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Education Attainment Division

Childcare Matters: Improving workforce compensation is the key to quality and availability

Emily Counts on Monday, January 6, 2020 at 10:00:00 am

This post was authored by Mary Manner, Great Start Coordinator, TraverseCONNECT

A new article about child care seems to pop up in the news almost every week, focusing either on the high cost of care or the shortage of quality care, or both. At their core, these issues are two sides of the same coin and the currency is workforce compensation.

In my home state of Michigan, as in many other states, the decline in the number of child care providers is alarming (find your state’s info here). As economic conditions here have improved in the last five years the demand for quality child care has increased yet the supply is on the decline, especially for infants and toddlers. On average, thirty providers close their businesses every month, and the reason most often given is to seek better pay and benefits.

If workforce compensation is fundamental to increasing the supply of quality child care, what can Chambers do to have an impact? The first step is to recognize child care providers as professionals who deserve to earn a livable wage for the important work they do educating and nurturing our youngest citizens, and the second step is to understand how families pay for care.

Fortunately there are some resources we can look to for guidance. The T.E.A.C.H. program, administered by the T.E.A.C.H. National Center, provides support for child care providers who want to access higher education. A related program, WAGE$, is a wage-supplementation program designed to increase quality through higher educational attainment of providers. Both programs depend on significant public and private investment at the state level to achieve the goals of raising quality and establishing compensation parity between early care professionals and kindergarten/elementary educators. Find out what your state is doing to raise workforce compensation and how you can support the effort.

How families pay for child care is the flip side of compensation. With child care nearly as expensive as college tuition, quality care is already out of reach for many low- and middle-income working families. Raising prices enough to elevate wages is not an option, but there are other ways to capitalize the system.

One solution is to infuse more cash into the system by increasing the utilization of the child care subsidy. Eligibility for the subsidy, paid out of a combination of federal Child Care Development Funds (CCDF) and state funds, varies widely by state. The national goal is make subsidies available to families earning up to 85% of the state median income (find your state’s data here), however many states still have a long way to go to meet that goal.

Recently I asked several center directors to calculate the per-child cost of their programs. The results were disheartening. Providers are charging about forty percent of the actual cost of providing high quality care and making up the difference with summer camps for older children, corporate underwriting, and/or fundraising. Given this business model, it’s hard to see how this path could toward increasing workforce compensation and program sustainability without additional inputs.

Shared services is one promising approach to improving child care business practices and cutting administrative costs, thus freeing up time and money to improve program quality and compensation. The state of Texas has a put together an excellent review of how shared services works for child care. Chambers of commerce may be uniquely able to support local shared services initiatives and provide business expertise.

In my conversations with local child care providers, the one question that keeps coming up is why the Chamber doesn’t do more for them, yet few are chamber members. Maybe it’s the cost, or believing that membership is only for big businesses, or simply being too busy, as owner/operators, to participate. Whatever the reason, perhaps it’s time that we do more to reach out with support and encouragement. It will benefit all of us.

For more information feel free to contact Mary Manner

Tags: #Talent, early childhood education

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