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A senator has opened an investigation into the country’s two largest child care companies that are controlled by private equity — as families grapple with rising prices.
On Tuesday, Oregon Democrat Jeff Merkley sent letters to KinderCare Learning Companies and Learning Care Group, in addition to their respective owners, requesting detailed information about how the Wall Street-backed firms operate.
“Some analysts suggest that the growing role of private equity and other profitmaximizing ownership models in child care centers increase challenges related to affordability, staffing, and access—particularly where investor strategies increase financial pressure to raise prices, constrain labor costs, or concentrate capacity in higher-revenue markets,” Merkley wrote in one letter.
He pointed to an analysis showing that eight of the 10 largest child care firms are owned by private equity, while also citing studies that found such centers are more likely than their nonprofit counterparts to have staffing shortages, lower wages and higher prices.
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Child care costs in the United States have become a growing financial burden for many families, especially in recent years.