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Childcare: Low wages and a flawed subsidy system

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Fourth in a series

By DEBORAH E. LANS

GHENT–Childcare advocates agree that the dismal pay and lack of respect accorded child care workers account for the staffing challenges the industry faces. Until those challenges are addressed, capacity will remain inadequate, and parents will struggle to find care for their children, as care facilities remain understaffed and struggle with unmanageable turnover.

The 2024 Pattern for Progress report “Childcare in the Hudson Valley” summarized the situation by saying: “Childcare workers make some of the lowest wages of any service workers in the Hudson Valley, averaging in the low $30,000s per year. Childcare experts said that low pay makes it difficult to recruit childcare workers, contributes to high turnover of staff in childcare centers, and often leads to lagging morale among workers who chose to dedicate their lives to a high and worthy cause – early childhood education.”

Childcare workers, who are overwhelmingly women and are often women of color, earn so little that their families are enrolled in public assistance programs at a rate about 2 1/2 times the national average. Secretary of the Treasury Janet Yellen has said that childcare workers earn in the bottom 2% of all professions. Low wages are a primary cause of a turnover rate that is one of the highest of any industry in the nation, according to a federal Bureau of Labor Statistics analysis.

An article published in late 2023 by the Center for American Progress found something that might seem unthinkable: whereas the post-pandemic tight labor market has lifted wages for many low-paying occupations, like wait staff and short-term substitute teachers, relative to such other job types the childcare sector has in fact become even “less attractive to workers.” In 2021, according to federal statistics, median hourly wages for childcare workers were 106% as much as wait staff and 91% of short-term substitute teachers. By 2022 childcare workers earned 98% of wait staff and 81% of the substitute teachers – substantial relative declines.

While most experts agree that people choose childcare work out of a love for children, the fact remains that “people need a wage on which they can survive,” as Kathy Mabb, who recently retired from provider Columbia Opportunities, puts it. “When workers can’t make ends meet, they are forced to look for jobs outside childcare,” at less rewarding employers like Target and McDonald’s where, ironically, the pay is better.

A 2023 Department of Labor study found that 12% of all childcare workers live below the federal poverty line (versus 5% of workers across all job types). Another study, after noting the link between a teacher’s own well-being and the quality of her interaction with children, found that early childcare givers “struggle with high levels of economic instability, depression, anxiety and stress.”

In addition, childcare work is often not respected as a professional occupation. Even though there are significant credentialing and training requirements for childcare workers, the job is too often still regarded as “babysitting,” as Grace Jacklitch of Family of Woodstock explains. That perspective betrays a misunderstanding. What often looks like simple play with infants and toddlers is in fact the skilled use of books, songs and activities to build vocabulary, inspire a child to talk, explore, question and interact in the kind of “serve and return” exchanges that literally generate synapses and expand brain capacity.

Moreover, Ms. Mabb adds, too often parents whose children are in non-center family care centers (i.e., in-home programs) will prioritize paying other bills, like rent and utilities, over childcare fees when money is tight, knowing that “the babysitter will work with me because she loves my child.”

The high turnover of childcare staff creates its own problems. Experts agree that infants and toddlers learn by interacting with trusted adults. Continuity of care is fundamental to quality of care. Sarah Cote-Bennett, the board chair at the Columbia Children’s Center, watched her own son suffer from the “brutal” workforce turnover at the center, which made it hard for him to establish relationships with his teachers and left him stressed at the end of the day. “He had tantrums and didn’t want to go to the center.” She eventually made the heart-wrenching decision to move him to another care setting where the workforce was more stable. Within two weeks “the tantrums stopped and he couldn’t wait to go to school every morning.” (The Children’s Center has since been able to raise salaries and better stabilize its workforce.)

Chronic understaffing caused by the difficulty of hiring and retaining staff also stresses providers. Anyone working with children knows that, for adults, more colds and mild sickness come with the job. But, as Pattern’s President Adam Bosch puts it, given existing staffing challenges, today “every teacher absence becomes a level 5 emergency.” With mandated staffing ratios for every childcare setting, teacher absences can lead to classroom closures, which in turn send parents scrambling for care and also drain the finances of the providers.

