Child Care Crisis – ��

Pumping the Brakes on Private Equity’s Run on Child Care

Rebecca Gale — Mon, 01 Jul 2024 11:00:43 +0000

Rebecca Slaughter has a simple explanation for how private equity affects our economy: “When markets are competitively healthy, they have benefits across the field,” says Slaughter, who serves as a Commissioner for the Federal Trade Commission, the independent government agency that protects the public from deceptive or unfair business practices and from unfair methods of competition. “But too frequently when private equity enters the field, these benefits go down. Profits are extracted, but not distributed through the field. And this is critically bad in a sector that people depend on.”

The sector in discussion is child care, and the discussion focuses on what can happen if private equity firms take over a larger share of the child care market. Slaughter was speaking on a panel at a day-long event in Washington D.C. to mark the by the National Women’s Law Center and Open Markets Institute: “Children Before Profits: Constraining Private Equity Profiteering to Advance Child Care as a Public Good.”��

“The problem is that private equity firms have a traditional playbook, whereby the firms collect the profits, and pass the risk and liabilities back to the companies they’ve taken over. And with the influx of possible public funding, external investors should have guardrails in place to protect the child care industry and the families they serve.”�� — Melissa Boteach, Vice President for Income Security and Child Care/Early Learning, National Women’s Law Center

The concerns about private equity’s influence are well founded. by researchers at Harvard Business School and the University of Chicago found that private equity takeovers result in significant job losses. These firms reduce wages, benefits and staffing at firms they acquire – with devastating consequences to thousands of workers, their families and their entire communities. Private equity funds also should their tactics to maximize profits fail. And for a business like child care, primed to receive a possible influx of federal and state investment, private equity’s interest in the sector is likely to increase.

“The report isn’t anti-private equity, it’s pro-child care,” said Melissa Boteach, vice president for income security and child care/early learning at the National Women’s Law Center and one of the authors of the report. Boteach and her co-author, Audrey Stienon from Open Markets Institute, advocate that child care should be understood as a public good that’s in need of sustained government investment. The report lays out a vision of how a robust child care system would provide universal access to high quality child care with appropriately compensated providers. The goal, says Boteach, is that if private equity firms, or other outside investors, are going to enter the child-care market, they should do so in a way that upholds this vision.

The timing of this report coincides with several states — including , and — instituting record levels of government investment in child care. from the First Five Years Fund also shows strong bipartisan voter support for more child care funding, with 93 percent of voters believing it’s important for working parents of young children to have access to affordable quality child care programs.

Private equity has a history of chasing after industries that receive sustained sources of federal funding. Eileen Applebaum, co-director at the Center for Economic and Policy Research and an , who also served as a panelist at the event, detailed the way in which private equity firms began investing in a substantial share of hospice care services. Much of hospice care is funded by Medicare, which pays a fixed amount to the hospice agency for each day an eligible Medicare beneficiary is enrolled, regardless of whether the patient receives actual services on a particular day.

Other tactics from the private equity “playbook” as Applebaum discussed, include myriad anti-competitive behaviors, including consolidation, creating higher debt burdens, cutting labor costs and staff benefits, and enacting policies that maximize short-term profits to the private equity fund while passing on the liabilities and burdens to the individual companies they’d invested in. Applebaum points to the wide discrepancies in profits and patient care for hospice services: profit margins for a nonprofit hospice provider were around 4-5%, and for those owned by private equity firms, it was 19 percent. Nonprofits are more likely to use funds to invest in staffing and the business, debt-financed acquisitions to restructure these companies to maximize their profit margins, and try to sell them to the highest bidder within three to five years.

In the case of hospice, Applebaum that private equity hospice providers have higher rates of neglect, low staffing and are more likely to pass on the higher costs to patients and families.

Child care is in a unique position of being primarily a small business industry, with low profit margins yet with high demand because it is a necessity for many Americans to go to work and for the economy to function. “A textbook example of a broken market” is how Treasury Secretary Janet Yellin in the United States. Yet if a child care center is forced to declare bankruptcy, the private equity company may still see a high return on the investment, even though the individual businesses may have shuttered, and the communities that rely on such child care centers may no longer have a viable option.

Boteach emphasized that the presence of private equity and the private sector itself is not problematic – and that the existence of more child care options with high quality care can be a profitable industry if sufficient government funding is provided. Often the individual child care centers are owned by women, many of them Black and brown, with strong ties to the communities they serve. Making such industries profitable so that they can pay their employees a living wage is a noble goal, she said. “The problem,” Boteach explains, “is that private equity firms have a traditional playbook, whereby the firms collect the profits and pass the risk and liabilities back to the companies they’ve taken over. And with the influx of possible public funding, external investors should have guardrails in place to protect the child care industry and the families they serve.”

The report is coming out at a moment in which private equity is poised to enter the child care market, but it is “not yet entrenched,” said Audrey Stienon of Open Markets Institute, and the report’s co-author. “It is possible to get ahead of the problem and change patterns.”

Experts encouraged action to counter the threats of private equity takeover. This can be done at both the state and federal level, though guardrails surrounding government funding.��Examples cited included to create standards and restrict profit for for-profit preschools that receive state funding. In Massachusetts, efforts are underway to limit the amount of state funding any larger company can receive. And for an industry like child care, which many families rely on for their own work, there is potential for real momentum in organizing parents to insist on such accountability measures for the involvement of outside investment groups like private equity. And as Rebecca Slaughter told the group, they need to bring such examples of poor conduct to the attention of the FTC. “I can’t solve a problem if I don’t know about it,” she said.

Child care may have a constituency that is primed to be vocal proponents. “Parents of children are a really good group of people to organize,” said Eileen Applebaum.�� “You have to let them know that they are not alone.”

Opinion: If Only Child Care Costs Were Transparent, Searches Would Be Simpler and Easier

Haley Swenson — Thu, 27 Jun 2024 11:00:05 +0000

In the midst of my search for a new child care provider for my one-year-old, I’ve braced myself for the hard numbers. In the United States, the cost of child care has soared to record-breaking highs, rising at more than . One study found that the average cost of child care for two children in all fifty states. For infant care, which we’ll need, the than for toddlers and older kids, since they require more attention and labor. Families that use more than 20 hours of child care per month are paying on average

It’s been a years-long search for the right care provider, starting from the earliest days of my pregnancy. We talked to neighbors and friends about their child care experiences. There have been never-ending online searches, writing down the names of centers we see driving around town so we can look up reviews about them later, noting the names and numbers of providers that parents we meet at the library or the splash pad have liked to find out if they have openings.

I expected “sticker shock.” What I didn’t expect is needing to go on a virtual scavenger hunt to find even basic pricing information from the providers of interest.

Where my family lives in Southern Utah, there are just four child care providers listed on Winnie, a free database for parents to search for care providers in their area, with pages providers can claim and update with details about their offerings at no cost (providers can pay to upgrade their pages to contain more features and to show up higher in search results). Not one of the providers in my town lists the cost of care on their Winnie page. In St. George, the larger city next to us, 26 providers appear in a search, with just 2 listing their prices. One provider’s Winnie page lists its price as a huge range, between $450-$750 a month, which at least helped me to get some ballpark sense of cost. Unfortunately, in lieu of a price or a price range, most providers’ pages say simply, “Contact this provider to inquire about prices and availability.” My wife and I have emailed providers and left voicemails. Usually, we don’t hear back at all. It’s hard to make an educated decision when you don’t have all the information in front of you.

“I realized that what frustrates me most about our child care search isn’t just the lack of numbers. It was the way this whole experience seemed to disregard the humanity of everyone involved. We’ve been forced to play a shell game in a process that is ultimately about the care and education of our baby, a subject about which we could not feel more tender and vulnerable.”
Haley Swenson

Until you’ve been in a child care search, you may not fully appreciate just how frustrating it is to not readily find price tags for what will be one of your family’s greatest expenses and most important decisions. One way to test Treasury Secretary is to ask how you would react if something common in the child care sector were to take place in another equally vital industry, say in the search for a new vehicle.

Imagine walking around a car lot, looking for your family’s next sedan. Buying a car is critical to your ability to get to work, to earn a living, to your family’s livelihood. You need a car. You spot a couple options that look like the right size and style for your family. But instead of seeing a price painted on the windshield, you see the phrase: “Inquire for pricing.” You go online to the automakers’ website and read a full sales pitch about the make and model of the cars of interest. They’re perfect. But can you afford it? Who knows? Finally, you contact the car dealership. A few days pass before you hear back from a sales person who says they’ll walk you through the price of the cars when you come for a tour and test drive. After all this effort and taking time out of your schedule to visit the dealership, you finally see the price tag, only to realize you cannot afford the car you liked so much. This is often the experience of families searching for child care in America, where public funding is scant.

One of the many problems with child care as a private market is that providers, especially the largest ones with the most funding behind them, have far more power than the families they’re serving. Demand for high quality early care and education far exceeds supply, which means families are competing for much-coveted openings. For many families, child care is a necessity, critical to their ability to earn a living; and good, reliable child care is such a rarity that most families will feel forced to pay whatever the cost. But some families simply cannot, and there are increasingly stark divides between higher income families who can access paid child care services, and lower income families who cannot. found that “among parents with younger children, those with higher income were about twice as likely as those with lower or middle income to use 20 or more hours of paid child care per week.” The lack of price transparency in the sector is a sign of a much larger problem with a profit-driven child care system and the way it ends up treating parents and caregivers alike.

Winnie’s CEO Sara Mauskopf says it’s unfortunate that many providers they encourage to update their pages are reluctant to list their prices directly, worrying that the “sticker shock” a parent feels when they see the cost initially will stop them from considering the provider. Mauskopf says the theory is that if you can get a parent in the door of the center and give them the opportunity to “fall in love” with what they see, they’ll be more likely to enroll their child, even if the price is high.

But Mauskopf says that’s a myth. “When it comes to child care,” said Mauskopf, “You know what you can afford and you can’t really stretch much beyond your range. If some place costs twice as much as your range, there’s not really anything you can do to afford it. So, I think that is just the wrong philosophy.”

In fact, internal data analyzed by Winnie suggests that providers who list their price on their Winnie page than those who do not, likely because people are more likely to pursue the provider once they know they can afford it. Mauskopf also says this hide-and-seek pricing model could only ever make sense for big providers, those with staff members who can give tours to prospective parents during the day, and field phone calls from people just inquiring about prices.

KinderCare, for instance, is the in the United States. Its is bright, inviting and laden with information on their approach to safety, care and education. But nowhere on the website are specific numbers about costs. Even on the individual web pages for specific KinderCare locations, like , which includes a button that says, “Tuition and Openings,” no actual tuition information appears.

I reached out to both KinderCare and another large provider, Bright Horizons, to ask why they don’t include pricing information on their websites, but they did not respond.

Mauskopf said not all providers approach pricing this way. Home-based providers or small center-based providers are less inclined to see the lack of price transparency as a strategic, marketing decision. They already have staff wearing multiple hats, acting both as teachers and as administrators. Needing to also act as tour guides and sales people to families who may not even have the budget to cover tuition is wasted time they can’t afford. For them, the bigger problem with listing their prices may be the burden of updating a website with their costs or even having a web presence to begin with. For most child care providers, whose labor and infrastructure costs alone are incredibly high, margins are too tight to afford a robust marketing team, or even a team that can stay in contact with the host of child care databases like Winnie about their prices and openings.

Dana Levin-Robinson started her company UpFront in 2020 to tackle this problem, as well as a host of problems with transparency in child care. She says private databases like Winnie are at a disadvantage when it comes to getting up-to-date pricing information from providers, simply because it’s hard to get their time and attention when they have so much else going on. She says individual consumers and private companies are both unlikely to have the leverage they need to get providers to share their data and to update it regularly.

Unlike private websites, resource and referral agencies have leverage. Government-operated resource and referral networks contract with UpFront to create user-friendly databases with search filters parents can use to find child care that truly works for them. They not only play a role in licensing providers, but they also connect providers in their networks with publicly funded resources and support. Additionally, Levin-Robinson has found, reaching out with clear, simple asks to providers makes the work of updating information much easier. Instead of emailing a contact with a list of required data fields, Levin-Robinson says, they’ve had more success by being very specific and very simple, asking something like, “You previously listed your price for infant care as $300 a week. Is that the same or has it changed?”

One of UpFront’s clients, the , has pricing data for 4,567 out of 6,256 providers they work with, an astonishing 72 percent of providers. Families looking for child care can search for providers in their area using dozens of different search fields and filters, to almost learn instantly who would and would not work for their family and their budget.

Ultimately, Levin-Robinson suggests, these resource and referral agencies would have even more leverage if transparency about pricing and regular updates a requirement for state licensing and renewal were, something state legislatures could consider enacting. I’d be relieved if my state had information as robust as Maryland’s available with the click of my computer mouse. But ultimately, price transparency is the tip of the iceberg in the ways the child care market has failed American families.

Last week, I sent a desperate, terse website inquiry to a center ten minutes from my house that didn’t list their price online but did offer me the chance to fill out an application that asked me to agree to a particular pay schedule before I even knew if I could afford it. “I’m wondering the price of care for a 15-month-old to see if it’s in my budget. Could you send your cost information?” I wrote. To my surprise Karen, the center’s director, emailed me back within 24 hours. She answered my question directly — $80 a day or $260 a week — and said they had an opening three days a week for a one-year-old. If the price worked for my family — it was steep but no worse than we’d been anticipating — she said she’d be happy to give us a tour and answer any other questions we had.

A few days later, we went for our tour and fell in love with the child care center, something I’d begun to think would never happen. It was the facilities, the teachers, the way even the director and assistant director knew the names of every kid in their care, the way they spoke to us and took our questions seriously, and the environment of play and learning we saw as we poked our heads into each classroom.

I realized that what frustrates me most about our child care search isn’t just the lack of numbers. It was the way this whole experience seemed to disregard the humanity of everyone involved. We’ve been forced to play a shell game in a process that is ultimately about the care and education of our baby, a subject about which we could not feel more tender and vulnerable. Meanwhile, caregivers are attempting to give their time and attention to our children, while also being asked to manage websites, tight budgets, grants and licensing, facilities maintenance and marketing strategies.

If a country truly invested in the care and education of young children — rather than leaving it to the private market and overstretched, overworked parents — child care pricing would not only be transparent, but simple and affordable. It would be abundant and easy to access in every neighborhood. Perhaps I could have saved myself the dozens and dozens of hours I have spent looking for child care since before my son was even born. With publicly funded child care, we could invest what amounts to a huge portion of our income we currently spend on child care in our son’s future. Maybe my stress levels would be lower and my health and happiness higher if figuring all this out and making it work weren’t constantly on my mind.

Maybe the teachers and caregivers who have dedicated their lives to this work would be paid what they deserve for caring for our communities’ youngest human beings and the parents who have entrusted them with their lives and development. Maybe we could all focus, first and foremost, on people.

Private Equity Is Coming for Child Care. What Does That Mean?

Rebecca Gale — Tue, 14 May 2024 11:00:37 +0000

I’ve had the privilege of working with Elliot Haspel and reading his work on child care since I began reporting on this topic in earnest, nearly four years ago. There are few reporters on this issue that understand the nuances and complexities surrounding the child care economy as Elliot does, and he also brings a deep level of compassion in shaping his opinions on how to improve the care space – both for the families that rely on care and the workers who deliver it.

So when Elliot approached me about the he was working on regarding the role private equity plays in shaping the child care industry, I knew he was on to something. What followed was a deeply reported, thoroughly investigated and meticulously fact-checked piece which ran on Early Learning Nation in April.

To follow up, Elliot and I recently conducted a fireside chat webinar, again hosted by Early Learning Nation, in which he had a chance to explain his findings and outline his vision for a potential way forward.

What follows is a condensed and edited version of our Q+A.

Rebecca Gale: Elliot, many of us know that you are a prolific writer, but a piece of investigative journalism like this is different from your normal byline articles. Could you tell us a bit about how and why you decided to pursue this topic on child care and private equity, and what your process has been to conduct such research and digging, and the sense of fact checking for such a piece?

Elliot Haspel: Back in 2022 when many of the pandemic effects on the child care system were still raging acutely, I started to see a couple of headlines pop up about some of the large corporate chains acquiring sites and continuing to grow.��I sort of figured in my mind this question of well, there always seems to be a 2-tier system where the chains are having a different experience than everyone else.

And when you start looking into it, you start to realize interesting things. Eight of the 11 largest chains by capacity are owned by private equity firms. And a ninth used to be run by a private equity firm and is now publicly traded on the stock market.��And that’s a fascinating feature that almost no one was really talking about.

So I published a with some information about that.��And then the next month in December, 2022, the looking at private equity and child care, and also revealing for the first time some information about the political activity of those chains when it came to the efforts to improve the child care system.

But there were more questions here. How were these chains making money? What does this mean for parents, for educators and for kids on the ground in a very real way?

It took me about six months to research and write this piece for Early Learning Nation, with a combination of using all my networks to try to identify folks who were current or former employees of private equity-owned companies and were willing to speak, looking at financial records, legal filings and just compiling all of that.

We engaged an independent experienced fact checker to vet it and an editor who had experience doing investigative pieces like this.

We really took this through a lot of different iterations to make sure that what we finally published was something that we feel proud of and can stand behind.

RG: One thing I admired about your piece is that it included a bit of something I called private equity 101, explaining how these firms work and how they can make a lot of profit in the short term in industries that are not usually considered very profitable, like child care specifically. And yet they do make money. One of the lines that stuck out to me is that private equity firms, and I’m quoting this, “Don’t need to serve the whole market. They only need to serve the profitable parts of the market.” Can you walk us through what that looks like?

EH: The number one question I get when I talk about this is: why is private equity even interested in child care? All we hear about is how financially difficult child care is as a sector. Programs can barely keep the lights on and educators are getting paid next to nothing. It’s incredibly expensive for parents. So, who is possibly making money off this?

What I found is there’s a playbook that’s worked in many other sectors for private equity, including nursing homes, autism services and prison services. The playbook shows five main ways that these companies are making enough money to return the profit private equity firms are looking for, which according to The New York Times can be up to 15% to 20% profit margins.

The first one is targeting an affluent clientele. These chains tend to want to serve middle, upper-middle and truly affluent families, then they charge them a lot.

Second, there is a real push to maximize enrollment because in this country we treat child care much more like a private market good, right? So, the number of enrolled families you have is the amount of revenue — that’s the multiplier to the amount of revenue that you’re getting. There’s lots of pressure to always keep enrollment as high as possible.

And you can lower your operational costs as much as possible. These chains don’t tend to pay their employees considerably better than the ones that aren’t making this kind of profit.��I found in some cases teachers were asked to basically reduce the number of sheets of paper per day they were giving kids, and chains were shifting daily cleaning responsibilities from outside companies to teachers.

