Home Business Child care is an industry on the brink

Child care is an industry on the brink

by SuperiorInvest

Running a child care business has long been a very challenging math problem: many providers can barely afford to operate, but many parents can't afford more.

During the pandemic there was temporary relief. The federal government spent $24 billion to keep the industry afloat. Many suppliers received thousands of dollars a month, depending on the size of their businesses, which they used to pay expenses, the largest of which were salaries.

But that funding, which began in April 2021, expired in September. Five months later, the child care business is more precarious than ever.

In addition to the end of monthly checks, supplier costs have risen along with inflation: food, supplies, and liability and property insurance. Rising wages in food service and retail jobs have made it harder to hire child care workers, 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 workers and earn a stable income. Some parents are now turning to care less consistently because they are working from home more often or have found alternative arrangements, such as having relatives or nannies watch the children, during the pandemic.

The result is an industry on the brink, new data shows.

In a survey released Sunday by the National Association for the Education of Young Children, more than half of 3,815 daycare owners or directors said they were enrolling fewer children than they were licensed. It was mainly due to staff shortages; They said they couldn't pay their workers more because parents couldn't 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 knew of at least one program in their community that had closed since the expiration of federal funding.

Many parents are feeling the stress of rising costs and decreasing availability. On average, according to a recent survey by Care.com, they spend a quarter of their income on child care; The Department of Health and Human Services says that for child care to be affordable, it should cost no more than 7 percent of a family's income. Most said enrollment had increased and wait lists had increased since pandemic funds expired.

Some parents have tapped into their savings or taken on extra jobs to pay for care. Others have asked family or friends to help care for their children, or have reduced their work hours to do so.

“As these funds disappear, it just pushes programs that were barely holding together to the brink of unsustainability,” said Elizabeth Ananat, an economist at Barnard College.

The Biden administration has asked Congress for $16 billion for a year of additional funding for child care, and a group of Democratic senators have supported it, although it is unlikely to get the Republican approval needed to pass.

Meanwhile, some states, including some led by Republicans, have invested state funds to make up for the loss of federal funds. For example, Vermont will spend $125 million a year to expand subsidy eligibility for low-income families, and Kentucky has spent $50 million on grants since federal funds expired.

That's not enough, said Sondra Goldschein, executive director of the Campaign for a Family-Friendly Economy political action committee, which is spending $40 million to support President Biden and Democratic candidates who support child care. “We want child care to be considered permanent infrastructure and we have sustained substantial investment in the sector at the federal level,” she said.

Subsidizing child care for most providers, as the government did during the pandemic, or for most families, as the Biden administration failed to do in its social spending bill, is politically unlikely. Republicans did not support the bill's family-friendly policies, including heavily subsidized child care and universal preschool.

But both parties have supported other ideas. One is to increase block grant funding that helps low-income families pay for child care. It received an additional $15 billion during the pandemic, but that funding expires this fall, and before that expansion, it served only 14 percent of eligible families. Another is to offer employers tax breaks or other incentives to help their employees pay for child care.

Policies aimed at low-income families and focused on how child care benefits employers are more likely to get bipartisan agreement, said Patrick Murray, vice president of government affairs at KinderCare, a chain of 2,300 child care centers, who worked on the block grant as a political advisor to former Tennessee Republican Sen. Lamar Alexander.

This year has been the most challenging in three decades for Rebecca Davis, who runs a center in Arkansas from her home in the Little Rock area.

I used to babysit children ages six weeks old until they could enter kindergarten, but since the pandemic the turnover has been higher. Taxes are owed on the pandemic grant money.

However, he cannot increase tuition: “It's a dead end: I would love to be able to give my employees a stipend or an increase in their hourly wages, but I can't because the cost of everything has gone up and parents just can't pay”.

After her expenses (payroll, utilities, mortgage payments, food and supplies), Ms. Davis's take-home pay is typically around $2 an hour.

“She doesn't make a living babysitting,” she said. “Why do I do 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. She 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 attendance and staff shortages.

With the imminent expiration of federal funding, Ms. Hunter closed her center.

“It's heartbreaking that all the energy and effort I've had over the last 15 years, the services provided in my community, are gone,” he said. “I'm thinking about the children who are now going to be forgotten.”

She cares for a child at home, before and after school, and works part-time as a therapist. But she would like to return to daycare and he is making plans to reopen.

Source Link

Related Posts