One State's Free Child Care Lifted 120K Out of Poverty

Three years ago, New Mexico did what no other state in the nation had done before: It offered free child care to families earning up to 400% of the federal poverty level, or about $124,000 for a family of four. About half of the kids within New Mexico's borders qualified for the program, and reports are now filtering in on the initiative's impact. In short: It's proven to be a "powerful" promotion, with both families and workers in the child care industry reaping the benefits.

• COVID era: Ahead of the pandemic, New Mexico had already started making moves under Gov. Michelle Lujan Grisham to improve early-childhood policies by setting up a trust fund for that purpose. Federal funding during the pandemic allowed the state to raise wages for entry-level child care providers to $15 per hour, made it easier for more families to qualify, and became "the first state in the nation to set child care subsidy rates at the true cost of delivering care," per the Guardian.

• Post-pandemic: In 2022, when COVID relief from the feds started dissipating, New Mexico scrambled to find money from other sources, including by directing a portion of the state's Land Grant Permanent Fund to education. Voters decided that 1.25% of the permanent fund, which is fueled by taxes on fossil fuel revenues, should be put toward early-childhood programs. By the end of 2024, the trust fund boasted more than $9 billion.
• Results: From 2013 to 2015, 17.1% of residents in New Mexico were found to fall below the federal "supplemental" poverty line, which takes social safety nets into account—giving the state the dubious honor of being the fifth poorest in the nation. Now, only 10.9% are living in poverty, meaning about 120,000 New Mexicans escaped that life, per the Guardian.
• Child care workers: The state also raised wages for those in the industry, and benefits were felt there, too. In 2020, more than 27% of child care providers, who are often women of color, were found to be living below the poverty line. In 2024, that number fell to 16%.

• Still steep: In the US at large, the average family paid close to $12,000 per year for child care in 2023, per NBC News. According to the nonprofit Economic Policy Institute, New Mexicans are still paying more for infant care than they are for housing and college tuition, with infant care for just one child eating up more than a fifth of the median family income in the state. For workers earning just the minimum wage, they'd have to fork over more than 57% of their annual pay to cover a year's worth of infant child care.
• Testimonial: Still, recipients of the free child care are grateful for the extra financial assistance. "Without this, we would be struggling a lot, and with this, we are making it," Santa Fe's Maggie Wright-Oviedo says bluntly of her family of four, which includes a baby and a toddler, per NBC. Wright-Oviedo says she wept when the ballot for the free child-care program passed, noting that her family would be using at least half of their take-home pay, or $2,600 a month, for child care without the state's help.

(More child care stories.)