A third way is you can engage with institutions. Corporations, public, local and state governments, and universities and colleges are all clients that tend to work with these large chains when they’re providing onsite child care for their employees.

A fourth way to make money is real estate. For many child care programs, one of the best financial assets they have is owning their building. And the common private equity tactic is to have the child care center sell off their property. But the proceeds of that sale do not generally go back to the site; they generally go up to the private equity firm so now the site must lease back the property previously owned. The center now has a line of debt that it must pay, which can be more than a mortgage.

The fifth way, which is really constrained just to the franchise chains, are the ones that require franchise fees and royalties.

So, when you combine this basket of different profit-making strategies, you can start to see, okay, there actually is a path to making profit in child care. But that’s not one that tends to be pursued by independent community-based programs.

RG: One quote from Elizabeth Leiwant from Neighborhood Villages asks, “how would you feel if I told you that Morgan Stanley owns your child’s elementary school?” And when I read this, I actually laughed out loud because we have this expectation in our country that elementary school is not up for profit sharing. So why do you think elementary and secondary education is treated very differently than early education?

EH: We have a history in this country of treating child care as a market good, especially since the 1970s. For-profit child care started to kick up in the late 1960s when we started to see an increasing number of middle-class white mothers entering the workforce. Previously there had always been some mothers who worked but predominantly those had been mothers of color or poor mothers. In 1971, you know, Richard Nixon vetoed the Comprehensive Child Development Act that would have created a nationally funded, locally run system of child care programs.

But there is a massive need for child care. If you look at the graph of women’s labor force participation starting in the late sixties, going through the 1970s and 1980s it’s almost a straight line up. So, you can understand how an entrepreneur — someone looking to make money — would be like “sure, I’m going to start offering some sort of for-profit child care” because at that moment unlike other countries, the United States decided to say, we’re going to push this into the market. We’re not going to invest enough public money to create a functional publicly funded system. We’re still dealing with that legacy today. So, it is a real discontinuity when you think about all the reasons we have public schools, right?

RG: You mentioned that as private equity gains a larger share of the child care industry, their political influence will grow. One example you gave was the opposition to Build Back Better by the Early Care and Education Consortium (ECEC). How do you see the role of such political interests evolving as private equity gains a stronger foothold in the child care industry?

EH: Yeah, absolutely. I think the broader point you’re getting at is: is there an inherent conflict of interest? If we put in hundreds of billions of dollars to create a publicly funded child care system where parent fees are significantly reduced — if not making it entirely free for everyone like our public schools — but the tradeoff is that there are conditions that restrict profit, what will private equity-backed chains do?

Build Back Better did have mandatory caps on parent fees and living wage minimums for educators. And according to the New York Times, we saw the Early Care and Education Consortium, an advocacy and lobbying group that represents many of the large chains, working behind the scenes with Senator Manchin to lobby against the bill.

And then the month after Senator Manchin kills Build Back Better, executives for many of these chains provided donations to his campaign PAC.

Also, we recently saw the Massachusetts Senate passing a bill that involves quite a lot of public money — $475 million a year in grants to help child care programs—to keep their operations going… and pay their staff better. But they put some guardrails in place. They say, if you have more than 10 sites in Massachusetts, you must agree to certain conditions that include things like accepting a reasonable number of children who are on subsidy, which is a proxy for lower income children. You must agree to use a certain percentage of the grants to pay your educators better and to follow a wage ladder that’s going to be put in place. You must agree to a certain number of financial disclosures with all strings attached, right?

We found that ECEC quietly tried to get those particular provisions stripped out. They sent a letter to the chair and vice chair of the committee asking them to amend the provisions that would have targeted the larger chains.

The concern here is that economic power often equals political power, and private equity is enormously powerful politically. I have a quote in there from Brendan Ballou, who’s the former U.S. Special Counsel for Private Equity at the Department of Justice, that “Congress works for few constituencies harder than they work for private equity.”

RG: You mentioned that private equity groups are focused on expanding child care for middle- and upper-class families because these families can theoretically pay more. One of the solutions that you’ve discussed is increasing the subsidy rates.�� Some states are already doing this through the pandemic era funding they receive for child care. Can you walk us through how increasing the subsidy rates for child care providers changes the calculus?

EH: One thing that is clear from private equity’s work in other sectors is that they really love a steady source of government money. There is a reason private equity firms own most of the companies that deal with prison food and prison phone calls — they get money for those sorts of things. It’s the same reason they want to be in health care — there’s Medicare and Medicaid dollars available.

Public money is a reliable, predictable source of money. In child care, the subsidy reimbursement rate is set so that the government will pay that program $X for each child. In most states and for most of the past several decades, that reimbursement rate has been pretty low.

The target that the federal government sets for states until recently was 75% of market rate. Market rate is based on what people are currently paying, which as we know is actually less than the true cost of care. So, we’re already at an already artificially depressed market rate (75% of that) and many states aren’t even at 75%. And it’s not that much money per child. Compare that to a full-pay parent, right?

As the subsidies start going up and as more places start to receive the true cost of care, I would argue that would likely incentivize some of these chains that are only serving upper- and middle-class families to come down into the subsidy market and start to try to capture those dollars.

RG: One way that the large chains could help us with that compensation is their ability to provide health insurance and other fringe benefits that many independent and nonprofit programs are unable to offer. Particularly in places where they don’t have programs like paid family leave at the state level, these child care providers can’t afford to do that. In your research has the involvement of larger child care chains meant higher or more stable wages for staff?

EH: I’ve not seen substantially higher wages looking from what analysis I can do, including looking at states where they must publish salary ranges. They seem to be about on par with the small independent and nonprofit community-based programs. Many chains will offer benefits, like health insurance, which as you say the others are not able to do.

I want to put a fine point on something because I think these conversations can get a little bit fraught. What I’m talking about in this article is about management and corporate decision making. I am not talking about the front-line educators and directors at these sites. They are working just as hard, under difficult circumstances, as any other child care educator. And then to this point, they’re not actually getting paid significantly more.

So, the compensation package overall might be slightly better in some of these change sites, but one thing we see, which is interesting, is actually the turnover is much, much higher.

There’s a Department of Health and Human Services study using 2019 data and it found that the rates of what they call high turnover, which means 20% or more of the child- facing staff in a program, leaves over the course of a year. It was nearly 50% among the large for-profit chains that they looked at and even among for-profit independence is quite high as well. This is compared to about 30% for the nonprofit and government programs of school-based pre-k, Head Start, things like that.

That is an enormously high turnover rate, which when you think about everything we know about child development and the importance of reliable, consistent, stable caregivers, is not great for the children either.

What that tells me is that a slightly better compensation package is not outweighing some issue going on with working conditions. And it’s causing the educators at these chain sites to turn over at just a really alarmingly high rate.

RG: There’s a quote from Melissa Boteach at the National Women’s Law Center, where she basically asked: “Do we want private equity and a heavily financialized model focused on short-term profit to be the appropriate model for child care?” Is child care really a public good or is it up to individuals? If you and I revisit this conversation in a few years, there would be different expectations on how child care should be treated and therefore what role public equity would play.

EH: We’re at a really interesting hinge point. It’s hard for me to predict because there are multiple kinds of paths we could go down. Most parents don’t know that a private equity firm owns their child care provider.

I do think there’s a question about what decisions policy makers make because if there are no guardrails put up and there’s more public money flowing, we are going to start to see increasing capture by private equity firms.

We are at a point now where private equity and investors together have captured about 10 to 12% of the licensed child care market. That’s large but not dominant yet. If that gets up over the next couple of years, to 20 or 30%, it’s going to be incredibly difficult to do anything.

Maybe it’s naive of me to say in 2024 America, but I don’t think this needs to be a partisan issue. I don’t think anyone in red states, blue states, small towns, large cities, are going to be comfortable when they start getting really deep into the implications of having private equity firms making decisions about what’s going on in programs that serve infants and toddlers. That’s the first step — we need to be able to talk about this with each other.

On the Other Side of the Child Care Cliff, Over 1,000 Providers Stage One-Day Strike for A Day Without Child Care

Bryce Covert — Mon, 13 May 2024 15:29:54 +0000

Terri Simms has run her child care business, known as Playtime Nursery School, in Dayton, Ohio for over 27 years. She was forced to shut down for three months in the early days of the pandemic for safety reasons, but today she’s shutting her program down for the day out of protest.

In the early days her business was sustainable and Simms was able to pay her teachers reasonably well. Then in about 2009, Ohio started steadily reducing reimbursement rates for families who get subsidies, and increased quality rating requirements. Today the state has the country’s reimbursement formula. It also pays providers based on attendance, not enrollment, which means that if a kid is out sick she loses money despite keeping the spot open for that family. Simms only has one family that pays completely out of pocket; nearly all of her other children receive government subsidies.

“I’m working now in the negative,” Simms said. It costs her somewhere between $470 to $500 a week to care for an infant, but she’s only reimbursed $375 by the state. “That’s not no money,” she said. But her parents can’t make up the difference, so she has to take it out of her teachers’ pay. “I’ve got some dedicated, loving, caring, outstanding teachers who come to work every day,” she said. “I can’t pay my teachers what they’re worth.”

That changed briefly after the American Rescue Plan was passed, which spent $39 billion on propping up the struggling child care sector, the amount of funding the industry has ever received. Simms used the money she received to give her teachers bonuses knowing that it would someday run out. Run out it did—the money to states this past September. Simms’s bonuses are no more. One of her teacher’s electricity recently got turned off because she couldn’t afford to pay the bill. Another had to move houses into something less expensive because she couldn’t afford where she was living.

Community Change

That’s why on May 13—today—she’s joining 1,080 other child care providers across the country who will be closing their doors and calling out to demand more funding for child care. They’re taking part in the third annual Day Without Child Care, and this year a record-breaking number of providers are shutting down. The event comes after the so-called “child care cliff,” when federal pandemic relief money for the sector has almost completely dried up. In a January survey, of providers knew of at least one program that had closed in their community over the previous six months, and about half said they had to increase tuition.

Providers who close down today will hold 84 events across 26 states to demand the government pay them better, make care more affordable for families, include gender and racial justice in the system, and expand the Child Tax Credit. That last demand is new this year and inspired by the experience of 2021, when the government increased the amount of the benefit and gave it to more families, cutting the child poverty rate in . Expanding it again “would help us build a solid foundation for all of our children who all deserve an equal opportunity to thrive,” Dorian Warren, co-president of Community Change, which is organizing the Day Without Child Care, said on a press call last week.

The day of action will also focus on Republican lawmakers who have refused to pass more child care funding; along with two conservative Democratic members of congress, who stood in lockstep against President Biden’s Build Back Better legislative package that had in child care. Republican’s refusal to pass more funding for the sector is “pushing our system to the brink of collapse once again,” Warren said. “Time is running out.”

The lapse in federal funding, without anything else coming now that it’s gone, has put many child care providers in a bind. Johnny Anderson, who owns the largest family-owned child care company in Utah and shut down all of his 16 centers on Monday, said his state required providers to pay teachers at least $15 an hour when they got relief money. “We were obviously happy to do it, because we wanted to pay teachers more, and the grant gave us the ability to afford that,” he said on the press call. But that money will run out entirely at the end of the summer. Without more government funding, providers like him can only maintain that level of pay for teachers by raising prices for families, who are already struggling to afford care. “It’s a recipe for disaster,” he said. The result, he said, is providers forced to close their doors permanently.

Some states have from the cliff, finding their own sources of funding to fill the gaps. In those states, there was in how many parents lost access to child care, compared to nearly a quarter in states that didn’t provide their own funds. Utah is one of those that hasn’t put more money into the sector. “Utah’s a conservative state,” Anderson noted. “We have been unsuccessful.”

“Shutting down on the Day Without Child Care is a glimpse of the permanent closures that might happen in our communities if we don’t take action,” Warren said. “We know our system is in crisis and we also know it does not have to be this way.”

This is the first year that Simms will be shutting her program down as part of the Day Without Child Care. “I decided to shut down for the same reason that Rosa Parks refused to stand up. Enough is enough,” she said. “I’m a business. Pay me what I’m worth.” Her teachers and parents are completely behind her, she said, and they’ll be going with her to the capitol for a protest as part of the day’s actions.

One of the people she serves is Rose Elheazy. Last year Elheazy got a call from her grandchildren’s other grandmother saying her daughter had died and her grandchildren—ages 18 months, four, eight and 12—were in custody of the state. She needed someone to take them so they could go to their mother’s funeral. Eventually it turned out that no one could take the children in full time, and Elheazy made the difficult decision to take them in herself so they could be close to family members.

Community Change

Her decision came with a lot of hardship. At first she didn’t get any public benefits to help care for the kids, and Elheazy can’t work due to a shoulder injury she sustained on the job four years ago. She had been living on workers comp payments and taking care of her elderly mother 24 hours a day, seven days a week while also going to physical therapy appointments for her shoulder. She didn’t have enough resources to feed the kids, let alone the time to care for the ones too young for school during the day. She was in a “really bad, broken situation,” she said.

Then she got in touch with Simms, who connected her to a state program that allowed Elheazy to send the two youngest to Playtime Nursery School for free. “I didn’t always have breakfast,” Elheazy said, but “I knew the kids could go to the center and she would make sure they got something to eat.” Simms has given the children clothing. When Elheazy has had to take her mother to the hospital in a medical emergency, Simms has taken care of the kids so she didn’t have to worry.

“She has just always been there for a great support,” Elheazy said. Simms has of course taught the children important educational skills. But Elheazy now sees child care as far more than that. “I don’t think they get the credit that they’re due because they do a lot. They form a family. They form a bond with the children and with the parents,” she said.

Going without the center’s help on Monday while Simms is shut down won’t be easy for Elheazy. She’s had to cancel all of her appointments and do nothing but care for her kids. But she still supports Simms’s decision. “I am all for them closing down for a day to say, ‘Hey, we’re going to close down because this is what we need, we’re not getting what we need. Y’all need to listen to us, y’all need to hear us,’” she said. “If it means them getting their voices heard then I’m all for it, because I can’t imagine one day without the center, let alone weeks or months.” She knows that if the center were to have to shut down for good she would be far worse off. She wouldn’t have a way to give the kids breakfast or even the time to go to the grocery store. She would have to miss her appointments to take care of her shoulder. And, without the time to care for her mother, she thinks she’d have to put her in a nursing facility.

“I don’t know what the world would be like without the center,” she said.

Simms has served many people like Elheazy and her family over the decades. She took over the current location of her business from someone who opened it in 1959. Playtime Nursery School is a “pillar of the community,” she said, “that has educated and brought up so many different varieties of children.” Many of the children she serves are second or third generation, with a grandparent, parent, aunt or uncle who went to the same center when they were kids. Some of her students have gone on to be doctors, others police officers. One mother struggled with her son, who had trouble learning, but Simms told her, “He’s smart, he’s a scientist, he’s going to be an engineer, he’s going to do something.” Lo and behold, today he’s an engineer. “I am able to help many families and many children get their full potential,” Simms said.

But it takes a massive amount of underpaid work. The center serves kids as young as 18 months old to as old as 13 years old. Simms opens her doors at 5:30 to care for children before they go to school, then educates younger kids during the school day, and at the end of the day also has school-aged kids for after school. Without more resources to hire more teachers and staff, Simms takes on multiple roles throughout the day. “I am the administration, I am the school bus driver, I am the preschool lead teacher,” she said. She sometimes arrives at work at 3:30 just to get paperwork done. When she opens her doors she watches the early kids, then after they leave, she oversees the preschool classroom. She then picks kids up from schools at 2:00 and watches them until 5:00. “Sometimes I don’t get home until 10:30 at night because I’m doing administration work,” she said.

“We’re educational programs just like a school district,” Simms said. “Pay us what we’re worth.”

Faith-Based Child Care Activism in Minnesota: Because Kids Count on Us

Mark Swartz — Wed, 08 May 2024 11:00:25 +0000

Advocacy requires patience and persistence. And humility. Sometimes, all the organizing, letters to the editor and congressional testimony fall short. Sometimes, a breakthrough happens, but the time and effort of the people who made it possible get lost in the flurry of attention that follows.

Take Minnesota. The state is investing in child care and early learning in a big way, with more than $300 million in new spending and an additional $252 million for early learning scholarships. Later this year, it will , which will have a thousand employees.

The Minnesota policy breakthrough might not have happened without seven years of patient, persistent advocacy by , a coalition of 500 child care centers and an initiative of , a nonpartisan coalition of faith communities. While members come from different faiths and serve different types of communities, they have come together around common goals.

JaNaé Bates, ISAIAH’s interim co-director, says, “Years of organizing and advocacy paid off. ISAIAH leaders across the state held community conversations, roundtable events and candidate forums around the urgency and necessity to address our child care crisis. Parents, providers and educators organized together to imagine what kind of system is possible for Minnesota and what it would take to make it happen. Then, when Minnesota voters elected a Democratic House, Senate and Governor in November 2022, we were ready.”

Jennifer Wells, director of economic justice at , says, “Child care impacts everyone, no matter what they believe or where they come from. Because of our child care crisis and a lack of federal investment into our child care industry, states are having to get innovative to ensure providers’ doors stay open. Thanks to the power of community organizing, states are providing solutions and creating revenue sources to fund child care. These efforts are models of what we can be doing at the federal level.”

The Makings of a Better Society

Debra Messenger, the office manager of All Ages and Faces Academy in St. Paul and assistant pastor of True Vine New Bethel Baptist Church, has worked in child care for 24 years. She has seen up close how early education does more than get kids ready for kindergarten.

“This is the time of life when they develop the mindset to do their very best,” she explains. “They get that from the environment around them. Like the saying goes, ‘Some things can be taught and other things can be caught.’ And I just think it makes for a better society.”

Before Kids Count on Us, she says, the state’s child care sector lacked cohesion. “We didn’t know who was making the rules or how they came about,” she admits. “It was like floating in a big sea and not seeing where the boats are. But a group of us got together and started going down to the Capitol with our kids.”

Kids Count on Us gradually turned up the pressure and kept making noise so that legislators wouldn’t be able to ignore the issues — most critically, inadequate investment in early care and education.

An Essential Public Service

Emily Northey, Michala Prigge and Celeste Finn at the Minnesota State Capitol for Children’s Advocacy Day

After founding in St. Paul last year, Celeste Finn felt isolated and run down. “I was fighting too many battles every day,” she recalls.

Finn notes that teachers are greatly respected in the Baha’i Faith. Service to the community is also prioritized, which is what led her to activism, but the stress of starting and made it hard to find her voice. It didn’t help that family and friends doubted her career choice, telling her it wasn’t important enough, that it wasn’t even a respectable profession.

“But the research cemented what my heart was telling me,” she says. “If you want to make an impact on children’s lives, you need to work with them when they’re younger. That’s when the prefrontal cortex is developing and when their values and biases are developing — which is why child care deserves funding. It’s an essential public service.”

