars; it’s about supporting educators who nurture our kids while sustaining thousands of small businesses through targeted investments and thoughtful policymaking.” 

The Commonwealth Cares for Children (C3) grant program has allowed child care providers across the state to raise wages since the pandemic. The average center-based teacher salary increased from about $39,000 in 2021 to over $47,000 in 2024. However, the report shows that there is still a significant salary gap between the early education and K-12 sectors. The average salary for a K-12 teacher in 2024 was just over $92,000, and center-based educators earn nearly $5,000 less than starting K–12 teachers annually. 

Among family child care program owners and assistants, just over 40 percent receive paid time off, around 25 percent receive paid sick leave, around five percent receive discounted child care, and less than 8 percent receive dental insurance and retirements benefits. Just 4 percent of assistants receive health insurance compared to 15 percent of owners.  

A much higher share of center-based directors and teachers receive these employer-sponsored benefits, but the report shows that only around 40 percent receive dental insurance, retirement benefits, and discounted child care. 

With a lack of paid leave and access to discounted child care, the report notes that many employees are suffering lost earnings due to missing work or reducing their hours to make up for child care gaps.  

Turnover rates are high, with nearly 40 percent of assistant educators exiting their roles each year, straining program capacity and limiting access to child care statewide. Although the overall early childhood educator turnover rate has decreased since 2022 from 32 percent to 26 percent, it still meets the US Health and Human Services’ definition of “high turnover” set at 20 percent or above.