Every day, Annette Nicholson opens her door as early as 6 a.m. to welcome 10 kids into the child care business she runs out of her home in Stockton.

Nicholson lives on the north edge of town, where child care options are slim for working families. The parents who rely on her mostly work irregular hours, or need to drop off their kids early to commute long distances to the Bay Area.

Some leave babies as young as 6 weeks old with her. Some have even called her in tears, pleading with her to take care of a sick child because they can’t afford to miss work.

Throughout the day, Nicholson reads to the preschool-age children, plays with them, watches over their naps and cooks eggs, oatmeal and other hot meals for everyone until the last child gets picked up around 8 p.m.

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She works long hours, yet barely gets by. At 62, Nicholson doesn’t have enough savings to retire because she has been underpaid.

“People still kind of see us as, I’ll say, babysitters, that’s really how people look at us,” Nicholson said. “We are actually the ones that are developing our next generation.”

Child care is a labor-intensive and essential service, yet people in the child care industry are some of the lowest-paid workers. The Center for the Study of Child Care Employment at UC Berkeley found that home-based providers make as little as $16,200 per year (PDF) — that’s less than what a dog trainer makes. Like Nicholson, nearly all are women of color and many are immigrants, the study found.

An at-home child care worker in a rainbow T-shirt helps a little boy in a red T-shirt untie a knot in his black sneaker laces. — Annette Nicholson, also known as Gaga, helps a child with a knot in his shoe at the day care Nicholson operates from her home in Stockton on April 27, 2023. (Beth LaBerge/KQED)

Nicholson follows a strict set of licensing requirements, such as meeting appropriate adult-to-child ratios in addition to meeting fire safety codes, sanitary food preparation standards and other requirements.

She also serves a wide demographic of families who pay private tuition, as well as lower-income families who receive public subsidies for child care. Still, those subsidies don’t adequately cover the cost of operating a licensed child care business, according to Nicholson.

“We provide all the meals, the location, toys, the assistant, the education piece, the tools to go with that,” she said.

The providers who care for the most marginalized children in California are paid at reimbursement rates based on outdated prices from at least five years ago that neither reflect the true cost of care nor keep pace with the cost of sustaining a business, according to an analysis by the California Budget and Policy Center.

An independent study commissioned by the state found the rates meet only 25% to 30% of the current costs to provide child care. Yet, U.S. Department of Labor data shows parents are paying between 8% and 19% of their median income for child care either at a home-based program or a center.

A residential neighborhood with track homes and a cul-de-sac is pictured. Cars are parked in driveways and it's a sunny day. — Gaga’s House, a day care run by Annette Nicholson at her home at the end of a cul-de-sac in Stockton, on April 27, 2023. (Beth LaBerge/KQED)

The lack of available and affordable child care leads many parents of young children to leave their jobs. Economists call the untenable situation a market failure.

Providers like Nicholson find themselves filling the gap between what parents can afford — and what the government pays for child care. Oftentimes, parents will take on credit card debt to make ends meet. Nicholson said she’s even dipped into her own savings to fix a fence that was damaged by a storm, so the children can play safely in her backyard.

Stagnant, meager wages are driving a shortage of early educators, causing child care centers to sometimes close classrooms when they don’t have enough staff to meet the adult-to-child ratio. For example, a study in Contra Costa County found that 90 child care sites permanently closed during the pandemic, leading to even longer waitlists for subsidized care.

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The state tried to respond to the demand for child care by adding 200,000 new slots for lower-income families by 2025–26 — more than doubling what had been previously available. So far, the state has only filled about 146,000 of them. The situation prompted Gov. Gavin Newsom to propose delaying funding for 20,000 additional slots to help balance the budget.

Child advocates said the problem isn’t because families don’t need public assistance for child care. It’s because there aren’t enough workers or licensed facilities to fill the slots.

“It’s urgent that we take care of this now because, as many of our advocates have said, care can’t wait,” Assembly Majority Leader Eloise Gómez Reyes told KQED. Reyes is asking lawmakers to bump up the reimbursement rate for providers of subsidized child care — essentially giving them a raise.

“They’re taking care of the most precious people in our lives, and yet we are not paying them enough to keep their doors open,” she added.

Reyes said the increase will at least keep pace with the cost of living and stabilize the workforce, especially as federal pandemic aid dries up. Democrats in the state Senate agree and have proposed hiking certain business taxes to pay child care providers. A spokesperson for Newsom, however, told KQED that he won’t support the tax increases.[pullquote size="medium" align="right" citation="Assembly Majority Leader Eloise Gómez Reyes"]‘They’re taking care of the most precious people in our lives, and yet we are not paying them enough to keep their doors open.’[/pullquote]Child Care Providers United, the union representing some 40,000 home-based child care workers in California, is going one step further. It wants an overhaul of the rate reimbursement system, to more accurately reflect the true cost of providing quality care and offer early educators a living wage.

Last year, a work group convened by the state to assess that system concluded “the chronic undervaluing of ‘women’s work’ and racial bias against women of color” contributed to the low rates for early educators. Their report traces the pay inequities to America’s slavery past (PDF), when Black domestic servants cared for the children of white families for little or no pay.

An at-home child care worker sits on a chair with children surrounding her who sit on a brown carpet. The worker is reading a story from a blue-colored story book about dinosaurs. — Annette Nicholson, also known as Gaga, reads a book to the children at the day care she operates from her home in Stockton, on April 27, 2023. (Beth LaBerge/KQED)

“If we were a male-dominated workforce, you wouldn’t even try to be this disrespectful with giving us a livable wage,” said LaWanda Wesley, a former early educator and advocate with Black Californians United for Early Care and Education.

“So these women of color … some of them are 67 years old, don’t have health benefits and have to work year-round. So now you won’t pay them well … you’re getting free labor almost (from them),” she said.

Nicholson said she hopes to see potential reform that recognizes her important role in nurturing young children during the most critical period of their brain development.

An at-home child care worker hugs a little kid next to the book, "Danny and the Dinosaur." A shelf filled with baskets of colorful toys are to the left. — Annette Nicholson, also known as Gaga, hugs one of the children at the day care that she operates from her home in Stockton, on April 27, 2023. (Beth LaBerge/KQED)

She used to work as an administrator for Kaiser Permanente before deciding some 16 years ago to apply for a license and care for children inside her suburban tract home. She said her hospital job wasn’t fulfilling, and she wanted to return to her roots — helping her mother with her home-based child care business.

Nicholson said she has reached a stage where she’s caring for the children of people she helped raise many years ago.

“You have to not only take good care of kids, you’ve got to love kids ’cause kids can wear you down,” she said. “You have to love them even more, to know that you’re not going to get what you deserve at doing this job.”

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