After decades of families performing small miracles to afford childcare and sitting for years on waitlists, politicians are finally treating early childhood education like the essential economic infrastructure it is. Around the country, states and cities are pursuing universal preschool and childcare programs. It’s exactly the kind of bold, life-changing social policy that those of us in this field, like myself, have spent our careers fighting for.

If it’s done right.

Unfortunately, the most ambitious new attempt at universal childcare in America right now is in danger of making a mistake that has derailed past efforts: throwing money at parents without providing enough care for them to spend it on.

New Mexico has touted itself as the first state to offer universal no-cost childcare, thanks to a long, 15-year fight led by parents, childcare providers, advocates, and voters. In 2022, they achieved an iconic, grassroots win, unlocking unprecedented, permanent funding for early education through a ballot initiative. This financing victory accounted for the vast majority of the 130 percent growth in the state’s early childhood budget since 2019, enabling the state to more than double the number of children served in its childcare and prekindergarten programs and to make these programs free for families using them.

But the decisions about how to implement the state’s Universal Child Care program have continued to dig New Mexico deeper into policies that have proven elsewhere to fail. In the rush to claim victory, the state has prioritized expanding demand-side subsidies, giving parents vouchers for free childcare. However, by flooding the market with demand without sufficiently increasing the number of actual places for families to bring their children, or by paying educators enough to stay in the field, the state is creating a textbook policy failure.

And if New Mexico stumbles, it could drag down similar efforts around the country.

Childcare doesn’t just have an affordability problem; it’s also hard to find, primarily because of high staff turnover and high operating costs. To create a universal system where all families who need care can find it, afford it, and benefit from it, policy must address supply and quality alongside cost.

In most markets, making a service more affordable for consumers and more profitable for producers should trigger an immediate surge in supply. Logic suggests that offering free childcare for New Mexico families would cause new slots to rapidly open as providers look for ways to capture those dollars.

But as Mildred Warner, a Cornell University professor and leading expert on childcare as economic infrastructure, argues, this sector is defined by a fundamental “market failure to generate sufficient market supply.” Warner’s comparative research across three countries — the United States, Australia, and the Netherlands — found the same pattern: The typical way of funding childcare through vouchers boosts parent demand but doesn’t increase the number of slots available. And in rural and low-income areas, it has been shown to shrink it.

The reason, says Taryn Morrissey, a professor of public policy and childcare researcher at American University, is that childcare can’t scale like other industries. “You cannot have 100 babies in a lecture hall with one adult,” she told me. States regulate how many children a single adult can care for to ensure safety and the warmth and consistency that young children need from adults. This means that every new slot requires a proportional investment in trained staff and physical space.

This “market failure” is playing out in real time across New Mexico. While the state has successfully opened the floodgates of demand, increasing the number of children receiving childcare assistance vouchers by 78% from 2019 to 2025, the physical infrastructure has not kept pace. In the same six-year period, the state’s total childcare capacity in regulated care (which includes neighbors and relatives and daycare homes and centers) grew by just 1.9 percent, from 70,108 slots in 2019 to 71,455 in 2025. A spokesperson for New Mexico Early Childhood Education and Care Department (ECECD) noted that within this subset, licensed care had grown significantly but was offset by a decrease in home-based care that officials are trying to address.

The early childhood agency’s own estimates, announced alongside the Universal Child Care rollout as targets the state would need to meet, identify a shortfall of nearly 16,000 physical childcare slots and require at least 5,000 new professionals to staff them. Those targets remain unmet.

For families in rural areas like Gallup and the Navajo Nation, this shortfall is particularly acute. Colleen Roan, an early childhood leader in McKinley County, said that the sheer cost of upgrading older buildings to meet licensing codes makes opening new centers nearly impossible.

“There is universal childcare, but at the same time, there are not enough providers,” Roan said. “Although it’s universal, it really isn’t accessible across the board. ... I hear about individuals being denied, mainly because they are not able to move on with becoming a registered in-home childcare provider.”

Roan’s last point highlights that even the avenue meant to be a lower barrier to entry — registering to serve a few children in your own home — isn’t working in her region. It’s not because safety regulations, like requiring background checks, training, and basic inspections, are too strict. Research suggests lowering standards does not increase supply. The bigger issue is raising the startup capital, the cost of meeting basic zoning and licensing standards, and a lack of help to navigate the process.

ECECD secretary Elizabeth Groginsky disputed this framing, arguing that the state’s vouchers and broadened eligibility are “explicitly a supply-side strategy” that boosts public investment into the overall childcare sector. Her agency pointed to recent increases in the total number of workers and facilities available as evidence of progress.

“New Mexico’s policies have demonstrably increased the state’s licensed childcare supply and have led to the nation’s steepest gains in child care compensation and workforce growth,” Groginsky said in a statement.

It’s true that the money invested has made a difference, but the question is how to stretch scarce funding far enough to tackle the problems it’s meant to solve.

Vouchers put money in families’ hands, but they don’t build buildings, train teachers, or navigate the process of licensing and opening a new business, and the uncertainty around how many parents will utilize them makes providers more reluctant to invest in new capacity.

Policy experts have long warned about this mechanical failure, which is made worse by unpredictable revenue. A 2020 report from the Center for American Progress explicitly outlined why vouchers fail to build supply: Because vouchers are tied to individual children rather than to seats, a provider’s revenue rises and falls with each family’s eligibility, enrollment, and the ability to navigate approval processes. When a child leaves, the funding leaves with them. What providers need instead is fixed operating support that the state can guarantee as a backstop. If states want to increase the supply of care, they must swap vouchers for direct grants and contracts that pay for classroom enrollment, guaranteeing the revenue needed to provide high-quality care to families and wages to educators.