Finn discovered Kids Count on Us on Facebook. “So now instead of me having to do all this research and find all the bills, I have a framework to make it so much easier. Having a group like this is a salve. It’s a balm. It helps make me feel a little less alone, like change is possible.”

Bread and Peanut Butter

Messenger is happy about the policy wins, but she’s not content yet. There’s still a shortage of early educators in and around Minneapolis-St. Paul. “Right now,” she says, “They’re opening up a whole bunch of spots for children to get into, but without the workers, it’s like having bread but no peanut butter.”

She’s also concerned about regulations that impede entrepreneurship. “These rules that might look good on paper,” she contends, “but they take the joy and passion out of working with children. You’re scared to sneeze too loud because it might be against a statute.”

ISAIAH’s Bates sums up, “What we achieved during the 2023 legislative session for child care (and many other issues) did two really important things. First, Minnesotans across race, gender and background won policies that will materially and significantly improve their lives and well-being.�� And just as important, it demonstrated again that organizing works and unlocks even more possibilities for what Minnesotan families can have going forward. We’re already seeing that virtuous cycle unfold right now.”

Why is Child Care So Expensive? What We Can Do About It.

Rebecca Gale and Dianne Kirsch — Wed, 01 May 2024 11:00:30 +0000

Support for this project was provided by .

Opinion: ‘The End User Is a Dollar Sign, It’s Not a Child’

Elliot Haspel — Mon, 22 Apr 2024 19:44:34 +0000

Editor’s note: Elliot Haspel is a child care policy expert and author, as well as a freelance journalist and opinion writer who has published stories with The Atlantic, The New York Times, and The Washington Post (among others). He has an in child care which leans toward skepticism, and he has also on the subject. As such, this article should be considered “reported opinion.” It should also be noted that this piece has been thoroughly vetted by an experienced, independent fact checker. This piece and all opinions therein are Haspel’s alone, written in his capacity as a freelancer, and do not necessarily reflect the views of zero2eight.

Introduction

In January 2024, the Yale New Haven Hospital system (YNHH) announced a change at the two child care centers they run for employees and community members. , YNHH would no longer operate the centers themselves but were instead entering into a “partnership with Bright Horizons,” the second-largest U.S. corporate chain and the only one traded on the stock market. The Daily News reports that, “Without advance warning, day care educators were told to reapply for their current positions. In response, many employees have since left, leaving the center short-staffed and at risk of state closure.” A parent who attended a call with YNHH leadership reported the leaders “told them that the hospital was losing money on the day care and had been looking for ways to cut costs. As a result … the hospital had zeroed in on no longer managing the day care.”

The question of how allowing Bright Horizons to take over the centers would cut costs — while still making Bright Horizons a profit — is becoming apparent: the company has moved to alter employee benefits and increase classroom group sizes. In addition to requiring long-tenured educators to reapply for their jobs, the Daily News reports leadership told staff that “during the rehiring process … the staff members would lose their YNHH benefits and paid time off.” Moreover, “center leaders gave parents flyers informing them that some of the day care’s infant rooms would be combined. [Parent Jon West] told the News that each classroom previously had three teachers for every six to seven kids. Now, there are two to three teachers for every eight kids. Parents also described how the facility’s receptionist and the day care supervisors were also taking on educator roles to meet the state educator-to-student threshold.”

Cast in America as a pay-to-play system with limited public funding, child care has long struggled with like difficult budgetary math, low educator pay and highly variable quality. Some argue that the presence of investor-backed chains offers economies of scale, business know-how and an injection of capital into a starved sector. The reality appears to be much more problematic. An unprecedented — especially from private equity firms, which now by capacity (a ninth, Bright Horizons, was previously private equity-owned), as well as several smaller chains — is creating a cascade of risks for the sector. These risks threaten the path toward an inclusive child care system which works well for all children, parents and early educators.

This piece draws on interviews with current and former chain employees and child care experts, reviews of scholarly research, and analysis of financial records and legal filings. The picture it paints is one of a sector increasingly captured by excessive profit-seeking behavior and systemic vulnerabilities that can come at a human cost to one of the most vulnerable populations imaginable: young children who often have, literally, no ability to speak up for themselves.

Ultimately, says Melissa Boteach, vice president for Income Security and Child Care/Early Learning at the National Women’s Law Center, the issue is whether investor-backed chains can ever overcome an inherent conflict of interest. “The bottom line for private equity, and investor-backed chains more broadly, is profit for [investors]. The bottom line for child care should be early learning and care for children. And it’s not that you can’t ever reconcile those two things,” she explained, but, “when you implement standards, whether it’s living wages for early educators, low child-to-adult ratios, or other measures that affect the quality of that care, investor-backed chains will face external pressures to comply with these standards in the cheapest way possible, which in turn has implications for either lowering the quality of the care or raising the fees charged to parents.”

Boteach added that such reactions are “not necessarily because they’re bad people, but because they have an obligation of profit for their investors. And I think we should talk about it like that. It’s not a dirty thing to want to make money if you’re in business. The question is whether an investor-backed business model — and in the case of private equity, a heavily financialized model focused on short-term profit — is the appropriate model for something that is a public good.”

Boteach’s comments nod to a discontinuity between how America treats early care and education versus K-12 education. Elizabeth Leiwant is director of Government Relations at Neighborhood Villages, a Massachusetts-based nonprofit that focuses on improving the state’s child care system. She mused in an interview, “how would you feel if I told you that, say, Morgan Stanley owned your child’s elementary school?” Leiwant continued, “It would just seem ludicrous to anyone that these companies and investment firms are making decisions about how your child is educated. And yet people either don’t know that’s going on in early care and education, or they somehow feel comfortable about it, because they don’t associate early education with education in the same way that they do with K-12.”

This article is split into six sections: First, how private equity firms and shareholders manage to make money in a sector that is well-known to struggle financially; Second, the systemic risks from debt-driven growth and consolidation; Third, the political risks to universal child care efforts posed by rising investor influence; Fourth, what clientele investor-backed chains seek to serve and how they treat their employees; Fifth, the implications of profit maximization for program quality, health and safety; and Sixth, what actions policymakers have or might take to put up guardrails against excessive profiteering — particularly as more public funding becomes available. One way or the other, what decisions those policymakers make in the coming years will indelibly shape the future of American child care.

Profit from an unprofitable industry: “Profit from an unprofitable industry”

The Changing Nature of For-Profit Chains

The concept of for-profit chain child care is nothing new. Two of the largest chains, Learning Care Group (which now operates several brands including TutorTime and La Petite Academy) and KinderCare, were founded respectively in 1967 and 1969. Their growth rapidly accelerated as middle-class mothers flocked into the workforce but the government failed to provide public funding for a child care system. That failure was most dramatically marked by President Richard Nixon’s 1971 of the bipartisan Comprehensive Child Development Act, which would have invested billions into the beginnings of a nationally-funded, locally-run network of child care programs.

In 1977, the New York Times ran a profile of KinderCare entitled “.” The piece offers that, “its promoters confidently promise that KinderCare will be to the preschool child what McDonald’s was to fast food and Holiday Inn to the salesman’s one‐night stand.” KinderCare has since grown to be the nation’s largest provider of private child care services, with over 1,500 centers serving around 200,000 children —far more than the total number of licensed child care programs in many U.S. states. (KinderCare has a complicated corporate history that includes periods of being privately owned, publicly traded, in bankruptcy, and, from 1996 to 2005, owned by a .)

What has changed in the past 20 years is widespread involvement from outside investors, specifically a bevy of private equity firms. Private equity ownership from both simple privately-held companies and traditional investment or venture funds. As Brendan Ballou, former special counsel for private equity at the U.S. Department of Justice, explained in his book, “,” the private equity business model rests on three pillars to return high profits to investors: buying businesses for the short term (typically three to seven years), loading the companies with debt while drawing out fees, and protecting the private equity firm from legal consequences of any negative outcomes. Many private equity firms also have a history of getting involved in politics to protect their investments, actions which are not always aligned with the public interest: as Ballou writes, “quite simply, Congress works for few constituencies harder than it works for private equity.”

In the 2020s, the chains have been at a rapid clip, largely — though not exclusively — through mergers and acquisitions as opposed to opening entirely new programs. Currently, (depending on the measure used) between 10 and 12% of the licensed child care market. And as industry analysts the New York Times in late 2022, these companies may return profit margins of 15 to 20%.

One can even see the private equity profit motive baked into how some chain executives are compensated. For instance, in 2022, to the U.S. Securities and Exchanges Commission (SEC), KinderCare CEO Tom Wyatt made nearly $2 million in salary and bonuses. KinderCare also uses what they term “equity-based compensation,” whereby most of the company executives’ stock options accrue depending on how much money the company returns to their private equity owners, Switzerland-based Partners Group. The incentive structure includes a segment of stock that vests when Partners Group makes back twice its investment, and another segment that vests when Partners Group makes back three times its investment.

At a time when most mom-and-pop and nonprofit child care programs are , and as parents struggle to or any open slots, the question lingers: how are these companies making so much money?

Maximized Enrollment, Minimized Overhead

The private equity playbook is well-established. Audrey Stienon of the Open Markets Institute has researched how private equity operates in many human service sectors, including child care. Stienon has explained that private equity is good at “making profit from unprofitable industries.” She notes their heavy involvement — often with negative consequences — in areas like and that have challenges similar to child care operations: high costs from staffing needs combined with limited public funding. When it comes to child care, Stienon said in an interview, “they don’t need to serve the whole market, they only need to serve the profitable parts of the market,” adding the chains do this, among other strategies, by “targeting the higher income families, raising the fees.” She went on to emphasize that, in general, “if you’re a private equity investor, you’re there for the short term. Your goal is not necessarily to make a sustainable child care business, your goal is to extract as much as you can during the time that you own the business.”

Interviews with current and former staff of investor-backed chains make it clear a top priority, reinforced by pressure from corporate management, is steady revenue via maximized enrollment and minimized operational costs. Emma Biggs worked as a teacher at three chain sites in North Carolina and was the director at one; she is now the director at an independent center. Biggs said that there was constant pressure around enrollment via management emails and visits, while staffing was kept intentionally lean, leading to strain on staff and “constant high turnover.” Cost-cutting occurred in multiple areas: Biggs recalls being told to limit children to “one sheet of paper per day” for arts and crafts. (She went out and bought more using her own money.)

Additionally, corporate management pushed Biggs to serve only portions of food that were . Verna Esposito, who worked as a teacher, assistant director, and director at chain sites and now owns an independent center, confirmed in an email that such measures were common in her experience. Esposito noted that teachers in programs at which she worked tended to disregard the pressure and give children more food if hungry. Another former director, who worked for a chain both before and after it was bought by a private equity firm, said that after its acquisition, the chain became “really strict” about overhead. That included restrictions on buying items like new toys, while shifting daily cleaning responsibilities from a cleaning service to classroom teachers.

Biggs’ experience is also concordant with that of a former KinderCare director in the Pacific Northwest who wished to remain anonymous for fear of professional consequences. The director shared that one of the metrics she was consistently evaluated on was the number of “FTEs,” an acronym for full time enrollments. She said that in conversations, corporate management was clear the enrollment push was more about profits and growth than childrens’ or families’ experiences. “They’re like, well, if everybody has full enrollment, then we can continue to open centers. And so that was your goal — bonuses would be [partially] contingent on whether you had full enrollment.” The director added that in her view, “the end user is a dollar sign, it’s not a child.”

A Captive Customer Base

Even when parent concerns do arise, chain programs tend to do well because child care has another hallmark Brendan Ballou cites as making an industry attractive to private equity: captive customers. The child care sector in general is extremely supply-constrained: because personnel costs are so high and public funding so meager, high demand has not resulted in high supply. The U.S. Treasury Department has stated child care is a sector in “,” and some experts child care is fundamentally miscast as a market good. With many programs sporting that can take months or years to get off, parents have little recourse if they have quality or cost concerns: there is often no alternative care provider to turn to.

This reality came up in 2023 when a small chain in Vermont was acquired by regional chain Little Sprouts, which is owned by the largest for-profit child care chain in France, itself owned by a French private equity firm. Shortly after the Vermont acquisition, Little Sprouts it was raising rates between 30% and 40%. On a call with the Little Sprouts CEO, the news site VTDigger reports, one parent called out the lack of other options, saying that “You know none of us can leave, so you’re manipulating and taking advantage of that situation.” (Amid heavy criticism, Little Sprouts adjusted the plan to spread out the rate increases over two years.)

The Primacy of Enrollment

At times, the inexorable enrollment push can lead to risky situations. A former Bright Horizons director in California, who also requested anonymity for fear of career consequences, shared a story of a classroom at her center where several children had behavioral challenges and the teachers were not, in her professional opinion, well-enough qualified or trained to handle the classroom. “I made the decision to shut the classroom down and got a lot of pushback” from corporate management, she said. “They were like ‘you have to get it open right away. You can’t do this. And I was like, ‘well, they’re not safe.’” The director went on to add, “Safety versus the bottom line: I hit that wall several times, and I know peers that did as well.”

Legal filings also suggest how chains may at times react to teachers’ allegedly extreme behavior. In 2021, three sisters working at a KinderCare site in Burlington, New Jersey, filed against the company alleging they were subject to racist epithets, and that little-to-no corrective action was taken. The lawsuit alleges that a white teacher at the site referred to the sisters, who are Black, as “the colored people,” and a separate white teacher called them “ghetto.” The filing alleges that the latter incident occurred “in front of the assistant director of KinderCare, who failed to do anything to reprimand” the teacher. After one of the sisters called the district manager to lodge a complaint, the lawsuit alleges, the same teacher called her the n-word. According to the lawsuit, the district manager decided not to discipline the teacher for using the n-word because “no children were hurt.” In the end, the lawsuit alleges, “none of the employees that racially harassed the Plaintiffs were ever disciplined in any way.” (The lawsuit would later be settled out of court with undisclosed terms. KinderCare did not respond to a request for comment about the case.)

Beyond Tuition: Institutional Contracts, Real Estate, and Franchise Fees

Parent fees from enrollment are not the only way investors make money in child care. Several chains, most prominently KinderCare and Bright Horizons, work heavily with corporate clients, as well as public institutions like universities and government agencies, to offer on- or near-site child care options for employees — as with Bright Horizons and Yale New Haven Hospital System. Since these large clients have far more funding available than even an affluent parent, such engagements can be incredibly lucrative. For instance, in 2023 Arizona’s Maricopa County (which contains Phoenix and surrounds) a $13 million contract with KinderCare to operate a center that will serve county employees.

Increasingly, governments are to offer child care benefits to their employees. That includes tens of millions of dollars in state tax credits and grants being offered in both Republican- and Democratic-led states. The federal government, in addition to , made having a plan for child care assistance a requirement for semiconductor manufacturers seeking to access funding from the CHIPS Act.

The contracts resulting from these incentives are likely to flow mostly to investor-backed chains. Child care analyst Annie Dade a note of caution that large chain providers “are really primed to win these contracts” and in doing so may disadvantage community-based providers. Both Bright Horizons and KinderCare have divisions dedicated to corporate clients, and KinderCare has an entire “Government Funding” . Bright Horizons CEO Stephen Kramer has that the CHIPS Act requirements were “wonderful gratification of many, many years of really pushing the idea that employers have a vested interest [in child care].”

Julie Kashen and Lea Woods of The Century Foundation, a think tank, when it comes to the CHIPS Act, “Companies that choose simply to partner exclusively with corporate child care providers … risk failing to meet families’ diverse needs. They could actually be undermining efforts to build a robust workforce by inadvertently skipping over a sector of the child care services that cater to nontraditional hours and multi-age child groups, such as family care providers, as well as crowding out the women- and minority-owned businesses and nonprofit organizations that provide the majority of child care today. In doing so, they may also provide an opening for private equity to use the child care sector to extract wealth at the expense of children’s safety and early educators’ wages.”

Stienon of the Open Markets Institute explained that private equity firms also commonly utilize a strategy known as “leasebacks” (sometimes called “sale-leasebacks”), whereby the owned business is required to sell its real estate — with the profit going to the private equity firm as opposed to the business — and then rent it back from the new owners. This results in businesses offloading one of their major assets and adding a new budget drain from the same property. Ballou writes that frequently, because private equity firms only put in a small amount of their own money when buying companies (the rest coming from investors, both private ones and, increasingly, ), real estate sale proceeds alone can cover the firm’s outlay.

Sale-leasebacks in child care appear to be on the rise. A 2022 trade noted that “in an environment of rising interest rates, net lease assets occupied by early childhood education centers are growing in popularity.” The article quoted Jim Ceresnak, a director at the brokerage firm B+E who specializes in sale-leasebacks, as explaining that “more and more investors and lenders have become familiar with the growing players in this market, which has helped their growth in popularity.”

An additional way corporate chains turn a profit is by piling fees onto individual sites. This tactic is used in chains that operate on a franchise model as opposed to corporate-run centers. Chains that rely on franchises include major ones like Primrose, Goddard and The Learning Experience, all of which are owned by private equity firms. A review of those three chains’ Franchise Disclosure Documents (a legal document presented to potential buyers) reveals that in addition to basic royalties — commonly 7% of a program’s gross revenue, which is a mid-range rate — franchises are often forced to pay to utilize company assets.

These fees can include usage of proprietary curricula and technology. For example, in 2021, mandated that each center is “required to have a minimum of one interactive, wall-mounted ‘whiteboard’” which runs proprietary curricula on prescribed software. As of 2021, the franchise must pay up to a $8,000 one-time setup fee per whiteboard, as well as a $149 monthly “service fee” and a $3.75 to $5.00 per child monthly fee. Franchise Disclosure Documents reveal that in 2019, The Learning Experience made over $25 million on royalties and fees from 242 franchises.

There is one other major way that investor-backed chains fuel their ongoing growth: debt.

When Chains Fail: When Chains Fail

The Cautionary Tales of ABC Learning and Estro Group

Investor involvement and corporate consolidation raises the prospect of widespread system failures. A common feature of private equity engagement is extracting profit while saddling companies with debt that can leave them on shaky ground. Brendan Ballou notes in “,” that “while private equity doesn’t doom a company to failure, the chance of failure dramatically increases. Roughly one in five large companies acquired through [private equity deals] go bankrupt in a decade. This is vastly more than the roughly 2% of comparable companies not acquired by public equity firms that do.” As large child care chains both consolidate and gain market share, then, the systemic risk rises.

Corporate child care chains can and do fail. Arguably the most infamous example was Australia’s ABC Learning. In the mid 2000s, ABC Learning was the world’s largest child care provider, owning over 2,200 centers by 2008. It accomplished this feat by acquiring programs at a meteoric pace —ABC owned only 43 centers in 2001 when it was first listed on the Australian stock exchange — including buying Learning Care Group (then the third-largest chain in the U.S.) and Busy Bees (then the sixth-largest chain in the U.K.). ABC was at one point valued at over $2.5 billion and its founder, Eddy Groves, became a minor celebrity in Australia; among other things, he bought the Brisbane Bullets basketball team.

