Originally Posted by Blackcat31:
Your questions are bolded, my answers follow...
why are there so many daycare waiting lists across the country? Good, quality care is hard to find.
Why don't providers simply raise their rates until people who are willing to pay get in immediately and those who are not convinced it is worth the price go to a different location? Because the clients I have are enrolled are enrolled because they are a good fit NOT because they pay more or would be willing to pay more. Sadly some of the worst kids I've ever had in care had parents that would have paid ANY price I quoted if I'd continue caring for their child.
My time, self worth and sanity are worth MORE than agreeing to care of a child/family that isn't a good fit for me and my program
Is there some other regulatory reason why rates aren't higher? No there is no rule or regulation that dictate what I charge for rates but I certainly am not going to have an business if I charge a parent more than their budget can afford or more than they are being paid themselves.
Supply and demand play a huge role in rates but how much the community can sustain plays a bigger role.
Bottom line for me I do this job for the money but it's not all about the money.
I need to have families I am able to work with, kids that get along well and clients that I know care about all the other things that child care entails.... quality, program content, provider training/experience, location, etc....
I hope that helps answer your questions. 
Thanks, Blackcat31! It makes sense that there are many other dimensions besides price that are important for getting a good client match. Perhaps the waiting list makes it possible to sort out those other characteristics.
I suspect it varies by state but I have heard that serving lower income families can come with subsidies but that there are additional rules with this sort of contract. That is what I was thinking of when it comes the regulation side of things.
And I just want to be clear that I fully appreciate the work that child care providers do! It is a tough job that requires a passion for the well-being of children. My curiosity is really due to the fact that waiting lists are generally rare in other business/services, especially ones that are so long and persistent. I'd expect over time that more child care providers would open up or that prices would inch up to reduce the waiting list times.