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Granite State Rumblings: The High Cost Of Child Care Hurts Working Families

A new report on the cost of child care was released last week. Child Care Aware of America’s 2014 report, Parents and the High Cost of Child Care, summarizes the cost of child care across the country, examines the importance of child care as a workforce support and as an early learning program, and explores the effect of high costs on families’ child care options. This year’s report continues to expose child care as one of the most significant expenses in a family budget, often exceeding the cost of housing, college tuition, transportation or food.

The high cost of child care can be a crippling burden for families with young children. The Parents and the High Cost of Child Care: 2014 report not only examines the high cost of care, but investigates potential solutions for providing high-quality child care to families who need it at a cost that they can afford.

The following is the report’s Executive Summary. You can download the full report here.

Child Care in America
Nearly 11 million children under the age of five across the nation require child care services each week. High-quality child care not only helps parents to be more productive at work, but also provides benefits to young children, including improving school readiness.

This section details common child care settings, the economic benefits of high- quality child care for parents and their employers, and the developmental and educational benefits of high-quality child care for young children.

Why Child Care Costs Are High
Child care and early education is a labor- intensive industry which leads to high costs for families, despite the fact that child care workers are among the lowest paid professionals nationwide.

This section explores the costs that child care providers bear, including the inputs needed to provide high-quality child care and the necessary state regulations that providers must meet.

Average Cost in the States
The cost of child care varies widely across states, and the cost of living in each state also affects the affordability of child care for families. In order to compare the cost of child care across states, we examine the average cost of care in each state in relation to the state median income for married couples with children and the state median income for single mothers.

Using this method, this section ranks the top ten least affordable states for center-based child care at each age level, including infant care, four-year-old child care, and before and after school care for a school-age child.

Child Care and the Family Budget
Child care costs consume a major portion of family expenses. Average expenses for child care can rival expenses for housing, transportation, and even tuition and fees for public colleges. The high cost of child care can be particularly difficult for low-income families and single parents. Across all 50 states, the cost of center-based infant care averaged over 40 percent of the state median income for single mothers.

In this section, we examine how the cost of child care compares to other family expenses, including housing, transportation, food, and college tuition. Additionally, we examine the high relative cost of child care for families at the poverty level.

Paying for Child Care
Families bear the majority of the burden for child care costs. While some public funding is available for child care, the incomplete patchwork of support often does not provide enough assistance for families, who may opt to place their child in an informal or unlicensed child care setting due to the high cost of high-quality care.

This section details the various sources of child care funding, including families, federal funding, income tax credits, and other sources.

Expanding Access to Quality Affordable Child Care
Funding high-quality child care services is a national concern for government, business leaders, and families alike.

In this section, we explore creative solutions to the high cost of child care, including building an environment for child care providers that encourages and supports high- quality practices and involving businesses in the creation of child care solutions for their employees and communities. The section also details strategies to support individual families in accessing high-quality child care.

Conclusions and Recommendations
Considering the findings of this report, Child Care Aware recommends:

➢    The commencement of a national discussion about the impact of the high cost of child care and the cost of quality in child care. This conversation should explore federal and state options; innovative, low-cost solutions that have shown success; what has worked in other industries; and what models currently exist within communities that have seen success.

➢    Congress require the National Academy of Sciences to produce a study on the true cost of quality child care and to offer recommendations to Congress for financing that supports families in accessing affordable, quality child care.

➢    Congress review and consider what policy options are available to help families offset the rising cost of child care, including, but not limited to raising dependent care limits for deductions or providing additional tax credits for families and providers, creating public- private partnerships, and looking to existing states with successful financing models.

➢    Federal and state governments commit to investing in early care and education programs, especially considering the recent historical progress at the federal level towards ensuring all children in low-income, working families have access to affordable, quality child care.

The full list of recommendations are detailed further in the concluding section of this report.

Growing Up Granite

When I began as a classroom teacher in the field of Early Childhood Education thirty years ago, most teachers at center-based programs were only making minimum wage or slightly above it with little to nothing in the way of benefits. A good portion of the child care workers were also single mothers struggling to get by on meager wages. And turnover was high.