However, belied a tremendous amount of debt — not profit — that was fueling ABC’s aggressive expansion. The bubble burst once ABC was no longer able to, as a group of accounting researchers , “mask its declining profitability.” It turned out that, in fact, at least 40% of ABC’s sites were losing money.

Amid the global financial crisis, debts were called in and ABC Learning could not meet its obligations. In August 2008, the company collapsed, trading on its stock was suspended, and the Australian government had to step in with a bailout of over AUS$50 million to prevent tens of thousands of families from abruptly losing their child care. (The impact was blunted in the U.S. because, ironically, ABC had sold a majority stake of Learning Care Group to the private equity arm of Morgan Stanley in April 2008 to help reduce ABC’s debt obligations). The fallout included government receivership, parliamentary hearings, and the criminal conviction of the company’s former CFO. Eventually, the remains of ABC were acquired by an Australian nonprofit consortium. The researchers concluded that “ABC Learning presented a classic clash of private interests and public need.”

Similarly, in 2014 the largest Dutch child care chain, Estro Group, which owned 380 child care programs across the Netherlands, declared bankruptcy. This came after years of financial problems following its 2010 acquisition by U.S.-based private equity firm Providence Equity Partners. Per a , the acquisition was marred by “mismanagement,” including the fact that the child care company was saddled with the very debt used to finance its acquisition. This debt —30 million Euros a year onto an already debt-burdened balance sheet — was a contributing factor in Estro’s collapse, as were changing economic and political conditions that led to a pullback in previously generous public child care subsidies.

Estro’s experience also shows how even when things go south, private equity firms can insulate themselves from the consequences. The company’s bankruptcy was carefully planned, and another investment firm immediately snapped up and rebranded more than 200 of Estro’s sites at a bargain basement price. In doing so, , a finance professor at the University of Amsterdam, the new owner “was also able to shed more than one third of employees and locations, especially the less profitable ones in the periphery of the Netherlands, without having to fulfill its legal social obligation to more than 1,000 workers being laid off.” (This that fired employees eventually won.) Engelen concludes that “the parents, children and workers in the over one hundred former Estro-locations that were closed down [permanently] in the aftermath of the bankruptcy were, without doubt, the biggest losers from this sorry story of serial plunder.” The private equity firms involved in the debacle, though, mostly avoided losses — and many actually made money.

The Current Threat Level

Could an ABC Learning or Estro Group fiasco occur in America? It is difficult to assess the risk among U.S. chains because, with the exceptions of KinderCare and Bright Horizons, the companies do not generally provide a detailed public picture of their finances. (KinderCare submitted SEC documents in advance of a potential Initial Public Offering; the company has since plans and Partners Group is instead reportedly to other private equity firms.)

In considering risk, there is a relevant question about the extent to which private equity firms dictate significant business decisions. It is notable that firms regularly take positions of influence with their owned companies. (All private equity firms that own the large chains declined to comment or did not respond to a request for comment.) For instance, two of KinderCare’s seven are executives at their Swiss-based private equity owners Partners Group. Similarly, two of the three Directors of The Learning Experience are executives of their private equity owners, Golden Gate Capital. (Note: the author has an immediate family member employed by Golden Gate Capital.) In the case of Child Development Schools — the seventh-largest U.S. chain by capacity — the Chairman and CEO, David Evans, is also the Chairman and CEO of Glencoe Capital, the private equity firm Evans founded which in 2006 acquired Child Development Schools.

Even Bright Horizons, which is publicly traded, retains a relationship of sorts with its previous private equity owner, Bain Capital. Bain is a significant shareholder, and two former or current Bain executives are on Bright Horizons’ . Bright Horizons’ SEC filings that Bain has special privileges with regards to Bright Horizons’ business dealings: their “certificate of incorporation … imposes some restrictions on mergers and other business combinations between us and any holder of 15% or more of our outstanding common stock other than Bain Capital Partners LLC.”

Research from the U.K. is both informative and relevant as to the current threat level, as Bright Horizons is the second-largest U.K. chain. A team of researchers led by Antonia Simon, a professor at University College London (UCL), in 2022 entitled “Acquisitions, Mergers, and Debt: The New Language of Child Care.” The authors highlight the high debt many chains carry, which increases the risk of collapse:

“(W)e found that private-for-profit companies in the [U.K. early care and education] sector are heavily indebted, and they have very complex financial structures involving foreign investors and shareholders … We also identified that a considerable amount of money is being extracted for debt repayment. For example, two of the largest private-for-profit chains we examined were heavy borrowers, with leverage ratios of debt to total assets of between 51 per cent and 101 per cent.”

They go on to note the example of one U.K. chain, Just Childcare, that was making a profit and paying taxes as of its 2015 takeover by private equity firm Phoenix Equity Partners, and thereafter was “in debt and pays no tax, although it continues to expand.” Overall, Simon’s team writes, “What we have observed leads us to conclude that the high levels of borrowing led to lower profits (or even losses) and reduced or negligible payment of taxes due to the tax relief obtainable on loan interest payments. In our analysis of some publicly submitted financial accounts, we found increasing executive remuneration and rewards for the private equity holding company at the same time that the subsidiaries are making losses.”

The following year, the UCL team’s fears were realized. On December 29th, 2023, the U.K. chain Alpha Nurseries the immediate closure of its 22 centers across the nation. The reason, the company stated in a letter, was “due to its financial position.” Simon said in an interview for this article that while it was impossible to conclusively say profit-seeking behavior led to Alpha Nurseries’ downfall, “it seems highly probable.” Simon added that “if it can happen here, it can happen there.”

As the largest U.S. chain, KinderCare currently appears to be in a moderately, if not entirely, stable financial position (the company for five months between 1992 and 1993). In March 2024, Fitch Ratings — one of the three leading ratings agencies — the company a “B+” default rating alongside a “stable rating outlook.” Single B ratings are as investments that are “highly speculative,” in that they “indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.”

Fitch’s report notes that KinderCare projects an EBITDAR (earnings before interest, taxes, depreciation, amortization, and rent) leverage between 5.8 and 6.4, meaning the company’s debt is around 6 times as high as its EBITDAR. Financial analysts generally consider this leverage fairly high but not disastrous, particularly in sectors like child care with stable and predictable cash flows. Fitch goes on to project KinderCare’s “total revenues to grow modestly … mainly driven by an expansion in center count and an increase in tuition rate supported by offering high-quality service.”

Alongside the economic outlook lies another important factor shaping the future of American child care: as KinderCare and the other U.S. chains continue to gain market share, so too does their political influence grow.

Economic Power Equals Political Power: Economic Power Equals Political Power

Investor-Backed Chains’ Political Inclinations

Private equity firms wield immense political power. And few things, it seems, get private equity firms to pick up the phone like legislation that threatens the profitability of their portfolios. For instance, Brendan Ballou notes that private equity companies spent $54 million in 2019 to successfully that would have curbed surprise medical bills, as they owned many of the largest companies collecting the money.

Audrey Stienon believes this dynamic is at play in child care, saying that “the more market share, the more economic power, that translates into political power. And so if [investor-backed chains] become a growing share of the child care market, they come to define what that means to be a child care provider. They have more money at their disposal to start lobbying and build relationships with policymakers and enforcers and regulators at all levels of government.” In doing so, she adds, the chains can define what the sector “needs from the government.”

When it comes to child care, investor-backed chains have already shown their political inclinations. The Build Back Better Act of 2021 contained $400 billion worth of investments in early care and education. It also carried caps on parent fees, and requirements that child care programs receiving public money adopt at least a living wage for its employees, as well as move towards pay parity between early educators and K-12 educators who shared similar credentials and experience. These provisions posed a significant threat to chains’ business models. As by the New York Times’ Dana Goldstein, the (ECEC) — an advocacy and lobbying group that represents many of the largest chains, including KinderCare, Bright Horizons, Learning Care Group, Big Blue Marble Academy, Goddard, and The Learning Experience — allegedly went to work behind the scenes opposing the bill.

Goldstein reports that despite a public statement of support, “according to three Democratic Senate staffers who worked on Build Back Better … the consortium in meetings reacted skeptically to the idea of subsidizing tuition for upper-middle-class families and preferred a plan that could pass with Republican support.” After Sen. Joe Manchin effectively killed Build Back Better, Goldstein’s reporting continues, executives from chains including KinderCare, Bright Horizons, and Primrose “made donations [the following month] to Mr. Manchin’s campaign fund and his political action committee, Country Roads.”

Similarly, ECEC quietly and unsuccessfully tried to get provisions struck from a Massachusetts child care reform bill that restricts chains’ access to a publicly-funded grant program. The bill, , was passed in March 2024 by the Massachusetts Senate (as of this writing, the legislation has not been voted on by the Massachusetts House) and contains arguably the most robust guardrails against excessive profit-seeking in child care yet seen in America.

The what large for-profit chains must do to access a generous pandemic-era program run by the state — centers receive an average of nearly $150,000 a year to help them maintain staffing and quality — which the legislation makes permanent. If a chain has more than 10 sites in the state, they must agree to accept a reasonable number of children receiving subsidy aid, dedicate a percentage of the grant to educator compensation and follow a career ladder with minimum salary requirements the state would establish, and provide detailed financial information about how the grant money is used. The legislation also caps the amount that any single chain can receive at 1% of the total program money (which as of 2024 is $475 million) and requires that the state prioritize programs serving large numbers of children from high-needs backgrounds.

The bill language was made public on March 7. On March 11, ECEC’s Director of State Government Relations, Elsa Jacobsen, drafted to the Chair and Vice Chair of the relevant committee, a copy of which was obtained. The letter requests “critical amendments” which would eliminate most of the sections with conditions that specifically apply to large for-profit chains.

The ECEC letter variously argues that, as written, the bill “unnecessarily singles out a specific population of providers and severely restricts their access to operational grant funds”; that “it is unreasonable to ask providers to demonstrate a willingness to accept more children receiving child care assistance directly in proportion to that provider’s size” (emphasis theirs) given a lack of full funding for the state’s subsidy assistance program; and that “it is not reasonable to require providers to dedicate a certain percentage” of operational funds to increasing early educator compensation based on a career ladder “unless sufficient funding is provided to meet the high requirements of the career ladder.” (ECEC declined an interview request for this piece but provided the following statement: “Members of ECEC share a commitment with the entire early education community to supporting families with high-quality early education and care, while also elevating our teachers who have chosen a career in education. More than 100,000 children are without child care in Massachusetts. We can only close that gap by working together. Providers, all of whom are still recovering from the impacts of the pandemic, should be treated equally, with a focus on quality and community impact.”)

In the end, no legislator offered the requested amendments before the Massachusetts Senate passed the bill unanimously.

What Chains Want

By contrast, ECEC has been of increasing child care funding that comes with no strings around parent fees or educator wages, such as proposals to increase the Child Care and Development Block Grant, which provides states with federal funding to administer the existing subsidy system. Goldstein reports that at a dinner with Manchin shortly after making their donations, “the executives expressed their wish for federal child care funding to be included in the bill that became the Inflation Reduction Act but said it should be targeted toward lower-income families.”

This orientation is, again, not hidden. In its 2023 annual report to the SEC, Bright Horizons :

“National, state or local child care benefit programs comprised primarily of subsidies in the form of tax credits or other direct government financial aid to parents provide us opportunities for expansion in additional markets. However, a broad-based benefit with governmentally mandated or funded child care or preschool, could reduce the demand for early care services at our existing early education and child care centers due to the availability of lower cost care alternatives, or could place downward pressure on the tuition and fees we charge, which could adversely affect our revenues and results of operations.”

The chains’ political activity at times goes beyond direct child care policy. Harper’s Magazine that in 2009, when Bright Horizons was still owned by Bain Capital, “the company paid the union-busting law firm Jackson Lewis L.L.P. $10,000 to lobby Congress on the Employee Free Choice Act.”

In general, several chains have shown hostility toward unionization efforts. Both Bright Horizons and KinderCare cite unionization as a profit risk factor in their SEC filings, and in 2016 KinderCare notified the University of Southern California they would be an affiliated site on USC’s campus, one month after workers there voted to unionize amid alleged “deplorable working conditions.” KinderCare claimed the decision to shutter the site was unrelated. Similarly, in 2024 Guidepost Montessori chain — a chain with over 100 sites that is owned by Higher Ground Education, in turn by several venture capital firms — abruptly in the Portland, Oregon area for multiple months. This action allegedly came on the heels of staff members at both sites voting to unionize, and the staff members have with the National Labor Relations Board.

If investor-backed chains are steadily gaining political power and helping shape the contours of child care policy, questions around what they see as an ideal system become paramount. In particular, who are the chains wanting to serve, and what does their continued growth imply for efforts to create a system that meets the needs of all families and the educators who care for young children?

Who is Child Care For?: Who is Child Care For?

The Desirable Clientele

In 2018, the Justice Department reached settlements with both and over alleged violations of the Americans with Disabilities Act (ADA). As a result of an investigation, the Department asserted that Learning Care Group staff “refused to provide assistance with insulin administration (by pen or syringe) to children with Type I diabetes based on a corporate-wide policy requiring such refusal.” The KinderCare settlement, which came out of the U.S. Attorney’s office in Connecticut, also focused on allegations related to accommodations for children with diabetes.

Similarly, in 2019 the Justice Department entered a over an alleged ADA violation with a child care chain owned by Spring Education Group (in turn owned by China-based private equity firm Primavera Capital Group). The complaint concerned a child with Down’s Syndrome, Maggie, who the center allegedly expelled when she was unable to meet toileting requirements, a consequence of the chain “refus[ing] to make reasonable modifications to its toileting policy for children with disabilities.” As part of the settlement, Spring agreed to announce a policy of reasonable accommodations for children with disabilities and pay a $30,000 civil penalty (via the settlement, Spring admitted no wrongdoing).

Such lawsuits fit a pattern of chains seemingly trying to cultivate a clientele that can pay their high prices with a minimum of hassle. They also implicate challenges around teacher turnover and training. Lauren Halpin, a former Bright Horizons director, recounted that some of the teachers in her center did not, in her professional opinion, have an adequate understanding of supporting children with special needs. These teachers preferred that children struggling with behavioral challenges be removed from the classroom. Halpin said she was limited in her ability to help because of the other corporate demands on her time.

Halpin’s experience is echoed by a current Primrose teacher. The teacher wrote in an email that, “I’ve asked for resources for students with emotional issues and because corporate doesn’t have set things for it, my requests have been pushed aside, dismissed, or forgotten about.” She added, “I had a student with some pretty severe behaviors — self-injurious and also injuring staff and students, mainly staff as we would keep that student away from others during moments of agitation. I called for help multiple times a day and would ask repeatedly for more assistance. I asked for anything and everything I could think of but the only assistance I was offered until I tried to quit was that they’d help me rearrange the room furniture.”

Beyond whether students have need of extra support, most of the large investor-backed chains — with one notable exception — , showing little interest in serving lower- and moderate-income families. This strategy is not subtle: for example, The Learning Experience states plainly in its Franchise Disclosure Document that “our target market for each location is dual income, middle-class families or single parents who seek a quality child care facility…” The company (according to U.S. Census data, roughly half of American households make less than $75,000 a year).�� Similarly, as The New York Times :

The percentage of Bright Horizons students who qualify for government assistance is a “single digit,” according to Stephen Kramer, the chief executive. At Lightbridge Academy, about one-third of its 66 sites accept subsidized students, said Gigi Schweikert, the chief executive. And at those sites, subsidized students make up 20% or less of the center’s total population.

(Ross Brendel, co-founder of Westerly Group, one of two private equity firms which partnered to acquire Lightbridge in 2021, said that “we wanted to be on the premium end of the spectrum. It’s just very much more healthy unit economics, a lot more tailwinds, and a lot more insulation from come-what-may from the government.”)

Research on the five largest U.S. chains conducted by the think tank Capita (note: the author, though writing in an individual capacity, also holds a title as senior fellow at Capita and helped coordinate the cited research) that across seven analyzed states, the median household income in census tracts surrounding Bright Horizons, Goddard, and Primrose sites exceeded $100,000. In all analyzed states, the median income surrounding chain sites substantially exceeded the state median income.

The major exception is KinderCare. While KinderCare also caters to an affluent clientele — one former director said that full-pay parents were seen as “gods” — the surrounding median income in the seven analyzed states was around $75,000, and the company also of “subsidy coordinators” whose goal is to help eligible lower-income families acquire government subsidies. While government reimbursement rates tend to be than full sticker price, these subsidies provide a steady source of revenue at scale, and many states have in recent years been increasing their reimbursement rates. As seen with the Build Back Better episode, more generous public funding for lower-income families could therefore change chains’ calculations.

The other side of the budgetary equation, of course, is not about how much parents can pay, but how much staff are to be paid.

Educator Churn

Beyond basic health and safety, quality in child care settings is heavily determined by educator stability. Young children thrive on what researchers call “” relationships. When there is high teacher turnover or teachers are experiencing acute stress, they are less able to provide the warm relationships children need. While the child care sector writ large struggles with high turnover, for-profit programs appear to put added stress and demands on their workforce.

A study from the U.S. Department of Health and Human Services , using 2019 data, franchise and chain programs showed the most “high turnover” (defined as more than 20% of the staff who work with children leaving over a 12-month period), with 47% of analyzed sites having high turnover. 45% of independent for-profit programs also had high turnover, while nonprofit and government programs were at 30% or below.

Working conditions seem to be part of the explanation. For instance, in 2023 the state of Massachusetts fined KinderCare over $540,000 for violating labor laws. A from the Massachusetts’ Attorney General’s office said their investigation:

“(R)evealed that employees at KinderCare’s Massachusetts locations were often unable to take meal breaks due to understaffing. Under Massachusetts law, employers must allow employees who are working a shift of more than 6 hours to take a 30-minute, uninterrupted meal break. Similarly, KinderCare was found to have violated wage laws by deducting breaks that were 20 minutes or less from employees’ paychecks. These short breaks are considered compensable time and therefore must be paid.”

In addition, individual center directors were found to have violated the Massachusetts Earned Sick Time law by restricting employees’ ability to take paid sick leave or imposing extra barriers like doctor’s notes.

(In response to the fine, KinderCare released largely blaming state regulation, writing in part that “staffing in the state has unique challenges because it requires that we have a certified teacher in the classroom at all times.” The statement also suggested that teachers can opt out of their meal breaks, although it goes on to note, “we had difficulty proving that teachers had voluntarily missed their meal breaks.”)

Rebecca Gwilt, a mother in the Richmond, Virginia area, sent her son to a local KinderCare. She shared in an interview that one day when she went to pick up her son, one of his teachers pulled her aside. As Gwilt recalled, “She said, ‘listen, we’re treated really terribly here. They treat us awfully, and I can’t take it anymore, and I’m quitting. And I want you to know I care a lot about your child, but I can’t be here anymore.’”

