Chattanooga, TN — Chattanooga 2.0 has released the first-ever Child Care Cost Study for Hamilton County, highlighting costs and why many providers are unable to meet the care demand from families.
The study finds that costs to provide child care exceed tuition and subsidies, creating a persistent gap affecting teachers, providers, and families.
Hamilton County has approximately 27,000 children under age 6, but only enough slots to serve roughly one in three children. As a result, among the approximately 17,000 children in working‑parent households, an estimated 8,400 lack access to licensed, reliable care.
Key findings from the study include:
-
Child care providers operate under constant financial strain because the true cost of providing care is higher than what providers earn through tuition and public funding.
-
It costs providers between $900 to $2,000 per month to care for one child, depending on their age and the size of the program. By comparison, local parents pay anywhere from $600 to $2,100 per month if they don’t have a state certificate that helps cover child care costs.
-
Staffing shortages are a major barrier to increasing child care seats, often driven by low wages that make it difficult to recruit and retain teachers.
-
The average child care teacher wage in Hamilton County is approximately $15.31 per hour, with some earning as little as $10.38.
These findings help explain why many providers operate below capacity. Even when demand is high, classrooms can remain closed due to staffing limitations tied to compensation.
“Contrary to what many people think, the bulk of child care tuition is put towards keeping enough teachers and staff,” said Katie Harbison, president of Chambliss Center for Children. “The younger the child, the more teachers are required to be present in the classroom. So to increase staff wages, many providers like us have to either fundraise or pass that increase on to our parents.”
The cost study builds on Chattanooga 2.0’s previously released Child Care Seats Snapshot, which highlights how these financial pressures translate into real-world shortages for families.
The snapshot shows:
-
The largest gaps exist for children under age three, where demand far exceeds available care.
-
64% of children under age six live in households where all available parents are working, increasing the need for reliable care.
-
Child care shortages vary across the country, with some areas facing significantly greater access challenges than others.
Together, the two resources illustrate a core issue that the shortage of child care seats is not simply a supply problem, but a funding and workforce challenge rooted in the cost of providing care.
As costs outpace revenue, providers are forced to make difficult decisions—limiting enrollment, reducing services, or, in some cases, closing entirely. This instability affects not only families but also the broader economy, as parents struggle to maintain employment without reliable care.
“This cost model helps make the invisible visible. Child care providers are operating in a system where the math simply doesn’t work. Costs exceed revenue, and that gap shows up as staffing shortages, limited seats, and real barriers for families,” said Jennifer Andrews, Director of Early Childhood Strategies. “We’ve made meaningful strides through our early childhood action plan work, but partnership alone cannot solve a structural funding challenge. If we want a strong economy, children ready for school, and a prepared future workforce, sustained investment in child care must be part of the solution.”
The Child Care Cost Study provides a local data foundation to inform future solutions, including sustainable funding strategies that support providers, strengthen the workforce, and expand access for families.
Chattanooga 2.0 will continue working with partners across sectors to explore approaches that address both the cost of care and the availability of seats—ensuring more children enter kindergarten ready to learn and more families can participate fully in the workforce.
To view the full Child Care Cost Study and the Child Care Seats Snapshot, visit:
www.chatt2.org/costofcare
www.chatt2.org/costofcare
