The 1996 welfare reform law fundamentally changed the way the federal government provides funding to the states for child care. As policymakers debated welfare reform, they acknowledged the need for greater child care services if mothers were required to work. The law also provides additional funds states can receive if they match the dollars at the Medicaid matching rate. These funds do not require a match. High turnover within the child care workforce affects the quality of services.
Many states report difficulty keeping people working in the child care field due to low wages.
This is especially true since many schools are seeking more primary and secondary teachers and offering much higher salaries. Few states provide benefits at this level. A report commissioned by HHS and published in December 2000 studied states' increased child care spending. According to U.S. Census data, in 1996, three out of four mothers with children ages 6-17 were working, compared with one in four in 1965. In 1996, two-thirds of mothers with children under age 6 were working.