Beyond working conditions, the chains’ high fees and profitability do not seem to translate into substantially higher wages for employees (despite, as noted, the multi-million dollar packages for some chain executives). While large chains commonly offer health insurance and other fringe benefits many independent and nonprofit programs are unable to offer, their starting wages are not meaningfully different. For instance, as of 2024 in Colorado — where companies must post salaries on job descriptions by law — KinderCare teachers in cities like Colorado Springs start at $14.70, with lead (mentor) teachers at $17-$20 per hour. The state that average early educator pay in that area, inclusive of all teacher roles, is $17.41. Similarly, starting wage ranges for Primrose and Goddard teachers in Colorado are in line with surrounding county averages.

This mismatch between profit and pay has at times led to labor conflict. In 2023, staff at a Cadence Academy center (the company is owned by U.K.-based private equity firm Apax Partners) went on strike to protest low wages. The Olympian Cadence educator Rose Bayer, who “said she earns $16 per hour, just 26 cents per hour more than Washington state’s minimum wage of $15.74 per hour. When she was hired, she claims she was told the school raises tuition every six months so that those increases can be passed on to staff in the form of higher wages, but that hasn’t happened.” The staff also demanded adequate funding for classroom materials, which they said they had to pay for out of their own pockets.

Inconsistent Outcomes: Inconsistent Outcomes

What Research Says

It is difficult to draw broad conclusions about investor-backed chains without distinguishing what characteristics are more common to these chains versus independent or nonprofit programs. Any such conclusions are necessarily generalized: there is variation within all types of child care settings, just as experts like Brendan Ballou are clear there are better and worse actors among private equity firms.

Few research studies have been conducted in the U.S. around for-profit child care. What research exists does not make a distinction between investor-backed for-profit chains and those not backed by investors — although that distinction may be less relevant as the vast majority of large chains are now owned by private equity firms. That said, international evidence is suggestive. Drawing on research from Australia, New Zealand, the U.K., the Netherlands, and the U.S., a team of researchers that the totality of child care evidence “suggests quality is lower in for-profit services.” (This evidence is not, however, ironclad: one in the Netherlands concluded that while parent fees were higher in Dutch private equity-backed child care programs compared to non-profit programs, quality levels were more or less equivalent and focus groups found “the experiences of parents and staff differ little between the two types of ownership.”)

The most significant was published in 2007 by researchers at Yale University, who analyzed data from a National Institute of Child Health and Human Development study. The team concluded that “significant group differences were consistently in the direction of higher quality care provided by nonprofit centers compared with for-profit centers.” In all but one age group, wages were higher in nonprofit programs, and for toddler classrooms in particular, both child-to-adult ratios and teacher turnover were lower. Compared to not only non-profit programs, but also independent for-profit programs, for-profit chains came out worse on nearly every metric studied. The researchers conclude “the findings suggest that … for-profit chains were often lower in quality and never highest in quality (though occasionally were the same).”

That said, all U.S. chain programs — private equity-owned and otherwise — are licensed by the states in which they are located, some are accredited by national organizations, and many receive decent-to-high marks in their state quality rating systems. For instance, of the KinderCare sites listed in Illinois’ “ExceleRate,” rating , 26 are “gold circle of quality,” 9 are rated “silver circle of quality,” and 63 are in the “licensed circle of quality,” meaning they meet Illinois’ licensing requirements but most staff have not taken state-approved trainings on additional quality improvement measures.

That variation nods to a feature of many investor-backed chains: their scale can be both a boon and a risk.

The Benefits of Scale

There are certain advantages to the size, scale, and business savvy investor-backed chains can bring to bear. Interviewees regularly praised the professional development that was made available. Nicole Allen has been in early care and education for nearly 25 years, including stints as a Primrose teacher and a KinderCare site director. Allen said her experience with Kindercare “was top notch,” adding that, “I can’t say enough about the professional development that I got from KinderCare.”

In particular, Allen explained, KinderCare helped her learn how to sustainably operate a program in a financially difficult industry. She received training on “how to manage your ratios versus your enrollment, how to manage your food program money that comes in and the other additional dollars that you get from subscribing to whatever scholarship program or subsidy program that you receive in your center. They really do teach you how to see those line items and how to turn a profit.”

Allen added that the training went beyond business practices, crediting “the professional development that you get on child development, curriculum implementation, really understanding teacher-child interactions.”

Denise Hilbert concurs. Hilbert worked with Goddard Systems from 2007 until 2020, helping lead and perform quality assurance as well as helping to open new Goddard schools. She said that her experience was largely positive, as she had a chance to help sites with licensing and onboard new teachers before a new site opened, “showing them the Goddard ways, safe ways.” That said, Hilbert added that when Goddard got a new CEO in 2019, the corporate culture began to shift. “Toward when I first started, it was all about the education. Toward when I was getting ready to leave, it was all about the money.” For instance, Hilbert said there was an organizational restructuring that saw the vice president in charge of education have his influence diminished in favor of those more focused on the business bottom line.

What Hilbert lifts up appears to be a common tension between the pedagogical side and business side of corporate chains. In a 2024 , Rachel Robertson, Bright Horizons’ Chief Academic Officer, offered thoughts that many child development experts would agree with: “Early education is not, in fact, simply a preparatory stop on the way to real school, it is real learning. It is a time when the most brain development is happening, when the foundational architecture for all that comes next is forming and strengthening. It’s the place where children discover who they are, how the world works, and what is possible. It should be full of joy and wonder and exuberant play; not desks in rows, worksheets, and cookie cutter crafts that squelch curiosity and imagination when they are at their very peaks … We must insist on developmentally appropriate practices and ensure developmentally fundamental experiences” (emphasis hers).

The former Bright Horizons director in California, who also did trainings across network sites, affirmed that, “there were some big advantages to corporate: having training resources available, having libraries of tools and things for teachers to refer to, funding for teachers to go do professional development or be part of national groups.” The director noted, however, that the extent to which those assets were actually utilized was highly variable depending on the individual managers who were interfacing with sites. In some cases, she said, managers would work with sites on quality measures, while in other cases, managers would focus on budget savings. The director added that, “there are people [at the corporate office], and I’ve met them, and they’re lovely, and they’re very smart, who have a really good sense of quality. The way that that trickles down through the management structure, it gets completely lost.”

Quality Failures

An assertion commonly made about corporate child care is that their standardization provides at least a floor of quality — the first aspect of which is health and safety. It is useful to look closely at KinderCare in this regard given their dominant size and history in the American child care sector. The argument goes back decades: the 1977 New York Times article about KinderCare noted that the company “aims to be safe and predictable — a common denominator that’s appreciably higher than the lowest but not so high as to interfere with its own expansion.” A KinderCare from 2022 states plainly, “We hold sacred our responsibility to protect and nurture the children in our care.” Nearly all chain companies have prominent statements about safety on their websites.

Yet in addition to the research findings that suggest quality in for-profit programs often tends to be lower, these promises have questionable empirical backing. An analysis of licensing violations reveals, as with quality ratings, enormous variation within a chains’ sites. For example, in California, 86 KinderCare sites have had zero “complaint” visits from state inspectors since 2018 (visits responding to a lodged complaint about the program, which can range from being out of compliance with ratio requirements to safety concerns). During the same period, 81 sites have had four or more complaint visits, and 16 of those have had eight or more, with one site in Solano alone receiving 17 complaint visits.

Moreover, while instances of child abuse and neglect can and do occur in every type of child care setting — and the simple math of corporate chains having many sites increases the probability — there have been many examples of terrible outcomes and quality failures in chain programs that should ostensibly prevent them.

For instance, in January 2024, the Wisconsin Department of Children and Families began the process of revoking the license of a KinderCare program in Schofield, Wisconsin. The local news station, WSAW-7, :

“(T)here have been dozens of violations and fines committed by KinderCare staff over the past few years, including three dozen in the span of a few months. Overall, the violations included a lack of attention given to kids, more kids to teachers than allowed by state requirements, unchecked behaviors from kids that could cause harm, unsanitary and hazardous conditions, and some staff who did not have background checks or who were not qualified to teach.”

A former staff member who spoke with 7 Investigates but who did not want to be named to protect her children due to them being mentioned in some of the violations, said she would report issues to center leadership, but those issues would not be addressed. She said she began talking with the state the first week she started working there.

She said she was caring for the kids by herself with as many as 13 kids above the age of 2, beyond the state’s ratio requirement of at most eight kids per one teacher.

“With the amount of behaviors some of these children have, I’m not able to give myself to the other children who also need my attention,” she said. “I felt like I was lying to the parents (in reference to providing quality care).”

(In a letter to families, the KinderCare director and its district leader stated that they will appeal the revocation and that, in part, “we believe this decision places unnecessary stress on our families … We work closely with state officials to investigate concerns as they arise. In the past few years we’ve trained our teachers and staff on a variety of teaching skills, best practices, and their responsibilities as caregivers.”)

Reports like these are not, however, limited to KinderCare. For example, in 2022, the Colorado Department of Early Childhood of a Primrose franchise. State inspectors documented that staff members “restrained children by placing their legs over them at nap time,” that “twice, staff members were sleeping when they were supposed to be supervising children,” and that the director did not report allegations of abuse and neglect to the proper authorities. (Primrose said in a statement at the time, in part, “The health, safety and well-being of the children entrusted to our care is at the very core of our brand promise at Primrose Schools … Upon learning of the situation, we immediately launched an internal investigation and terminated the franchise agreement. We are deeply saddened by the stress this closure is causing the children and families who attended the school.”)

Even some smaller chains have such experiences. Big Blue Marble Academy (BBMA) operates 67 programs primarily in the Southeast. It had been owned by private equity firm Avathon Capital since 2018 and was sold in early 2024 to another private equity company, Leeds Capital. In 2023, dozens of parents at a BBMA site in Daphne, Alabama alleging widespread abuse and neglect.

Among other allegations, the lawsuit claims BBMA staff members “improperly punished plaintiffs and other children, including but not limited to: unauthorized use of corporal punishment; withholding food; locking children in [sic] unattended in rooms including the bathroom as punishment; refusing nap time as punishment; physical abuse; verbal abuse; shaking; pinching; and pushing.” (BBMA denies the allegations, saying in a statement at the time that “State licensing has concluded its investigation into each of the claims, which were ultimately dismissed as unfounded. Additionally, Big Blue Marble Academy in Daphne has had a series of satisfactory licensing visits and is not currently under investigation for any licensing violations.”) Also in 2023, the former director of a BBMA site in South Carolina for allegedly forging the results of legally-mandated employee background checks while running the program.

At times, these quality failures can result in the worst case scenario. In February 2024, Cadence Education for $16 million nearly three years after a five-month-old, Cash, died at a South Carolina site. Per , the death allegedly occurred after Cash was placed down to sleep in an unsafe position and then left unattended for 30 minutes. (In a statement to the Rock Hill Herald following the settlement, Cadence stated in part: “The health, safety and well being of all of the children in our care is our highest priority,” and, “In June 2021, an infant at our school had an isolated, emergency health situation. Our teachers and staff reacted immediately, performing CPR and calling emergency services. Our hearts remain with the parents and loved ones of the infant, and everyone who was impacted by this tragedy.”)

The Policy Response: The Policy Response

With all of these facets in view, several possible futures emerge as the United States and peer nations wrestle with the growing influence of investor-backed child care chains. One such future involves the chains’ unchecked growth as more public money becomes available: a situation where, as former adviser to the U.K. Department for Education Sam Freedman said , “We’re putting a lot of state money into the sector and they’re taking a lot of money out.” Verna Esposito, the former chain employee and current owner of Little Friends, an independent center in Connecticut, worries about what such a future means for the children whose families will be left out of such a system. “If this is allowed to happen — if private equity becomes the national model — we’re in big trouble,” she said. “Children are going to be in unlicensed care. Children are going to be isolated. Children are going to be missing out on the many, many benefits of high-quality early care and education.”

Elizbaeth Leiwant, of Neighborhood Villages, agrees. She said that, “as we talk about the future of early care and education, we really need to be thinking about what does a quality and sustainable sector look like, and what are we allowing to happen in early education that we wouldn’t stand for in K-12?”

Ownership Transitions

Issues of ownership transition loom large when considering potential future scenarios. Chains frequently grow via acquisitions of existing programs, although there are some exceptions (The Learning Experience, for instance, relies heavily on newly built sites). As the owners of independent programs look to sell, either because they are reaching retirement age or otherwise wish to move on, they face few viable options beside selling to a chain. There are, generally speaking, no public options for acquiring programs, and very few U.S. programs go through the process of converting to a worker- or parent-owned co-op model.

Chains know this. For instance, the private equity-backed company Premier Early Childhood Education Partners has sent unsolicited letters to Wisconsin centers offering to start a conversation about acquisition. One such letter, provided by a program owner, comes from Premier’s chief development officer. It starts with “Have you ever considered how you might transition your business to a new owner?” and goes on to offer, “My best advice to all owners of businesses is to consider what their transition could look like well before actually wanting to wrap things up as the process will take time.”

Similarly, in February 2024, Bright Horizons CEO Stephen Kramer nodded to the idea that the could lead to more acquisition opportunities due to the fragmented nature of the sector. “Competitors, specifically in our industry, tend to be individual owner-operators. They are very vocationally minded and they ultimately will focus on families. They’ll focus on their teachers and may do things that are uneconomic for some period of time,” Kramer said, adding that such programs may now be struggling as finances tighten. He went on to note, “There are isolated examples where owner-operators are turning in the keys or deciding to be acquired. But I think at this point, it’s still very early in that process, and we expect the effects to unfold over the next 12 to 18 months.”

In practice, acquisitions can look like what happened with AppleTree & Gilden Woods, an independent Michigan-based child care chain with 24 sites across the state. In 2022, AppleTree & Gilden Woods was sold to Learning Care Group. In explaining the decision to sell, owner and president Bridgett VanDerHoff , “To be able to do this acquisition, it was about finding somebody that had the wherewithal.” VanDerHoff went on to say she was confident that Learning Care Group would keep her chain growing and profitable. Although terms of the sale were not made public, an attorney for AppleTree & Gilden Woods said, “it was a very meaningful transaction for its owners.”

Erecting Guardrails

Ownership transitions aside, governments have a menu of potential policy responses at their disposal. In 2021, as Build Back Better seemed poised to uncork major public funding for child care, a group of organizations, including the Center for the Study of Child Care Employment and the Service Employees International Union (SEIU), entitled “Action to Preempt the Financialization of the Early Childhood Sector.” The brief suggested several principles: prioritizing public child care funding toward public, nonprofit, and/or small business entities; requiring state agencies to boost the infrastructure supporting such programs; and attaching conditions to the funding “that promote equity, transparency, and accountability.”

Such conditions, the brief contends, might include limits on executive compensation, prohibiting the use of public funds for dividends or other financial maneuvers that enrich investors, requiring public reporting of how taxpayer funds are being used, establishing living wage floors for employees, reducing fees for parents, and so on. The brief notes conditions like those have precedent, for instance around restrictions for airlines receiving pandemic-era CARES Act funding.

There are domestic and international examples of what guardrails can look like in practice. As previously mentioned, Massachusetts currently has the against excessive profit-seeking. Additionally, in 2023, Vermont passed , a significant piece of child care legislation that included more than $120 million a year in permanent funding fueled largely by a small payroll tax. Working amid media coverage around Little Sprouts — the French private equity-owned chain — hiking their fees, Vermont legislators added a requirement that programs receiving public money publicly disclose their tuition and all of their owners and affiliates.

More consequentially, the law states programs may not increase their tuition by more than 1.5 times the national average increase in child care wages. Functionally, that means that for the first year of the law’s implementation, at a 7.2% fee increase. (Leaders from Vermont’s Department for Children and Families many providers of all types have raised concerns about the fee caps because of the timing in which they take effect compared to when the new state money starts flowing, suggesting the importance of how policy guardrails are designed on a technical level.)

Similarly, New Jersey allows for-profit centers to be part of its state-funded preschool system, but . To participate, for example, programs must adhere to educator compensation standards in line with school district salary bands. They may not do a sale-leaseback deal that results in the program owing more in rent than they previously spent when owning the property. Profit is restricted to no more than 2.5% of the total allowable program costs paid by the state. Likely as a result, the major corporate chains have chosen not to participate in New Jersey’s preschool system.

Other nations are also beginning to act. Canadian provinces are taking various steps to curb undue profit-seeking as the country rolls out their child care system. Martha Friendly, executive director of Canada’s Childcare Resource and Research Unit, explained in an interview that per the Canadian federal government’s budget which outlayed billions of dollars for child care expansion and fee reductions, expansion was to be led by “primarily public and nonprofit” providers.

Provinces have interpreted this guideline differently. requires that funding prioritize nonprofit, public, and Indigenous programs as well as family child care businesses. Alberta, a more conservative-leaning province, is more permissive of for-profit programs but has prohibitions on using public money to pay dividends back to investors, and has adopted a “.” Perhaps most importantly, Friendly said, are provinces that are using public funds to adopt fixed parent fees while working toward implementing wage grids for child care educators. Doing so moves the system “away from the market, essentially, and then the possibility of making profits starts to shrink.”

There are also guardrail options that go beyond the child care sector itself. Recommendations which Brendan Ballou makes that could impact the child care sector include having the Department of Justice aid efforts to end liability shields that protect private equity firms from the consequences of their owned companies’ actions; having the Securities and Exchange Commission bulk up mandatory financial disclosures; and having the Treasury Department designate the largest private equity firms as “systemically important,” which adds new reporting requirements and oversight. Ballou contends Congressional action should also be on the table, such as the , which would substantially reform multiple dimensions of private equity.

Whatever action policymakers do — or do not — take, investor-backed child care chains will be a defining influence in the coming years. Reckoning with that influence will have enormous implications for children, parents, educators, government, and the child care sector writ large. These issues go to the heart of how child care is positioned in society, and to an overarching question: how comfortable is America with having, as one former KinderCare director put it, “commodified children.”

Note: The following organizations either declined to comment/be interviewed or did not respond to multiple requests for comment/interviews: Partners Group, Apax Partners, Sycamore Partners, PSP Investments, American Securities, Providence Equity Partners, Golden Gate Capital, Primavera Capital Group, Roark Capital, Glencoe Capital, KinderCare, Learning Care Group, Bright Horizons, Primrose, Goddard Systems, Cadence Education, Child Development Schools, The Learning Experience.

Gas, Groceries, Homeownership Opportunities and Kids’ Extracurriculars

Rebecca Gale — Fri, 19 Apr 2024 11:00:08 +0000

Briyana Holloway remembers the shock when she saw her new paycheck. It was January 2024, and the had given child care educators like her a raise in their paychecks through their employer. Her twice-a-month take-home pay had been $1,800, and now it had leapt to over $2,500 — nearly a 50% increase. For Holloway, who has a bachelor’s degree from Delaware State University and works as a lead teacher in a child care center in northwest D.C., this was the most amount of money she’d ever made.