When I became a center director ten years later, little to nothing had changed, except my awareness of this pervasive issue. The desire to increase the wages of staff was hampered by the ability to afford such an increase without increasing the parents’ tuition. But tuition increases first went to operating costs such as oil to heat the building, utility increases, program supplies, and building maintenance and then whatever was left over could go to staff. Usually it was very small if anything at all.

The National Child Care Staffing Study (NCCSS), released in 1989, brought national attention for the first time to poverty-level wages and high turnover among early childhood teaching staff, and to the adverse consequences for children of such staffing instability. In the succeeding 25 years, the national debate about the role of early care and education (ECE) in children’s lives has shifted dramatically—above all, due to a recognition up to the highest levels of government that high-quality early learning boosts children’s school readiness, and constitutes a wise economic investment in the nation’s future.

The Center for the Study of Child Care Employment recently released a follow-up to its National Child Care Staffing Study. Worthy Work, STILL Unlivable Wages: The Early Childhood Workforce 25 Years After the National Child Care Staffing Study compiles evidence from multiple sources to provide a portrait of the early childhood teaching workforce today in comparison to 25 years ago. The report examines trends in center-based teachers’ education, wages and turnover, as well as new evidence examining economic insecurity and use of public benefits among this predominantly female, ethnically diverse workforce.

Inadequate Wages and Wage Structure
Despite a nearly two-fold increase in costs to parents for early childhood services since 1997, according to the U.S. Bureau of Labor Statistics, childcare workers have experienced no increase in real earnings since this time. Those who work as preschool teachers have fared somewhat better; their wages have increased by 15 percent in constant dollars since 1997. And, as was true in 1989, childcare workers still earn less than adults who take care of animals, and barely more than fast food cooks.

Lack of Premium for Educational Attainment
The disparities in wages of early childhood teachers in comparison to teachers of older children and others in the civilian labor force with comparable education are striking – a pattern that has endured over the last 25 years despite increases in earnings for some segments of the early childhood workforce. Preschool teachers with equivalent education earn about 60 percent of what kindergarten teachers earn.

Economic Insecurity
More than 600 center-based teaching staff surveyed in one state expressed worry about their family’s economic well-being, as well as about workplace policies that influenced their earnings. Importantly, these staff, nearly one-half of whom had an associate or higher degree, were employed in a relatively high quality sample of centers that included for-profit, non-profit, Head Start, and public pre-K programs.

Utilization of Public Support
In 2012, nearly one-half (46 percent) of childcare workers, compared to 25 percent of the U.S. workforce, resided in families enrolled in at least one of four public support programs: the Federal Earned Income Tax Credit (EITC); Medicaid and the Children’s Health Insurance Program (CHIP); Supplemental Nutrition Assistance Program (SNAP); and Temporary Assistance for Needy Families (TANF).

Participation rates in public support programs varied little by whether childcare workers were employed full- or part-time, but rates varied considerably by childcare worker wage level. Childcare workers who earned less than the proposed $10.10 federal minimum wage were 1.5 times more likely to reside in families participating in public support programs than were those in which the childcare worker earned more than $10.10 per hour.

At every level of worker education, participation in public support programs was higher for childcare worker families than for the families of all other U.S. workers with comparable education, again revealing the low premium placed on education within this workforce. Participation rates in public support programs were highest among single parent childcare workers and among workers with at least one child under five years old. The estimated cost of reliance on public benefits by child care workers and their families is approximately $ 2.4 billion per year.

These are exciting times for the field as developmental scientists, economists, and business leaders have lent early care and education a prominent position on this landscape in shaping children’s development and, ultimately, the health of the economy.

We are hearing about the importance of early childhood education from the White House to our State House, from economists to CEOs, from government agencies to local agencies, and from parent to parent-to-be.

As the report states in the Executive Summary:

This reality calls for a major restructuring of how we finance and deliver early care and education in the United States. We need, in the words of the 1990s Worthy Wage Campaign, to find a “much better” and “more equitable” way to help parents pay and to attract teachers and help them stay – something that our Department of Defense, a handful of state pre-K programs, and most other industrialized nations, have managed to accomplish. It is our hope that the new evidence reported here will spur the nation to not only aspire to, but to achieve livable, equitable, and dependable wages for early childhood teachers, of whom we expect so much, but to whom we still provide so little.

Image Children in preschool (Flickr US Army)

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About MaryLou Beaver

New Hampshire Campaign Director Every Child Matters Education Fund
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