While an obvious answer to workforce issues is to raise wages, the margins at which providers operate are too thin to support meaningful wage increases. Experts in the field and providers had hoped that significant workforce investment would be included in the state’s 2024-5 budget. It was not. Instead, as it did last year, the budget includes a retention bonus pool using left-over pandemic funding.

As Jenn O’Connor of non-profit advocacy group Education Trust-New York (ET-NY) puts it, retention bonuses are “neither a long-term solution nor an investment in childcare. They are a band-aid. Further, no one will stay at a job for the small amount of the bonus. The state needs to think about getting childcare workers to a living wage.”

In addition, in 2023 the retention bonuses were only available to teachers in the classroom, but not to the many others who work in the childcare setting, like administrators, janitors, cafeteria workers. It is not yet known how the 2024 bonuses will be distributed, but they are not expected to provide a solution in any event.

The Empire State Campaign for Child Care, commenting on the 2024-5 budget, like ET-NY lamented the lack of real workforce investment: “one-time ‘bonuses’ or ‘retention grants’ do not create a landscape where professionals can feel confident in this line of work.” A 2023 Harvard Business Review study of retention bonuses in general reached a similar conclusion, finding that there is “no evidence they increase engagement or long-term loyalty.” One human resources expert said of such short-term measures, “It moves the employee/employer relationship away from the ideal partnership state and towards the transactional” and 90% of those receiving bonuses leave anyway.

A significant part of the 2024-5 budget for childcare this year, as last, is dedicated to subsidies to help parents offset the high cost of care. Unfortunately, until capacity is created, subsidies will continue to go largely unspent; if a parent cannot find a licensed childcare slot, cost is irrelevant. Thus, although there is no question that families need help to pay for care, the state’s investment in subsidies (or, childcare assistance, as it has been renamed) largely places the cart before the horse.

The Pattern report documented that in 2022 in Columbia County less than 35% of the available subsidy funds were used. There are several reasons for this, aside from the unavailability of slots, most of which have been inadequately addressed to date.

First, subsidies are linked to specific attendance at a child care program, not to the simple fact of enrollment in a program. Thus, eligibility requires a parent to be working or on a path to work and payment is linked to specific work hours (with a half hour grace period on either side). Thus, care is unavailable for time spent, for example, at doctor’s appointments, shopping or the other necessary tasks of daily life.

In addition, until October 2023, a parent’s absences from work, center closures for holidays or a child’s absence due to illness all resulted in reductions in the subsidy payments. (In October 2023 those attendance-related rules were relaxed, but not eliminated, and now allow for 80 absences per child and 20 program closures for holidays of all kinds.)

The attendance-based requirements are problematic for providers in at least two ways: first, and most importantly, they lead to an unpredictable cash flow that is largely dependent on factors outside the provider’s control, like a child’s illness or family vacations. Second, the requirements burden providers with record-keeping. “Did Johnny come in at 8:15 or 8:30 today? I have to make a note. When did each of the 30 other children come? When did each child leave? Sorry, Mrs. Brown, I can’t talk to you; I need to record when each of these children arrived or is leaving.”

Such requirements make the acceptance of subsidies unattractive; after all, the parents who pay the market rate, can drop off and pick up their child whenever it suits them and the center’s revenue does not fluctuate as a result.

Furthermore, providers report a significant (often several months’ long) lag time between when they file their reports and when subsidy payments ar received, leaving the center to cover the carrying costs of salary, rent, etc.

For these reasons, in Columbia County most centers decline to accept subsidies, leaving the bureaucratic burdens of accessing assistance to parents. Ms. Cote-Bennett said that she believed that in 2023 Columbia Children’s Center was the only day care center accepting subsidies directly; it did so in spite of the logistical complexities because the Center believed that “it was the right thing to do for parents.”

Finally, one result of the lack of capacity in licensed facilities is that families meet their need for care by using unlicensed care. How many such facilities there are, who they employ and what types of care they provide is largely unknown, but the experts at Family of Woodstock believe these facilities are paid market rates by the many parents desperate for the day care that the licensed system cannot provide.

The final article in the series will look at some solutions being proposed to meet the challenges of providing child care.

PULL QUOTE

People need a wage on which they can survive,”

–Kathy Mabb, retired provider, Columbia Opportunities

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