The extra money changed her life. She enrolled in the to begin the process of purchasing her own home in Upper Marlboro, Maryland, where she lives now in an apartment with her partner and three boys. She can now pay her rent and her bills on time. One of her children has an autism diagnosis, and she has been able to purchase therapy aids for him, such as noise-canceling headphones and a weighted blanket, and she enrolled him in swim classes. She can afford gas for her car without any stress – which matters since she travels an hour each way for work.

Ashley Ross and her family

Ashley Ross also saw a drastic pay bump. She has worked in child care for over 15 years and has seen a number of small salary bumps, including a several thousand increase after she received her associate degree through a specialized program, which allowed her to work and go to school simultaneously. But even after a decade of teaching and the extra credentials, Ross made a salary of $51,000, which made it hard for her to support herself and three children. When the D.C. Pay Equity Fund bumped up her salary, she made $63,000 a year, with her bimonthly take-home pay moving from $1,500 to more than $2,000 per pay period.

“Once this started, everything changed for me,” Ross said. She can easily pay her water bill and electricity bill, and she no longer receives threatening notices to have either turned off. She can pay the internet bill, so her 10-year-old can do homework. She no longer has to rely on her fiancée to pay an extra portion of the bills. She has more money for groceries, and can buy fresh food, such as whole grain pasta and organic yogurt instead of the cheapest options, like white noodles and mac and cheese. The healthier food is especially important for her 4-year-old daughter who has been diagnosed as pre-diabetic.�� When Ross’s daughter wants to go to a bounce house or out for ice cream, she has enough discretionary income to say yes. “I don’t have to tell her to wait until next week when Mommy gets paid.”

For child care workers all over the District of Columbia, the D.C. Pay Equity Fund, the $75 million program that allows early-child care educators to be paid similar salaries to their D.C. public school counterparts, has been “life-changing” and “shocking” and “gave me room to breathe” as described by educators when explaining what the salary difference did for themselves and their families.

At the time of its inception, the D.C. Pay Equity program was and supporting in this role, . Washington, D.C. was in the child care landscape, investing tens of millions of dollars into a child care system, including direct payments to providers and child care centers so that staff could be paid a livable wage. But Mayor Muriel Bowser’s would zero-out the Pay Equity Fund. (Washington, D.C. is one of the rare jurisdictions in the country to offer pre-K3 and pre-K4, ). If the budget goes through with those existing cuts in place, teachers who received a pay bump through the D.C. Pay Equity Fund will now see a drastic pay cut in its place.

Note:

Noah Hichenberg runs the Gan HaYeled Preschool at Adas Israel Congregation, where Briyana Holloway and Ashley Ross work.��The D.C. Pay Equity funds have been “a total game changer” for his staff, allowing the school to recruit and retain teachers and show a level of respect for the profession and difficulty of the job, which has long been seen as separate from traditional public school teachers. Hichenberg says that 90-95% of the tuition revenue he gets from families goes to paying his staff, and even though the Gan doesn’t pay rent or mortgage for the building space they use in the Adas Israel Synagogue, they still cannot afford to pay their teachers the higher wages without the D.C. Pay Equity funds.

Without the funds, Hichenberg would have offered a new employee applying for a job a starting salary in the high 30,000s or low 40,000s. “It really diminishes anyone wanting to apply for these jobs,” he said. But the D.C. Pay Equity Fund came with mandatory levels of which to pay early childhood educators, aligning with their education level and role as a lead or assistant teacher. The fund was able to lift salaries for both new hires and existing employees, and Hinchenberg said many of his teachers were motivated to receive additional accreditation to reach that higher salary level.

For an employee like Holloway, with a bachelor’s degree and as a lead teacher, she now makes over $75,000. “Everyone has been in awe of this program,” Hichenberg said, referring to the other preschool directors and members of the early education field who have been aware of the innovative and transformative nature of the D.C. Pay Equity Fund program. “No one else pays their teachers $75,000.” Hichenberg says he has the most stable workforce he’s ever had this past school year, along with happier teachers since they have less financial stress at home.

But if the Fund goes away, as the budget is slated to zero out? Hichenberg doesn’t know how he can afford to keep the teachers, or how he can expect them to weather such a pay cut.

“To take this away now is cruel and callous,” said Hichenberg. “It’s far worse than not having attempted it in the first place.”

***

The D.C. Pay Equity Fund came out of the D.C. Early Childhood Educator Equitable Compensation Task Force, which was in 2021 during the pandemic with the goal of finding ways to disburse funds from the District’s . This was one of many programs that state and local governments to the stress on child care providers that the pandemic had exacerbated. Hichenberg explained that when D.C.’s Office of the State Superintendent of Education first unveiled the program to educators, they reiterated multiple times to educators that “there is no sunset on this legislation” and it would exist in perpetuity. But it’s a piece of legislation, so politicians can still kill it, he explained. The goal had been to make early childhood educators’ compensation more equitable with people who worked in D.C. public school early childhood — including DCPS pre-K3 and pre-K4 teachers — the same job that Ross has, though she works at a private child care center. But the DCPS contracts are union-negotiated, so not eligible for cuts in the Mayor’s budget.

Neidia Ramsay-Swann

Neidia Ramsay-Swann has been working at the Gan for 8 years, and the salary bump under the D.C. Pay Equity Fund meant she no longer had to take on a second job to pay her bills. Under her previous salary, Ramsay-Swan picked up jobs over the weekends babysitting or caring for the elderly. When the synagogue needed weekend or holiday coverage, she volunteered to work to make the extra money. “But that took time away from my own family just to fill in that gap,” she said.

Ramsay-Swan had enrolled in the same associate degree program that Ashley Ross attended, and got a small bump to $47,000 per year after earning her degree. But after the D.C. Pay Equity raises, her income jumped to $63,000. For the first time that she can remember, she had money to put in her savings account. She could cover her own expenses without relying on her husband. “Now I can do it by myself. Which is like freedom. Who needs a man?” she asks, laughing.

The extra money meant Ramsay-Swan could help her daughter, who was pregnant and out of a job, pay her rent. And she’s saved enough to take a trip of her own this July, to Jamaica to visit her mother.�� Her face brightens when she explains that she hasn’t been to Jamaica in 30 years, and hasn’t seen her mother since 2007. “It’s been a really long time,” she said.

But if the program is cut, “It’s going to be sad,” she says. “You hear in life that you aren’t supposed to go backwards, only forwards. If the money stops, it’s going to be a lot of going backwards, a lot of planning, things you shouldn’t have to worry about again.”

LaVonda Butler-Means has worked at the Gan for six years, and the D.C. Pay Equity salary bump took her from $43,000 per year to the $50,000s. She no longer chooses between groceries and gas to get to work — though Butler-Means says it was never a real choice, gas won because “of course I am going to come to work.” The extra money has allowed her to breathe, she explains, and enroll her two kids in extracurricular activities — gymnastics and swimming for her daughter and football and basketball for her son – though she is looking into soccer options for him as well.

The extra money allowed her to get caught up on her bills. “I had to play catch up from a long time ago, but I’m caught up,” she said. She can pay for school activities, for the book fair, for the small things her kids need and ask for. This year, when the Gan is closed for its spring break, Butler-Means and her family are going to Williamsburg, Virginia, for their first vacation in over a year. But her kids have gotten used to their activities, and Butler-Means recognizes she may have to pull them if the funds get cut. “I don’t like to tell them no, but if I don’t have it, I don’t have it,” she said.

Hichenberg says there is no winning path for his child care center if the D.C. Pay Equity funds go away. “I don’t have a waiting list of potential employees,” he says. “[These teachers] are going to walk away from the job because they can’t afford their lifestyles, and they aren’t flashy.” He doesn’t know if he can find someone to teach who can make $38,000 a year, and without the adequate number of staff, they can’t serve the families unless they raise tuition further. Yet D.C. has some of the in the country, and the Gan charges families $34,000 a year for full day, year-round child care, with a discount to $30,000 for members of the synagogue. “I don’t see how the whole operation sustains itself through this,” he said.

For the teachers, the uncertainty itself is harrowing. LaVonda Butler-Means tries to keep her kids from worrying about it. “Your kids are not supposed to know that you are actually struggling,” she said. But if the funds go away, “it will be a downward spiral for us.” Briyana Holloway is worried that she may no longer qualify for the home ownership program.��She has the documentation now to prove she can provide the monthly mortgage payment, “but I can only prove this up until the program is taken away. I don’t know where I stand after that, honestly,” she said. Neidia Ramsay-Swan feels she’s already gotten “two strokes of good luck” – the associate degree program and then the pay bump. “But now it’s about to change,” she said.

Ashley Ross knows she may need to consider other options if the D.C. Pay Equity Funds cuts happen, but she doesn’t want to. She has worked in early childhood education her entire adult life. She loves the work but feels the role is chronically under-appreciated, especially when programs like the D.C. Pay Equity Fund cuts threaten to take away the financial cushion her family has been given. “We don’t give teachers enough credit,” Ross said. “Parents love us of course. They need us to be able to work, and they trust that their children are safe with us. But we work really, really hard and we should be paid,” she said. “We are due for more shine.”

Finding a Home for Family Child Care in Publicly Funded Preschool

K.C. Compton — Thu, 18 Apr 2024 11:00:27 +0000

Home-based child care is a fact of life in the U.S. On any given day, millions of children spend their days — sometimes their nights — in family child care settings. The decision for a child to attend a family child care home is influenced by multiple factors, but despite their popularity among parents, such homes rarely find their place among state-funded pre-K programs.

Given the number of states that now realize the urgency of expanding their preschool offerings, and the challenge they uniformly face in meeting demand, why have cities and states been slow on the uptake of this valuable option and what it would take to remedy the situation? ��What would it look like for family child care homes to be part of states’ publicly funded high-quality pre-K system? And what might that cost?

Such policy questions concerning 3- and 4-year-olds are precisely up the alley of the (NIEER), whose annual has been a rich resource for tracking state-funded preschool efforts for two decades.

GG Weisenfeld

“We consider family child care homes one of the options in a mixed delivery system, and we know the numbers are probably small,” says GG Weisenfeld, NIEER’s associate director of technical assistance. “Originally, we didn’t know exactly how many states are including them and what that looked like. So, we developed a survey and sent it to the states we knew allowed family child care homes to receive state dollars, either directly or indirectly. We followed up with conversations with state leaders and a review of policy manuals and from that, we wrote a paper.”

That paper became a yearslong suite of papers that together comprise a sort of “Everything You Wanted to Know About Family Child Care in Publicly Funded Pre-K But Didn’t Have the Resources to Ask.”

The initiative couldn’t be timelier. In late February, the U.S. Department of Education and the Department of Health and Human services issued a joint letter encouraging state school and early childhood leaders to collaborate on a mixed delivery approach to preschool and to leverage federal funding to improve access to high-quality preschool. “Mixed delivery” refers to an approach that provides programs in child care centers, Head Start programs, public schools and family child care homes. Every state except Hawaii operates mixed-delivery systems.

The Department of Education has also released guidance to support public schools that use Title I funds for early childhood programming, aimed at closing educational achievement gaps for children of families with low incomes. To implement those programs, policymakers and community leaders will need a much clearer picture of the country’s early care and education mosaic — and the powerful case for family child care as vital to that effort.

Given all the variables, attempting to present the Big Picture of FCC across the U.S. must be a bit like trying to wrangle an octopus into a mayonnaise jar. Nevertheless, NIEER researchers’ first paper, written in partnership with , a national collaborative of funders supporting home-based child care, presented a comprehensive look at the role FCCs play in publicly funded pre-K systems in the U.S.

NIEER’s Lowdown on Family Child Care in Publicly Funded Pre-K Systems

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Coming next: NIEER will publish another paper later this spring on 75 of the largest U.S. cities’ inclusion of FCC homes in their pre-K programs

The paper, “” and its more recent reveal the complexity of families’ choices for their preschoolers — needs as varied and multifaceted as the child care options themselves. Research shows that families with low incomes or from marginalized communities such as immigrant communities, those in rural settings or communities of color are more likely to use home-based care, frequently drawn by lower costs, proximity to home, or the caregiver’s language and cultural compatibility with the family. Embracing FCC as part of states’ mixed delivery systems therefore presents a ready-made opportunity for the equitable delivery of high-quality preschool.

An important consideration for many of these families is that family child care homes often operate during non-traditional hours — significant for parents working in service industries, medical environments or other sectors that require flexible or non-standard working hours. This necessity puts many FCC homes at odds with being part of state- or city-funded programs, which typically require facilities to offer part- or full-school days over a 180-day school year. For FCC homes to participate in state-funded pre-K, policymakers need to address how preschool programs can be delivered within these flexible hours outside public-school schedules, and how educators will be paid for hours of care beyond traditional pre-K days. This is just one example of the questions facing policymakers seeking to integrate FCC into their public programs.

Lessons from States

States face major challenges in expanding their preschool systems thanks to the “mix” in mixed delivery. The variety of settings and different types of providers, from faith-based centers and charter schools to Head Start agencies and family child care homes, leave administrators and policymakers with the Herculean job of distributing funding and maintaining quality across a profoundly complicated landscape.

Karin Garver

NIEER researchers, with support from the , took an in-depth look at how policymakers in Alabama, Michigan, New Jersey, New York and West Virginia have addressed the challenge. As “” shows, each of the five states featured has taken a different approach but has built high-quality systems that serve at least one-third of their state’s 4-year-olds. The paper concludes with recommendations for state policy, based on the authors’ analysis of what worked in all the states’ efforts to support a strong mixed delivery system across settings.

“Many states have not quite figured out how to seamlessly incorporate family child care within a mixed delivery system,” says Karin Garver, an early childhood education policy specialist at NIEER and one of the paper’s coauthors. “Center-based care in a child care center doesn’t look much different from center-based care in a school district setting but are different compared to a family child care setting. In these papers, we’re trying to outline how to make it doable, to see what it looks like to intentionally incorporate family child care into state-funded pre-K programs.

“It’s important to have foundational policies in place when you set up a program before you start adding massive numbers of children to your rolls,” Garver says. “We see states do the opposite and end up with a lot of trouble. They expand enrollment to a whole bunch of kids and then they try to increase quality. It’s very challenging to course-correct like that once the program is established.”

What’s Needed

As the researchers noted in their state analysis, even those that have built high-quality preschool systems struggle to reach all of their 3- and 4-year-olds. Nationally, just 14% of 3-year-olds and 39% of 4-year-olds were enrolled in publicly funded programs in the 2020-2021 school year. One means of ensuring that more children have access to high-quality preschool is to expand to settings beyond school- and center-based classrooms, such as FCC homes.�� NIEER’s “,” spells out what it will take to do so.

Erin Harmeyer

“Researching and writing ‘Conditions for Success’ was a lengthy process,” says Erin Harmeyer, assistant research professor at NIEER. “We started with a literature review to look at things such as curriculum usage, environmental recommendations and we put together some drafts. Then we had a lot of expert conversations with other researchers and a couple of other institutes. Through these conversations, we edited, refined and revised the conditions for success. Then we got further feedback from FCC educators themselves and from a few other experts in the field, and revised some more until we came up with a final draft.”

Given that degree of vetting, research, feedback and revision, any policymaker or community leader wanting to see that FCC is included in publicly funded pre-K can use “Conditions for Success” as a GPS-accurate roadmap to undertake the journey.

But What About the Cost?

The roadmap laid out in “Conditions for Success” will require sufficient fuel to reach the destination. Recommendations include professional development for providers, including on-site coaching, training, peer-to-peer networks and mentoring, as well as developing a system that provides funding and opportunities for FCC educators to obtain a bachelor’s degree and specialized training for home-based settings.

“NIEER considers the FCC educator having a bachelor’s degree a baseline for quality,” Weisenfeld says. “This is based on the current research that says pre-K teachers need a BA degree and ECE specialization to get the positive outcomes we know they can achieve, but only through a high-quality program.

“Early childhood is when children’s brains are developing and the most significant part of their growth and development is happening. Why not have the people with the highest degrees and the most qualifications educating that population? The FCC educators want to have those degrees and they want to be compensated accordingly. We feel that if we can support this population of educators who want degrees, want to make a difference and want to operate a high-quality program, why not support this?”

For the paper, “,” NIEER used a previously developed tool called the Cost of Preschool Quality and Revenue. The tool is intended to help policymakers, advocates and state administrators understand the true cost of implementing a state funded preschool program. The tool enables users to consider various scenarios and see the impact of adding or not adding certain quality standards.

“We looked at how much states are spending now, what we think they should be spending and how much it would cost to achieve that,” says Garver. “Then we looked at the difference and asked, ‘How many are within striking difference of what it would cost to serve children in FCC settings, assuming that they pay comparable salaries to teachers in K-12 settings, use a network system to provide supports for providers and so on.’

“It’s interesting that it’s just not that much more expensive. When we started this project, we had some concern that our work would show that the cost of serving children in family child care settings was too high for states to take it up. That’s just not the case, depending on how the state sets up the system.”

The bottom line, the researchers agree, is that states aren’t spending enough on the programs they have. Given their stated commitment to providing high-quality pre-K to all their preschoolers, they need to be spending more on all programs.

“If they’re spending what they should be on those programs,” says Weisenfeld, “they’re not that far away from where they need to be in order to incorporate family child care more systematically into their state funded pre-K program.”

Some States Have Avoided the Child Care Cliff

Bryce Covert — Wed, 03 Apr 2024 11:00:05 +0000

The federal American Rescue Plan Act, signed into law in early 2022, sent the child care sector the single largest amount of federal funding it had ever received. The biggest tranche of the in funding went to stabilization grants for providers to help them keep their doors open, to . But then the money for those grants ended this past September, prompting the industry to worry about what came to be known as the child care cliff—the sudden lapse of funding that was helping them keep their doors open. One estimate anticipated that programs would close after the money was gone, leaving 3.2 children without a spot.

Yet the child care cliff was in many ways a misnomer. The entire sector didn’t fall off a financial precipice all at once. Instead, the ground underneath child care providers is being slowly eroded at different rates in different places; some have already tumbled over, while others will be able to hold on. Crucially, a number of states have stepped into the void and, so far, have found ways to avoid the cliff altogether.

Massachusetts is one of them. If the child care sector could be said to be flourishing anywhere, you could make a good case for the state. There are 7,100 more child care slots now than there were before the pandemic, a rebound of about 37,000 seats. Last year alone the state’s capacity actually grew by 7 percent even as the cliff began to hit.

“We haven’t seen the cliff,” noted Amy O’Leary, executive director of Strategies for Children, a nonprofit that advocates for investment in children birth to age five in Massachusetts.

