TUE AM News: WI childcare facing funding ‘crisis’ this summer, report shows; UW economist lays out consequences of long-term trade disruption

May 26, 2026

— The Wisconsin Early Childhood Association warns the state’s childcare industry will face widespread shutdowns and pared-back services without sustained government support.

The group on Friday released a report analyzing the impact of pandemic-era stabilization funding running dry this summer, following several years of federal help for the struggling industry. That funding has included the COVID-19 Emergency Payment Program, then Child Care Counts and the more recent Child Care Bridge payments, with funding slated to end after June, the report shows.

Childcare providers in Wisconsin were hit especially hard during the pandemic. Their revenues dropped 36% in 2020, compared to the 9% decline across all service sectors, according to WECA. At the same time, employment in the childcare sector fell by 31%, more than twice the 14% impact across other industries.

“These losses added to existing challenges in a low-margin, labor-intensive field,” authors wrote. “Together, these factors show how deeply the pandemic disrupted Wisconsin’s child care system and pushed an already strained sector into crisis.”

But federal stabilization funds helped offset the impact, the report shows, boosting the early childcare workforce in group programs by about 17%. Authors note growth was closely linked to funding levels for the industry.

The pandemic disruption followed an earlier decline — the number of childcare programs had fallen by an estimated 30% from 2013 to 2020, while the period since then has seen “modest” growth of about 4% despite the impacts on revenue and employment.

Now, as funding is set to wind down in about five weeks, the association is sounding the alarm as providers signal their concern about the support going away. Referencing a state-level survey from the UW-Madison Institute for Research on Poverty, the report shows childcare programs are eyeing tuition increases, cutting jobs and even shutting down in some cases.

About three-quarters of surveyed providers said they would need to raise tuition, including 21% who said they expect to raise rates by at least $25 per child and 17% expecting to raise rates by $50 or more per child. That amounts to an increase of up to $2,600 per year for families, according to the report.

Meanwhile, a fourth of surveyed providers said they’re “somewhat, very or extremely likely” to close their programs if stabilization payments end.

“Risk of closure was especially high among small and family based providers and in communities with limited alternative care options,” authors wrote, noting others say they’ll be driven to cut staff hours or entire jobs, freeze hiring and get rid of benefits and bonuses.

As a potential model solution, the association notes other states including Minnesota and Massachusetts have transitioned their stabilization funding into permanent or sustained state-funded programs.

“Without sustained funding, Wisconsin risks reopening an [early childhood education] gap that took 11 years — and extraordinary effort from educators — to shrink,” authors wrote.

See the report.

See the release.

— A UW-Madison economist says the global economic outlook is dimming, as long-term disruption of trade through the Strait of Hormuz could contribute to lower growth, greater inflation and even the possibility of domestic shortages.

Kim Ruhl, the Curt and Sue Culver chair of economics at the university and co-director of the Center for Research on the Wisconsin Economy, spoke during the latest UW Now livestream hosted by the Wisconsin Alumni Association. Ruhl was also a member of the White House’s Council of Economic Advisors from early 2025 to earlier this year.

He noted about 20% of the world’s oil supply moves through the strait, which has been blocked amid the conflict between the United States and Iran, leading to spikes in both oil prices and U.S. inflation. But the key shipping route also serves the global petroleum products market, as well as moving products like helium and other specialty gases such as ammonia.

“A lot of petroleum-type products eventually become things that look like fertilizers, which is hitting sort of right as planting season in a lot of the United States is happening,” he said, adding “this is not just the price of gasoline that’s going up, but it’s the price of lots of things, including eventually things like food.”

If the war doesn’t last long, the largest impact will be inflation, Ruhl noted. But if it stretches on into the longer term, inventories of oil and other products will get whittled down, leading to further price increases and potential shortages.

“As we’re running down those stocks of inventories, things are going to get tighter, prices will go higher … People who are old enough may remember from the oil shocks of the 1970s. For now, we’re seeing something that looks like inflation. If this was to go on long enough, we might see something a little more harmful.”

Referencing forecasts from the International Monetary Fund, Ruhl noted the “worst-case scenario” for this year and next year results in global GDP growth dropping to 2% with inflation rising to 6%.

“This is really a question of how quickly the engagement can be wrapped up, and then even once it’s wrapped up, you’d anticipate it being months probably before markets renormalize … It will still take a little bit of time as well for things to bounce back,” he said.

Watch the video.

See more coverage.

— A Sheboygan County robotics startup called Grabot.Tech will compete in a robot fighting competition in Las Vegas later this year, pitting its technology against others in a cagematch-style battle.

The company, founded by inventor Ben Davidson, is set to participate in the BattleBots Creature Combat II on Halloween weekend. It’s the second such competition for Davidson, who says “most of this started as a hobby” in his basement workshop.

“But over time, the capabilities of these machines have really started to improve,” he said in a release from county officials. “The same robotics platform can potentially scale from toy-sized applications to industrial construction-sized machines.”

His fighting machine has large tires on each side with metal spikes, a flat shovel-like base and two mechanized arms that can lift up to 250 pounds, equipped with spinning saw blades.

Davidson is getting business support from local groups including the Sheboygan County Innovation Council and Sheboygan County Economic Development Corp., which say he aims to expand into manufacturing and licensing his robotics technology. That could include robotic assembly and fulfillment.

Justin Vannieuwenhoven, who chairs the council, says Davidson represents the kind of innovative entrepreneur that the groups want to support in Sheboygan County.

“He has spent years independently developing sophisticated robotics technology, and now there is an opportunity for the community to rally behind a local innovator competing on a national stage,” he said in a statement.

Davidson previously competed in another BattleBots fighting contest in 2020. The competition later this year will give him the chance to compete against other teams from around the world.

“This event is shaping up to be one of the most thrilling and fulfilling experiences I could imagine,” Davidson said in the release. “Win or lose, getting to compete alongside some of my childhood heroes is incredibly exciting.”

See more on the company.

See the release.

— The latest episode of WisBusiness’ “Talking Trade” podcast features insights on tariff uncertainty from a recent event, the final segment of a three-part series.

“Talking Trade” hosts Sandi Siegel and Ken Wasylik joined Carroll University professors Alexandra Sielaff and Lilly Goren April 22 at Carroll University to talk about the impact of President Donald Trump’s trade policies over the past year.

In part three, panelists discuss international relations, shipping changes, currency manipulation, the rise of China as a rival to the United States and more.

Watch the episode here.

See a WisBusiness story on the event here.

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