And rather than build around this problem, New Mexico wrote it into law. The 2026 Child Care Assistance Program Act, or Senate Bill 241, codifies the statutory framework for the state’s expanded voucher program and unlocks $700 million for the state’s Early Childhood Trust Fund over the coming years. But the bill contains no parallel provisions for direct facility grants, capital investment, or contracts for classroom enrollment. Instead, it offers a few supply-side levers — a small revolving loan fund for facilities, capital outlay for higher-education-based centers, scholarships for educators — at the margins, rather than as part of the state’s central funding mechanism.

A lack of supply doesn’t just leave more frustrated families; it creates a competition that the most vulnerable families are least equipped to win.

When the state made childcare free for everyone but didn’t build more of it, it invited thousands of new families to compete for the same scarce slots. The families who come out ahead are often the ones who can get on a waitlist months before their child is born, who know which providers to call, and who have a car to tour many programs in one day or to tour those programs during business hours. The families who lose are disproportionately the ones the policy was meant to help: lower-income parents working hourly jobs with less flexibility, less access to information, and fewer backup options when the waitlist doesn’t move.

This crisis is most acute for families with the youngest children, where slots were the scarcest to begin with. Catron Allred, the executive director of the Early Childhood Center of Excellence at Santa Fe Community College, currently has a waitlist of 600 to 700 children, with the greatest demand for infant and toddler care. She said that her biggest hurdle is finding capital to build more classrooms and people to staff them who are properly credentialed and can cover their 10-hour days.

“We are competing with public schools who get out at 3 pm and don’t work in the summer,” Allred told me. “This has been sold as not a profession for so long.”

Groginsky, the ECECD commissioner, noted that infant and toddler care was a problem nationwide and not just in New Mexico and that the state has put “unprecedented public investment” into the childcare sector.

But the data also makes clear that the failure of vouchers to build supply is having the biggest impact on these youngest children. While the absolute number of infants and toddlers in the program has grown alongside overall enrollment, the gains are far below those of older children. According to the Legislative Finance Committee, the proportion of children under age 2 enrolled in the state’s assistance program has nearly been cut in half, dropping from 21.3 percent in 2020 to just 11.6 percent in 2025.

Allred’s experience explains why: Infants require more adults to care for them, making them the most expensive slots to provide.

We know exactly how New Mexico’s path ends, because Quebec and South Korea made the exact same mistakes decades ago.

To quickly implement universal systems, they took a path that sounds familiar. In 1997, Quebec rapidly expanded subsidies to more providers to meet its bold “$5-a-day” promise for childcare costs. In 2012, South Korea invested billions in demand-side vouchers. In both cases, they prioritized the speed of the expansion over building the supply and workforce to support children.

The consequences of outsourcing universal care to the path of least resistance were severe. In South Korea, the flood of state funds into the private market created a two-tiered system, leaving parents on years-long waitlists for the few high-quality public centers.

In Quebec, the result was equally cautionary. While the 1997 rollout successfully boosted maternal workforce participation, it took nearly a decade for landmark longitudinal research by economists to empirically prove the developmental cost of that rushed expansion. Because the province scaled up so quickly, relying heavily on lower-quality, hastily assembled care settings to absorb the massive surge in parent demand, researchers tracked lasting negative impacts on children’s non-cognitive development, including increased anxiety and aggression.

To be clear, this data does not suggest that universal childcare is inherently harmful. Rather, it shows that treating childcare merely as a demand-side affordability issue can actively harm the children the policy is meant to serve. Quebec has since become an example of what can work by course-correcting: raising educators’ wages, tightening quality requirements, and heavily prioritizing the expansion of its public education system through non-profit childcare centers.

The good news is that we don’t need to study abroad to see the benefits of well-implemented universal childcare.

Jurisdictions like New York City, Vermont, and San Francisco are proving that, when robust financing meets well-planned policy, children and families win. By treating early childhood education not as a private consumer transaction, but as essential public infrastructure, these governments are building systems that actually deliver on the promise of access.

In Vermont, where Act 76 was passed in 2023 to establish a payroll tax to fund childcare, the state has begun shifting to predictable, stable funding through contracts with childcare providers. The bill officially set the stage for state-mandated minimum pay standards for early childhood educators and created clear career pathways to elevate what is often maligned as “babysitting” into a respected profession. When Vermont’s governor attempted to veto the bill, the state legislature successfully overrode him , recognizing that, without stabilizing the workforce, the entire system would collapse.

San Francisco has also taken a different approach, investing in the workforce first and expanding second. In 2018, voters passed “Baby Prop C,” a commercial rent tax dedicated to early childhood. Rather than immediately using that funding to subsidize more families, the city’s Department of Early Childhood spent years building the supply side, including offering educators a stipend of $4,000 to $39,100 annually to raise wages to that of K-12 public school teachers. Only after years of stabilizing the workforce did the city announce, in early 2026, a massive expansion that guarantees free childcare for families earning up to $230,000 a year.

Finally, New York City is demonstrating how to phase in universal childcare intentionally. Rather than flooding an unprepared market with vouchers, the city treated expansion like a public works project. They rolled out by age, starting with Universal pre-K for 4-year-olds, then expanding to 3-year-olds. Now, the city and state are methodically rolling out “2K” starting in 2026, with 2,000 seats strategically placed in high-need neighborhoods to ensure the physical supply is in place before expanding citywide. Crucially, the state is backing this up with over $150 million in direct capital funding to build new classrooms.

States looking to make the universal childcare moment work for children can learn from these lessons and from the hard-fought financing victory in New Mexico. But funding is only the first step. Until policymakers stop relying on expanding the limited systems we have and start directly funding the facilities and the educators required to do the work, universal childcare will remain a brilliant promise that benefits only some.