Massachusetts has pulled this off by essentially keeping pandemic-era relief flowing on its own after the federal spigot ran dry. To get ARPA’s stabilization grants out the door to child care providers, the state had created the Commonwealth Cares for Children, or C3 program. That money was “a gamechanger for our field, allowing programs to not just stay in business but hire more staff, make quality investments, expand the number of children they are serving, and do that predominantly without passing the costs onto families,” said Amy Kershaw, the Massachusetts commissioner of Early Education and Care.

Then the cliff came into view, and Massachusetts lawmakers made a crucial decision: they found $475 million in state funding to keep the C3 grants going at the same level that they had been with federal relief dollars. The money has come from a number of sources, including revenue from the Fair Share Amendment voters in November 2022 that added a 4 percent income tax on residents who make more than $1 million.

“What we’re seeing is actually not stability but growth in the sector,” Kershaw said.

The child care cliff has certainly already hit in many places. Kansas sent out its last stabilization grants in May 2023; between June and September that year, it , about the number it lost over the entire previous year. In a January survey, of child care programs across the country said they have had to increase tuition. Those that can’t bear an increase may be forced to slash their staff’s pay, which is likely to lead to an exodus that could shut down classrooms or, eventually, entire programs. Almost twice as many of the survey respondents knew of programs that had closed in their communities than those who knew programs that had opened.

The lapse in federal pandemic funding is “adding more and more burden to providers and families and they hold out as long as they can, but at some point you reach that breaking point,” said Karen Schulman, director of state child care policy at the National Women’s Law Center. When that breaking point hits will vary for each program.

Those lucky enough to be in the states trying to avert the cliff could be spared entirely. , including not just Massachusetts but red states like Alaska and Kentucky, have dedicated their own money to continuing grants for child care providers. In those states, providers have been to have to raise tuition or increase their waiting lists. “States are getting really creative with how to keep it going,” said Diane Girouard, state policy senior analyst at Child Care Aware of America.

At the state level, last year was “such a big year for child care,” Girouard said. “So many states ended up putting in record levels of investment and continuing stabilization grants.”

Massachusetts lawmakers seem committed to keeping their support going for the long term. Governor Maura Healey called for another $475 million for C3 in her budget for next fiscal year starting in June, and the state senate legislation in mid-March that would make the grants permanent, although the house still has to consider it. The legislation also doesn’t articulate a dollar amount nor where the money would come from.

Leaders have taken other steps, too. The state has the way it reimburses child care providers who accept government subsidies so that they are paid based on the actual cost of what it takes to care for children, not just what local parents can afford to pay, which increased reimbursement rates by at least 5.5 percent for each provider. They made it easier for families to apply for subsidies, as well as for providers to opt into accepting them, and about 2,500 more children are enrolled in subsidies now compared to the start of 2020. The state has ensured that people who work in child care are prioritized for getting subsidies for their own children to attend child care, which has “been a really important recruitment and retention tool,” Kershaw said. Nearly 2,200 children are enrolled through the new program. All of these steps have resulted in “more programs who are interested in participating in child care financial assistance,” Kershaw said.

Senate lawmakers have also increasing eligibility for child care subsidies to families making 85 percent of the state’s median income, or $124,000 for a family of four; erasing copays for families who live below the poverty line; and capping copays for all other families at 7 percent of their income.

“We’re at an inflection point with this program as we transition from Covid-era stabilization into what we hope will be long-term supports,” Kershaw said. “We’ve left no stone unturned.”

If the child care sector could be said to be flourishing anywhere, you could make a good case for Massachusetts. There are 7,100 more child care slots now than there were before the pandemic, a rebound of about 37,000 seats. Last year alone the state’s capacity actually grew by 7 percent even as the cliff began to hit.

The state’s dedication to funding child care comes from viewing it through a dual lens, Kershaw said. The governor sees it as an economic engine, allowing families to work and afford to live in the state, as well as an important investment in children’s development. “To be the kind of state where people want to move here and stay here, grow businesses and raise families here, we need access to early education and care,” Kershaw said.

Lawmakers’ attention on the sector may also be a silver lining of the pandemic experience. As the world shut down, O’Leary’s organization started a daily 9:30am call between providers that were attended by the Early Education and Care commissioner and other government leaders. That fostered “direct contact to the people who were doing the work instead of bureaucrats in a room about what might help,” O’Leary said. “The early education community recognized its power as advocates, as leaders, as people doing this important work, and as problem solvers.” Kershaw agreed. “The pandemic did expose what many of us working in early education and care have known for a long time about a basic systemic failure,” she said.

Not everything is going completely smoothly in Massachusetts. Child care providers recently that their monthly C3 payments will be reduced in May and June based on a complicated formula that takes into account the economic characteristics of each provider. The funding is, essentially, a victim of its own success: so many child care programs and classrooms have opened and gotten signed up for support that the money ran out faster than state leaders expected. Governor Healey has called for the same amount of money for next fiscal year, which means payments may once again have to be reduced unless lawmakers come up with more funding—the budget process for next fiscal year is still playing out.

The country’s child care sector is still at risk of being further winnowed away. Although ARPA’s stabilization grant funding is at this point long expired, another bucket of money has been available for states to make child care higher quality and more affordable. That funding expires this September. “The impact could be even greater when those funds run out,” Schulman said. “It’s another cliff.”

Even those states that have shaken out the couch cushions to find their own funds to keep the sector healthy may find they can’t sustain those efforts if their budget outlooks change. State budgets have been in recent years, in part by pandemic relief money that kept local economies humming and tax revenues flowing in. But if the economy hits a rough patch, things could quickly worsen, and under the requirement to balance their budgets they may no longer be able to come up with the funding to sustain child care investments. Some, like and , have found stable funding sources; others are on shakier ground.

It’s not to say that the federal government has done nothing after the cliff hit. In the appropriations funding package Congress passed in mid-March, lawmakers included a 9 percent increase in the Child Care and Development Block Grant, which helps states fund subsidies and make care more affordable. The Biden administration also recently finalized that requires states to pay providers based on enrollment, not attendance, to ensure reliable funding. The rule also caps copayments for CCDBG subsides at no more than 7 percent of families’ incomes and encourages states to waive copayments for those earning 150 percent of the federal poverty line or less.

States also seem eager to keep funding child care: mentioned child care in their state of the state addresses this year. But they need federal money to actually meet all of the sector’s needs. The Build Back Better legislative package that Democrats wanted to pass in 2021 would have spent on universal pre-K and affordable child care. It was ultimately doomed, taken down by opposition from Republicans and Democratic Senator Joe Manchin. “We are still nowhere near where we need to be across the country,” Girouard said. “We do need Congress to also step up and support states, because states can’t do this alone.”

In Massachusetts, “We certainly continue to need help from the federal government,” O’Leary said. She noted that “the commitment is there” to funding child care, but that as with all states the budget has to be balanced every year. “To really get it done we will probably need federal dollars.”

Child Care At Work? New Report and Conversation Questions the Role Business Should Play in our Nation’s Child Care

Rebecca Gale — Fri, 01 Mar 2024 12:00:03 +0000

Elliot Haspel is clear about one thing regarding business and child care: he believes that on-site child care or business-supported child care does have a role to play in solving our national child care crisis. Plenty of people benefit from having child care attached to their work, and certain industries — he cites hospitals and airports among them — require a high degree of in-person attendance. Taking care of kids isn’t just good for the kids themselves, it’s actually good for business.

The problem, according to Haspel, comes when our country begins to rely on big business to subsidize public goods — like health insurance for instance. Businesses may have a role to play, but history has shown businesses to be effectively looking out for their bottom line over employee well-being, particularly in the face of economic downtown, shareholder pressure or the “fickle” nature of the dynamic business market.

In his , co-published with the at New America (where I work as a staff writer) Haspel lays out the case for why relying on business to improve our country’s child care could be problematic. Haspel presented his report in a webinar which was followed by a panel discussion, much of which revolved around advocates who proposed a more inclusive “both and” structure.

“On-site child care programs can be part of a broader system,” Haspel said during the webinar. “Some of the best [child cares] in the world exist as part of an on-site program.” The question he asks is: who is child care for? “If all you want to do is get parents to work, you don’t want to invest in a high-quality system. You just want a minimum system that works ok.”

Haspel has already written extensively on this topic — from to cautioning the country on using . He proposes instead a business community that supports a larger publicly-financed child care system, one which has on-site care as part of the solution.

In a Q&A, Haspel explains why this “both-and” solution may not be the one that works — and the pitfalls of touting the unpopular opinion of the moment. But what could the way forward look like instead? A lightly edited conversation follows.

Rebecca Gale: The report is incredibly timely because the White House’s CHIPS Act includes a provision that employers who benefit from this Act should craft a program tailored to the location to provide child care for all of their workers. We are also seeing more states look to find ways to incentivize businesses to help shore up the child care industry. And much of the advocacy community has been quick to embrace these business-led solutions. What do you think we have to gain by looking toward businesses as the bedrock of such solutions, and are there other national models where this method has been successful?��

Elliot Haspel: I absolutely understand the temptation to reach for employers given the dire straits the child care sector finds itself in — any port in a storm, as they say. There are two hypothetical advantages to this approach. First, I don’t think anyone can question that things like on-site child care centers can be immensely helpful to the lucky few who get to use them. We have such an expensive, supply-constrained system thanks to decades of failure to provide adequate public funding that these benefits do provide a, well, benefit. Secondly, there is an argument — and I think it has potential validity — that getting employers engaged around child care just for their employees can be an on-ramp for getting them engaged in the fight for a universal system.

But here’s the thing. There aren’t any national models I’m aware of where making businesses the primary source of child care has been successful. In what are commonly regarded as top-tier child care systems, such as in places like France and the Nordic countries, on-site child care programs exist but are part of the broader publicly-funded system. They are generally regulated the same as a community program and cost the same as a community program. An employee has options, and on- or near-site care is one option among many. In that sense, those offerings are more about physical proximity to a workplace as opposed to running child care through the employer-employee relationship.

RG: You’ve said — rightly — that we don’t expect employers to provide 2nd grade. We’ve managed to keep that public good to the purview of states and the federal government. What is it about the evolution of child care that makes this so drastically different that we are creating more incentives for businesses to get involved?

EH: So it’s worth doing a quick recap of the divergent histories around child care and public schools. The idea of public schooling has been around since the literal founding of America; Thomas Jefferson was an early champion. Horace Mann really kicked the movement into gear in the early-to-mid 19th century. The first compulsory schooling law was passed in Massachusetts in 1852, although scholars actually think the compulsory attendance laws lagged rather than drove widespread usage and taxpayer funding.

The arguments for public schools were varied, but largely rested on the idea that an educated populace was critical for a sustainable democracy, alongside more utilitarian arguments about a skilled workforce and forging a common American identity (or, in its more odious version, forced assimilation of immigrants and Native Americans). Even though public schools absolutely have a child-care function, that’s not how they are primarily perceived in the public eye, then or now.

Child care, on the other hand — with some exceptions — occupied a strange place because of a confluence of gender norms, economics (most early Americans lived on multigenerational family farms or ran a family business), and antiquated views of young children as either tiny adults or impulse-driven half-humans. It got almost zero public funding. Fast-forward all the way to the 1970s — I’m jumping through a lot of history! — and mothers are flooding into the labor force. There’s no child care system there to meet them. Nixon vetoes the Comprehensive Child Development Act in 1971. But there’s huge pent-up demand. So, who is there to meet them? The market. (Maxine Eichner calls this phenomenon the “Free-Market Family”). Now child care isn’t a critical piece of social infrastructure that informs the development of American democracy and safe, healthy, prosperous communities — now child care is a private service, a mere work support. It’s been kicked into a different plane, philosophically.

And both elected officials and advocates went along with it. I trace in how we’ve had pushes for employer-sponsored child care benefits in every administration since Jimmy Carter. Even look at Build Back Better: “pre-k” was to be universal and free, “child care” was to be acquired with a sliding fee scale. So, these mindsets are pretty deeply entrenched. If you accept child care is mere “work support,” then sure, leaning on employers makes some sense. My argument is that child care is so, so much more than just a work enabler.

RG: The obvious analogy that has been touted — both in your report and presentation — is health care, and how and why businesses got involved as purveyors of health insurance. Yet the health insurance marketplace has proved complicated to unwind and many people — myself included — still rely on their employers to provide their families’ health benefits. Is this really so different from how employer-sponsored child care might look?

EH: The health insurance marketplace has proven complicated to unwind because we haven’t been able to muster the political will for a truly universal healthcare system, with respect to ObamaCare, it’s a half-measure. And in some ways, that’s exactly the point.

The more we entrench child care as a job-linked benefit, the harder it will be to transition away from that model, both politically and practically. So, if we want to replicate the employer health insurance model and get 50 percent of the country getting their child care via employers—bringing along job lock, volatility, limited options and inefficiencies, all while leaving millions out in the cold—then I think we need to be honest with ourselves about the tradeoffs. Except, as I point out in the report, in some ways running child care through employers is even worse, because you’ve also got the child to think of and there isn’t any equivalent of COBRA or the ACA marketplaces.

RG: Many experts argue that child care is in crisis: demand is high, supply is low, providers are paid poverty wages and the children are suffering when the quality of care is poor. In the panel discussion there was a lot of talk of “both-and,” the idea that the business-sponsored child care programs could help improve quality, access and supply. Can you walk me through why you are wary of this approach, and what should be done instead?

EH: “Both-and” doesn’t work when you’re trying to squeeze the same balloon, and “both-and” doesn’t work when there are opportunity costs. While I appreciate that some businesses are stepping up (I try to emphasize every time I talk about this that the intentions here are largely good!) and I wouldn’t tell them to stop.

What I would say is that policymakers need to stop using taxpayer money to incentivize them. Doing so comes at the cost of advancing more universal approaches or approaches that prioritize particular populations (like lower-income families), reinforces child care as a mere work support, and gives more political power to big business and investor-backed for-profit child care chains, both of which have shown themselves unaligned with the costs of an affordable, universal, pluralistic system with well-compensated early educators.

RG: The presentation and discussion included a concept in child care that I don’t think gets enough attention: the “minimum child care viable fallacy.” If all you want to do is get parents to work, you don’t want to invest in a high-quality system. You just want a minimum system that works ok. As a parent and someone who has covered child care as a reporting beat for a while, this makes absolute sense to me, but I wonder how such a comment has resonated with a wider audience, particularly decision makers who may view child care only as an economic necessity so that more parents can work?

EH: It’s interesting, I’ve never had anyone challenge me on the fallacy. Again, I get why policymakers and advocates have, for about 25 years now, leaned so heavily on the economic/work arguments for child care. It brought some unexpected allies along, but one analogy I use is that it’s sort of like wedging a door open by breaking the wood. You make an opening, but it’s narrow and comes with quite a cost. Children are backgrounded in that frame. I don’t know that as a sector, we have fully reckoned with what it means to go full-bore on child care as a mere work support. This is actually the topic of the new book I’m working on, so I’ll have a lot more to say in the coming months!

RG: One of my favorite discussion lines was “today’s stopgap measure is tomorrow’s status quo.” It really speaks to the fractured nature of our public policy landscape, but I wonder how it impacts the way our country is shaping the support for the child care debate. Where do you think this leads us, and what do you think this debate looks like 5 years into the future?

EH: If we double-down on employer-sponsored child care benefits — and continue to use public funds to incentivize them — in 5 years, I fear we are going to be in a place where far more parents are dependent on their employers for child care, where big business and big corporate child care chains are politically dominant in the child care debate, and where we are further than we even are today from a universal system that works well for all involved.

We need to say this out loud: a functional child care system will take, at minimum, $100 to $150 billion a year. That’s good and proper for a human service that undergirds healthy children, healthy families and healthy communities. I fail to see how rushing headlong to foreground employers in child care puts us on a credible path to that system.

There is a difference between an incremental step on the path towards an effective system and a step that takes us down a different path. The pursuit of widespread employer-linked child care is the wrong path for America.

Rebecca Gale is a staff writer with the Better Life Lab at New America where she covers child care. The Better Life Lab hosted the event and co-published Haspel’s report — which .

Au Pairs Are Supposed to be Cultural Exchange Visitors. In Reality, They Provide Child Care for $4.35 an Hour

Bryce Covert — Tue, 13 Feb 2024 12:00:47 +0000

Isis Mabel made just $4.50 an hour caring for three children when she arrived in Massachusetts from Mexico as an au pair in 2016. Host families are required to give au pairs food, lodging and $500 toward educational programming, and the agency that she signed up with assured her that her earnings would be enough to cover her other needs, including travel. It is, after all, supposed to be a cultural exchange program.

But the money wasn’t even enough to cover her English classes, let alone anything else. “They wanted you to travel, they want you to study, they want you to do everything with that little money,” she said. “The truth is that it’s not enough.” Once when she was sick, she went to the emergency room, and while she was able to persuade the doctor not to charge her the full amount, she still had to pay nearly $100 for the visit and the antibiotics she needed. That left her with just $80 that week.

What was supposed to be a way for foreigners to learn English and get exposure to American culture has become almost entirely about providing cheap child care.

So she was shocked when her host family paid a local high school student $100 to watch the children for five hours on a Friday because Mabel had already put in the maximum 45 hours that week. “I was like, whoa, you paid some stranger,” she recalled. That kind of money never came her way—because her host family wasn’t required to pay her the full minimum wage as they were with the high school student.

The U.S. au pair program, which operates under Department of State J-1 visas, was founded in 1986 as a cultural exchange for people from other countries. Today it facilitates about 20,000 young people, mostly women, traveling from other countries to the United States to live with host families, providing child care for their children.

What was supposed to be a way for foreigners to learn English and get exposure to American culture has become almost entirely about providing cheap child care. There have been of abuse suffered by au pairs. The program limits their hours to 45 a week, but they are usually required to work the maximum and some hosts push them past that. They are typically paid $4.35 an hour because host families are allowed to deduct 40 percent from the federal minimum wage of $7.25 an hour under the program’s rules to cover the room and board they are required to provide to au pairs. In theory, au pairs and hosts could negotiate for higher pay, but many hosts see that rate as a ceiling. Even when accounting for that deduction, the pay rate flouts laws in many states and cities with higher minimum wages than the federal floor. When Mabel was working in Massachusetts, for example, the state’s minimum wage was .

“A lot of au pairs have been treated poorly, overworked, underpaid,” said Angella Foster, director of community engagement for the Matahari Women Workers’ Center, which organizes domestic workers, including au pairs.

In light of these problems, the Department of State, which oversees J-1 visas, recently to, in theory, improve conditions for au pairs. But advocates who fight for au pairs’ rights oppose the proposed changes, arguing that the Department of State has not been following federal labor laws that apply to domestic workers and that the changes would only continue its errors and deploy authority it doesn’t have. They also say the proposed rules run roughshod over a number of protections au pairs are due under state and local laws.

