With the pandemic money gone, child care is one sector on the brink
Running a childcare business has long been a very challenging mathematical problem: many providers can barely afford to operate, yet many parents can’t afford to pay more.
There was temporary relief during the pandemic. The federal government $24 billion spent to keep the sector afloat. Many providers were paid thousands of dollars per month, depending on their size they used to pay costs, the largest of which was wages.
But that funding, which began in April 2021, expired in September. Five months later, the company is more precarious than ever.
In addition to the end of monthly checks, provider costs have risen along with inflation – for food, supplies and liability and property insurance. Rising wages in food service and retail jobs have made it harder to recruit workers in child care, one of the lowest-paying jobs in the country.
And families’ use of child care has changed, making it difficult for providers to maintain the required number of employees and earn a stable income. Some parents now make less consistent use of care because they work from home more often or are found alternative arrangementssuch as having relatives or nannies caring for children during the pandemic.
The result is a sector on the brink, new data shows.
In according to a study published on Sunday According to the National Association for the Education of Young Children, more than half of the 3,815 child care owners or directors said they enrolled fewer children than they were licensed for. This was usually due to staff shortages; they said they couldn’t afford to pay workers more because parents couldn’t afford to pay more.
Half of providers said they had increased tuition. Of a broader group of more than 10,000 child care workers surveyed, 55 percent said they were aware of at least one program in their community that had been cut since federal funds expired.
Many parents feel the stress of rising costs and decreasing availability. Average is one recent research by Care.com Research shows that they spend a quarter of their income on child care (the Department of Health and Human Services). says for childcare to be affordable, it must cost no more than 7 percent of family income). A majority said tuition had risen and waiting lists had grown since funding ended.
Some have dipped into their savings or taken on more jobs to pay for care. Others have asked family or friends to care for their children, or have reduced their working hours to do so.
“As these funds disappear, programs that were barely holding together are being pushed over the edge of unsustainability,” said Elizabeth Ananat, an economist at Barnard College.
The Biden administration has done that asked Congress for $16 billion for a year of additional child care funding, and a group of Democratic senators has supported italthough it is unlikely to gain the Republican approval needed to pass.
In the meantime, some statesincluding some led by Republicans, have invested state funds to offset the loss of federal funds. For example, Vermont will spend $125 million a year on major expansions of subsidy eligibility for low-income families, and Kentucky will spend $50 million on subsidies after federal funds expire.
That’s not enough, says Sondra Goldschein, executive director of the political action committee of the Campaign for a Family Friendly Economy, which is spending $40 million to support President Biden and Democratic candidates who support child care. “We want child care to be seen as permanent infrastructure and we have made substantial investments in the sector at the federal level,” she said.
Subsidizing child care for most providers, as the administration did during the pandemic, or for most families, as the Biden administration failed to do in its welfare spending bill, is politically unlikely. Republicans did not support the bill’s family policies, including broadly subsidized child care and universal pre-K.
But there is support from it both parties for other ideas. One of those is increasing funding for the block grant that helps low-income families pay for child care. It received another $15 billion during the pandemic, but that expires this fall, and before that expansion it also served only 14 percent of eligible families. Another is giving employers tax breaks or other incentives to help employees pay for childcare.
Policies aimed at low-income families and focused on how child care employers are more likely to reach a bipartisan agreement, said Patrick Murray, vice president for government affairs at KinderCare, a chain of 2,300 child care centers, which the block grant worked. a policy advisor to former Republican Senator Lamar Alexander of Tennessee.
This year has been the most challenging in three decades for Rebecca Davis, who runs an Arkansas child care center from her home in the Little Rock area.
She used to care for children from six weeks of age until they entered kindergarten, but turnover has increased since the pandemic. Taxes should be levied on the pandemic grant money.
Still, she can’t raise tuition: “It’s a catch-22: I would love to give my employees a stipend or an increase in their hourly wages, but I can’t because the costs of everything have gone up, and parents just can’t do it pay.”
After expenses—payroll, utilities, mortgage payments, food and supplies—Ms. Davis’ take-home pay is often about $2 per hour.
“You don’t make a living doing child care,” she said. “Why am I doing it? Because I love making a difference in a child’s life.”
Before the pandemic, Shineal Hunter, like her mother, grandmother and great-grandmother before her, worked in child care and ran a center for 55 children in Philadelphia. It focused on caring for children with behavioral problems and helping families find services such as housing or food assistance.
However, after the pandemic, the business became unsustainable, with rising costs, inconsistent footfall and staff shortages.
With the end of federal funding in sight, she closed her center.
“It’s heartbreaking that all the energy and effort I’ve had over the past 15 years, and the services provided in my community, are gone,” she said. “I think about the children who are now going to fall through the cracks.”
She looks after one child at her home, before and after school, and works part-time as a therapist. But she would like to return to childcare and is making plans to reopen.