Child care could soon become harder to find and more expensive
It's scarce, expensive and for many people, it's one the hardest things about becoming a new parent. I'm talking about finding child care. The industry has struggled for years with both high costs for parents and low wages for teachers. Now, with COVID-era subsidies set to end later this year, there are worries this long-simmering problem could become a crisis.
Marshall Terry: So what's the general state of the child care industry after the pandemic — are providers facing different challenges than they were before?
Janet Singerman: So child care, I would say, in Mecklenburg County, in North Carolina and across the nation, is at a pretty critical flashpoint. The pandemic made it clear that child care was essential. The pandemic really laid bare the inadequate and fragile economic equation within which child care programs have to operate. It's fragile because child care finances and financing are largely based on what parents in their early earning years can afford to pay for care during their children's early learning years, with infant care alone averaging more than $15,000 a year for just one child.
So over the past three years, child care program operators have been severely challenged by fluctuating and reduced child care enrollment, increased operating costs and increased staffing costs. I guess the good news is that during the pandemic, the Division of Child Development and Early Education, which is our lead child care agency in North Carolina, successfully executed a myriad of programs and policies with a historic $1.9 billion federal investment.
One particular strategy, that will be ending in December, is the Stabilization Grant program. The Stabilization Grants program had two components: one to help support the fixed costs of child care program operators and the second component for compensation components. This money has propped up the industry.
Terry: What's going to happen when that money goes away?
Singerman: Our already fragile system will be that much more fragile. We are concerned about the negative impact on access to important early learning opportunities for children. We are concerned about access to quality child care for working families, for young children of all ages, but in particular also for infants and toddlers. We're certainly concerned about the availability and willingness of early educators to enter or remain in the child care field as a result of inadequate salaries and wages and benefits.
Obviously, this will impact employers' ability to attract and retain working parents, impacts the continued viability of child care program operations for owners and directors, and ultimately impacts our continued economic recovery, whether you're talking locally statewide or across our nation, the financing of child care is just inadequate.
Terry: These child care services, they're expensive, with child care at a five-star licensed center averaging something like $14,000 to $16,000 a year. But the teachers, the actual providers, are paid really low wages, $13 to $15 an hour — way less than teachers for older kids or even someone working, say, in an Amazon distribution center.
What's going on here? Why is this system so seemingly out of whack?
Singerman: Well, child care is expensive to operate. It is a labor-intensive service. You know, anywhere from 65% to 85% of a program operator's budget goes into the salaries of staff. The first five years of child care in Mecklenburg County, on average, cost $72,582. Four years of college tuition and fees at UNCC is about $28,092. Four years of college tuition at UNC-Chapel Hill is $31,998.
We don't have the kind of public will around child care and early-on education as a public good that we do for K-12 education, that we do for college education — and our system has always been underfinanced nationwide.
Terry: According to a report that your organization did, looking at Mecklenburg County, there are about 48,000 licensed slots in child care centers, but only around 39,000 slots actually available. Now, is that because of the worker shortages that you've mentioned and the difficult time holding on to workers because of these low wages?
Singerman: It is due to a variety of reasons. We're down about 6% in programs, 2% in licensed capacity and 11% in enrollment. So enrollment has declined more than our supply of programs and slots — and that's for a variety of reasons.
It's because families may have changed their child care arrangements and more families are working remotely. It may also be influenced by continued public health concerns about young children in group care. The staffing crisis is absolutely impacting the availability of care for children within programs. So we're not seeing programs close, but we don't necessarily see programs operating at their full capacity either.
Before the pandemic, teacher wages were about $12 an hour. With stabilization funds, wages have risen to about $15 an hour. But even at $15 an hour, you can earn more at a fast food restaurant or a call center, as you mentioned, in any number of other kinds of jobs that are paid better wages and also have better benefits than child care. When the stabilization grants end, those wages that have crept up to $15, which are barely competitive, will creep back down.
Terry: So what's the solution to all of this?
Singerman: Increase investment in child care as a public good that supports both workforce development and economic development, that helps parents work and children have access to high-quality early learning opportunities and safe and nurturing care opportunities that child care provides.
This is really a function of public will. I have to say, in Mecklenburg County, the Board of County Commissioners and the county manager have invested significantly in early career and education with voluntary universal pre-K, with county-supported child care subsidy programs, in addition to those that are state and federally supported. But more investment is needed federally and at the state level.
Terry: Well, we appreciate you taking the time. Thank you.
Singerman: Thank you.