Regulation reform can help ease the childcare crisis in Minnesota

Childcare is essential for the economy; the coronavirus has made that clear. Unfortunately, the childcare industry has been one of the hardest-hit industries in the state as well as the country. For Minnesota, Covid-19’s effects on childcare were already on top of the existing crisis that the state faces. Generally, parents in Minnesota struggle to find childcare, and in the event that it is available, they can rarely afford it. Minnesota not only has some of the highest costs for childcare, but it also faces a shortage of available capacity, especially in rural areas.

Coming out of the pandemic, Minnesota is going to have to grapple with a much worse problem with childcare. A lot of providers have closed down and the ones open are struggling to stay afloat. This is because, in the wake of the coronavirus, providers have seen their costs go up due to extra cleaning and staff while their revenues have gone down as more parents kept their kids at home. Even with the extra government funding, a lot of providers are in a fragile position. But for the Minnesota economy to recover, we need working parents, and parents need to access affordable childcare in order to stay in the workforce. So, it is imperative that legislators take action to help the state grow its childcare capacity.

Loosening regulations is a good place to start

Regulations are a necessary part of childcare—they ensure safety and quality. But overly burdensome regulations are harmful; they help push existing providers out of the market and discourage new entrants leading to the shortage as well as high prices. Before the coronavirus pandemic, overregulation was one of the issues causing providers to exit the market in Minnesota. Providers still face the same restrictive rules now, in addition to new social distancing and sanitizing rules. This makes it even more likely that providers will go out of business during the pandemic, which will leave Minnesota’s supply of childcare in a much more critical condition.

Therefore, to ensure that existing childcare providers stay in business and that new providers come to the market, the Minnesota legislature should look into loosening some of its stringent laws. Minnesota’s low student-to-teacher ratios as well as rigorous training standards, for instance, have been cited as contributing factors of high tuition. And Minnesota’s stringent staffing requirements make it hard for providers to find qualified teachers, which potentially leads to a shortage of available capacity.

To ensure access to childcare in greater Minnesota, the state needs to input policies that will enable existing Family childcare Centers (FCCs) to stay in business and also encourage new ones to entire. FCCs are the lifeline of greater Minnesota since they are more affordable. Licensed Centers cost a lot of money to run and they, therefore, charge higher tuition compared to FCCs. But parents in rural areas cannot afford high prices. Additionally, centers also require that the demand for childcare services be high enough that they can recoup their operating costs. But rural areas usually do not have a high demand for childcare services due to the lower population density. As a result, this leaves family childcare centers as the providers of choice in rural areas. Unfortunately, FCCs have been on the exit due to multiple reasons, one of which is regulation.

In the last several years, the state of Minnesota has tightened regulations and increased training and paperwork requirements. And FCCs have been having trouble navigating the expanding as well as changing regulatory environment. Additionally, county licensors have been known to enforce regulation inconsistently and punitively which makes it harder for providers to operate, let alone make a profit. This is the time for the legislature to assess Minnesota’s regulatory code and remove all rules that scarcely contribute to safety and quality in childcare but make it hard for providers to operate.


Childcare capacity needs building in Minnesota and that will not happen with increased funding alone. Minnesota has stringent laws that have led to the exit of many childcare providers and they make childcare less affordable for parents. It is time that the state evaluates some of its laws that contribute to higher cost as well as a shortage of access, especially in greater Minnesota. In as much as we want families to be able to afford childcare, we also need to ensure that providers exist amply. And that is where regulation comes in. If not addressed, overregulation will continue to burden providers and contribute to the exit of many more family childcare providers as well as licensed centers.