“Now that the program is primarily a work program, regardless of how valuable it may be, it cannot be legally maintained as a federal program within the [Department of State],” the nonprofit National Domestic Workers Alliance and law firm Towards Justice they submitted about the proposed rule changes. “Absent authority to operate a work program for foreign live-in nannies, [the Department of State] must halt operation of the au pair program or dramatically restructure it. The proposed regulations do neither, and instead propose to continue operating a work program, while also preempting state and local labor protections.”

The Department of State’s proposed rules include a complicated formula to, supposedly, take higher local and state minimum wages into account while still enshrining the 40 percent deduction for food and lodging. The rules, if enacted as proposed, would require that au pairs’ pay be based off of the highest federal, state or local minimum wage where they’re placed through a four-step formula and a meal and lodging deduction. At the lowest, someone where the minimum wage is no higher than $8 an hour would be paid $8 an hour; at the highest, if the local wage is $15.01 to $18 an hour, they would have to be paid $18 an hour. Families would then deduct $130.54 a week for room and board.

In states and cities without minimum wages above the federal floor, au pairs would be paid for 40 hours of work, up from $174 under current rules. At the highest wage tier, an au pair would make $589.46 a week for 40 hours of work. The rules would also require overtime pay above 40 hours, reduce the program’s maximum hours each week from 45 to 40, and increase the educational stipend au pairs get to attend English and other classes from $500 to $700.

The State Department has received a flurry of comments, mostly negative ones from host families, who were directly prodded by the private agencies that run the J-1 visa program to submit negative comments. They that being required to pay au pairs more will ruin the program. Natalie Jordan, senior vice president for au pair agency Cultural Care Au Pair, the largest in the country, the new rules would make the au pair experience “transactional” instead of a “familial experience.”

But advocates argue that the proposed wage increases violate for live-in domestic workers under the Federal Labor Standards Act, which say that such workers have to be paid at least the federal minimum wage for all hours worked. While there is some employers can take for providing food and housing to an employee, it “must primarily benefit the employee, rather than the employer” and, NDWA and Towards Justice write, can’t apply if “the employee is required by law to stay in employer housing.” Since au pairs are required to live with host families and doing so benefits their employers, they argue that the credit shouldn’t apply. “The Department of State’s proposed rule is departing from those rules. It has created its own rules,” argued Rocío Ávila, senior employment law counsel and state policy director at NDWA. “The Department of State does not have the authority to create a new set of rules pertaining to meal and lodging and credits and deductions as they are doing in the rule.”

“They want to maintain its status quo,” Ávila added. “What they have proposed is erroneous. It is inconsistent with the current and established set of rules.”

Foster is concerned that the proposed rules would also pre-empt not just state and local minimum wage laws but domestic workers bill of rights that have been passed in . Her organization helped fight for the one in Massachusetts, which went into effect in 2015 and guarantees minimum wage, overtime, time off, and other protections. Au pairs are and a court in 2020 that host families have to abide by the rights. The Department of State’s proposed rules “would deprive au pairs of their basic rights,” Foster said, such as “anti-discrimination, retaliation, compensation.”

Ávila argues that au pairs are live-in domestic workers who provide child care and should be treated as such, including by changing the visas they come in on. “It’s a work arrangement,” she said. “The cultural exchange or educational component isn’t the center of the experience.” Some host families, she noted, won’t sign off on letting au pairs take the hours they need to go to classes. Not to mention that, as Mabel experienced, the low pay often puts classes out of reach, let alone travel.

She’s backed up by some recent court decisions. In 2019, au pair agencies settlement with nearly 100,000 au pairs to settle a lawsuit claiming the agencies colluded to keep pay low and ignored overtime and state and local minimum wage laws. The Massachusetts ruling also affirmed that au pairs are employees, not just cultural exchange visitors.

There are some parts of the Department of State’s proposed changes that advocates support. Those include allowing au pairs to participate on a part-time basis instead of exclusively at 45 hours a week, reducing the maximum full-time workweek, creating paid sick and other time off rules, formalizing agreements between hosts and au pairs and outlining their duties up front, protecting au pairs from privacy invasions such as putting cameras in bedrooms and bathrooms, raising standards for vetting both au pairs and host families, and creating reporting requirements to ensure host families pay au pairs correctly, among others. “There are some aspects of the proposed rules that we are going to say improves protections for au pairs,” Ávila noted.

But rather than have the Department of State propose new rules, advocates want to see the agency step away from regulation of the program entirely and allow the Department of Labor to determine what au pairs must be paid and whether host families can deduct a credit for meals and housing. “The Department of State lacks legal authority to even create this scheme,” Ávila said. “Put it in the hands of the agency that is charged by Congress to do so and let that agency produce their own set of rules.” The comments from NDWA and Towards Justice call on the Department of State to halt operating the program “until Congress authorizes it” as well as shelve its proposed rules.

Foster is fighting for a program that ensures au pairs across the country can enjoy the same benefits and protections afforded those in Massachusetts under its domestic worker bill of rights. “That’s what we really want,” she said.

Mabel got a taste of much better working conditions when she was matched with a second family in Massachusetts. That family only asked her to work 30 hours a week caring for their two young children and paid her $15 an hour. “I really felt relief,” she said. “That’s the word.”

She also started organizing with Matahari and watched as au pairs were brought under the protection of the state’s domestic workers bill of rights. After that she heard about fewer “horror stories,” she said.

“This should be the way to treat the au pairs,” she said. Rather than tinkering with existing rules that leave most of the exploitative pieces of the program in place, she said she wants regulators to look to the bill of rights, which has been in effect for four years now. “That should be the model, honestly, to follow,” she said.

Opinion: How the Enduring Belief About Child Care – I Don’t Want Someone Else Raising My Kid – Hurts Us All

Haley Swenson — Thu, 25 Jan 2024 12:00:22 +0000

“What do you do for child care when your kids are on break from school?” I asked a new acquaintance in my home town recently. She explained that she’d worked out her schedule so that when she was working, her husband was home, and when her husband worked, she was home with them.

“Oh, that’s so nice you both have that flexibility,” I said.

“Yes!” She said, “We don’t like the idea of someone else raising our kids.”

I was at a loss for what to say back. Hearing her words, it was hard not to feel defensive, since my baby was in child care that very moment I spoke with her. And I, like , was in the midst of a somewhat desperate search to find and afford even more child care support than I currently had. I’d asked about her child care arrangements in part hoping to learn more about my options.

My wife and I currently pay for about 12 hours of professional child care per week, juggling care for our baby during the other 28 work hours between the two of us, and shifting work hours to late into the evening, and sometimes weekends, to get our work done. The centers we contact are full, (if they can find time to call us back) and the price of in-home child care is steep. We are constantly searching for that golden goose, a qualified caregiver whose schedule works with ours, whom our son likes and our paychecks can cover. We aren’t alone.

The Center for American Progress finds that more than , census tracts with at least fifty children and no licensed child care providers, or so few options that there are more than three children for every spot in licensed care. Where we live, in Utah, more people live in child care deserts than in any other state —��.

My friends from outside Utah often assume that’s because of the religious and cultural backgrounds of Utahans, reducing the need for child care because of the commonality of traditional breadwinner/caregiver households. Yet in Utah, 62 percent of mothers of young children participate in the labor force, a number lower than the national average of 69 percent, but certainly not as distinctive as many would guess.

Are we all, 69 percent of the nation’s mothers, “letting someone else raise our kids”?

It wasn’t the first time I’d heard this line — that someone who didn’t use professional child care services considered doing so to be some sort of abdication of parenting. I can even remember a relative of mine saying this about her own decision not to work outside the home when I was twelve or 13-years-old. I’d found it perplexing even then, because my mom ran a child care center in our home. My mom was a beloved caregiver, one that even today her former charges, now fully grown, will hug and warmly introduce to their own families when they see her at the grocery store or a family wedding. But she hadn’t become their parent, nor had she raised them. There was an enormous difference between my relationship with my mom, and her relationship with the kids she cared for while their parents worked to support them.

Back then, this idea confused me, but it didn’t hurt. Perhaps hearing this line stung a bit more that day because this was the first time I’d heard it since having my own baby. Still, like then, it didn’t hold up to scrutiny.

When this person’s older kids were in school for 6 hours a day, five days a week during the school year, were their teachers “raising them,” I thought about asking? Surely, she didn’t think dads who worked full time while their spouses cared for their children were ceding responsibility for “raising the kids” to their wives? And how many hours in child care did a child need to spend per week, before they were being raised by someone else? 40 hours? 30 hours? There are 168 hours in a week. Where was the line between socializing with and being cared for by trained early educators, and being raised by them?

I took a deep breath, and reminded myself my new acquaintance and my relative hadn’t invented this kind of thinking. Despite the modern realities of economic and family life requiring that most parents work for pay, antiquated thinking about child care is all around us. Just a few years ago, Idaho State Representative Charlie Shepherd voted against a bill that would increase support for child care in the state because he felt . “I don’t think anybody does a better job than mothers in the home, and any bill that makes it easier or more convenient for mothers to come out of the home and let others raise their child, I don’t think that’s a good direction for us to be going.” He later apologized, saying he’d misspoken and merely intended to praise mothers.

Amidst an ongoing child care availability crisis worsened by the rapid , and a , Congress has also failed to increase its role in creating a sustainable, affordable, high-quality child care system. Over several months, the news outlet The 19th contacted members of Congress to find out their views on child care policy, only one-quarter of legislators and .

I reflected for a moment on my own child care provider, the young woman taking a walk with, playing with or reading to my baby at that very moment. It had taken her just two or three days to establish a comfortable, sweet relationship with my baby. Now he giggles when she greets him after a nap and teems with excitement as she prepares the stroller to take him out on what she calls a “nature walk.” And how enriching for him that he has yet another kind, caring person to trust in the world and teach him about relationships and language and life.

I asked Cara Sklar, my colleague at New America and the director of the early & elementary education policy program, just what my baby is learning while he’s in child care.

“Children are actively learning from the moment they are born. And the way young children learn is through interacting with adults,” Sklar said. “These nurturing and responsive interactions, or their absence, shape the physical architecture of the brain that all future brain growth is built upon — from how we see and hear, to how we think and learn, to how we form relationships, and even to our future physical and cardiac health.” With stakes like these and the benefits to come, I hope my son will have not just one or two caregivers like the one he has now, but dozens of such teachers in his life.

Why are we so afraid of letting others join us in raising our children? Just what are we so afraid of?

My hope is that the current national conversation on the child care crisis and how severely it limits parents’ work options and well-being will lead us to build and fund a child care infrastructure that gives every parent access to this kind of nurturing and learning for their children. Maybe a system like that could transform our cultural biases about child care and end these myths for good. But if ever again someone tells me they don’t use child care because they don’t want someone else raising their children, I’ll know what to say:

I don’t want someone raising my child for me either. But I am so glad my family and millions of others have found trusted providers to raise them with us.

In Texas, A Break for Child Care Providers Via Property Taxes

Rebecca Gale — Tue, 16 Jan 2024 12:00:38 +0000

For Alejandra Gardner, it wasn’t until she began receiving funds from the American Rescue Plan Act that her child care center, House of Little Angels Learning Center in Austin, Texas, could raise teacher salaries and begin to apply for the Texas Rising Star accreditation.

“When I started in this field 12 years ago, the teachers were making $10 an hour. Now they expect to make $16, and we have a child care shortage in South Austin,” said Gardner. The Rising Star accreditation meant a certain number of teachers would need to have a degree, and the extra funds allowed her to cover their time in school. The process took a year, and now House of Little Angels Learning Center has received the accreditation.

But the ARPA funds for child care in Texas have run out. And Gardner, like providers all over the country, are wondering how to pay their teachers their existing salaries without raising tuition prices beyond what parents can afford. And though Texas had $33 billion in surplus funding, there wasn’t the political will to give it directly to the providers.

Enter Proposition 2: Texas’ plan to help child care providers like Gardner by waiving property taxes. Though Proposition 2 has a number of hurdles for providers to clear in order to qualify and receive payment, Gardner estimates that she will save $5,000-$7,000 per year when the proposal goes into effect in South Austin.

Property taxes play an outsize role in Texas as compared to other states, since Texas does not have a state income tax. Taxes are collected through property taxes and sales taxes, which are higher than many other states to make up for that shortfall. “We were reading the political tea leaves, and the money was being given back to Texas citizens in the form of property tax relief,” said Kim Kofron, senior director of education at Children at Risk, which advocates on behalf of early childhood education in Texas. “So that’s when we decided to see if property taxes might be a way for child care providers to get a break.”

“This is not the silver bullet, this is not going to fix child care, it is not going to replace the ARPA dollars that are no longer there. But this is a step forward. Sixty-five percent of the voters said yes to child care. Note that the majority of the voters were 50 years or older, and half had voted in the Republican primary. This measure was not passed by a majority of Democrats. Citizens across Texas, those that are 50 years or older, said yes this is something we need to do.”

The property taxes include three buckets: city, county and independent school districts. Kofron and her coalition came up with a proposal to provide city and county property tax relief to child care providers – but left the school district taxes intact. “We didn’t want to be in a position of robbing Peter to pay Paul,” said Kofron.

There were heavy negotiations on the proposal, entitled “Proposition 2.” For example, a requirement was added in that the child care centers eligible for property tax relief needed at least 20% of their students to qualify as low income. (Kofron estimates that approximately 2,700, or 40% of all child care providers in the state, would meet that criteria). Child care centers that rented from landlords would be entitled to the property tax savings as a direct pass-through. And the legislation signed into law was just the first step of many. As a change to the state’s property taxes, the legislation was required to be approved as a constitutional amendment. It was signed into law by the governor in May and set to appear on the statewide ballot for a vote in November.

Kofron and her team toured the state, organizing people connected to child care to get out the vote and educate communities on the importance of Proposition 2. But even they were surprised at the groundswell of support when the measure passed by 65% of the vote, winning nearly every county in the state, including places that tended to vote strictly conservative. But this was just the second step of the process. The constitutional amendment and legislation allowed cities and counties to decide if they wanted to provide the property tax and relief, and at what rate. Austin was the first jurisdiction to take up the measure, passing it on November 9, two days after the statewide vote on November 7. Still, other cities and counties are just beginning that process, and others may not take it up at all.

The uphill battle is for Kofron and her team to crisscross the state to advocate for cities and counties to decide that child care providers be exempted from property taxes. But even those exemptions are unevenly distributed. Property taxes are calculated using a variety of factors, including the appraised value of the land and whether it is in or outside of the city limits. Child care centers in nicer buildings within city limits have the potential to reap many thousands of dollars for property tax relief — Kofron estimates as much as $30,000 per year for one center. But places in older buildings, or in smaller plots of land and in counties with lower taxes may see only a few thousand dollars in return.

The actual impact will vary widely depending on the child care facility’s location and property tax burden. “It can be a small bite of the apple, but it also can make it easier for child care facilities to qualify to acquire their own property,” said Ed Wolff, a board member of Children at Risk and president of Beth Wolff Realtors in Houston, who was involved in the Proposition 2 effort.��A reduction in property taxes helps a small business owner lower its debt-to-income ratio, and in areas where child care is most needed, “revenue is lower and the costs aren’t necessarily less,” said Wolff. He cites the example of urban areas going through gentrification and modification, “The appraised value [of the property] is escalating rapidly, and yet the people’s income is not.”

For a low-margin business like child care, every savings helps. The providers Kofron talked to plan to use the funds to avoid raising tuition for families, invest in their staff and improve the experience for their students. But it’s a herculean grassroots effort to pass legislation three or four times — especially when doing so may only yield less than a month’s worth of child care expenses.

“This is not the silver bullet, this is not going to fix child care, it is not going to replace the ARPA dollars that are no longer there. But this is a step forward. Sixty-five percent of voters said yes to child care,” Kofron said. She points out that the majority of the voters were 50 years or older, and half had voted in the Republican primary. “This measure was not passed by a majority of Democrats,” she said. “Citizens across Texas, those that are 50 years or older, said yes this is something we need to do.”

Kofron acknowledges that it would have been far easier on the child care providers and the organizers if the state had given some of that $33 billion in surplus funds directly. Such funds could have helped stabilize the industry, expand capacity or pay staff a livable wage which could reduce turnover burnout. Though there is one significant advantage for the property tax measure: “It lasts for the future,” said Kofron. “It’s not one and done.”

The historic amount of ARPA funds made a significant difference for the child care industry, which was in a precarious position before the pandemic only to be forced to deal with subsequent closures during the emergency phase. But as the ARPA funds end, the child care industry is forced to come to terms with how to survive without that influx of funding, and state efforts like Proposition 2 in Texas may be a lifeline — albeit a small one — to keep the doors open.

“We don’t think that there is a single strategy that is going to solve the child care problem in the country,” said Linda Smith, director of the early childhood initiative and the Bipartisan Policy Center. In a place like Texas — which has some of the lowest funding per child for early education in the country — child care advocates were up against a legislature that had $3 billion to spend and yet wasn’t prepared to support direct payments to providers. “The tax provision was more understandable and cleaner,” said Smith. It became a matter of asking, “what is going to work in that state?”

Kofron’s efforts on Proposition 2 are far from over. Since the measure requires the approval of local jurisdictions, she and her team will have to traverse the state once again, coming up with toolkits and arranging conversations with city council members and county commissioners about taking up the property tax proposal. But engaging with local leaders, especially in parts of the state that have been less engaged on the issue such as East and West Texas, the panhandle or the Rio Grande Valley, can lay the groundwork for future mindset shifts. “It’s really going to force our hand to have conversations in communities where child care may not be on their city or county radar.”

Smith believes there is no one-size-fits-all solution to the nation’s child care crisis. Even robust subsidies to providers come with challenges, as subsidies on their own do not create more supply. Instead, what’s needed is a combination of direct support to parents, tax policies and paid parental leave policies, which can take some of the stress off parents for returning to work, and alleviate the demand for infant-care, which is often the costliest and hardest form of child care to find.

“It will be interesting to see what will happen by taking property taxes out of the equation for child care programs. Will that expand their supply or keep fees low for parents, and what is the impact on the child care program itself?” Advocates in the child care space will be keeping an eye on the impact of Texas’ Proposition 2, to see if fees were changed, care expanded and supply shifting at all.

For Alejandra Gardner, some relief is better than nothing for her child care center. She worries what will happen when the funding stream from ARPA is completely gone and the property tax relief hasn’t yet kicked in, and how she will maintain the staffing levels needed so as not to stress her small team. “It’s a hard job with a lot of turn-over,” Gardner said. “I tell our teachers it’s ‘a hard job and it’s a heart job.’ A lot of teachers have the heart for it, but when their pay doesn’t match up with what they need, they have to leave to do what is best for their family.”

Opinion: Quality Journalism Needed to Shift Attitudes on Child Care

Rebecca Gale — Wed, 20 Dec 2023 12:00:14 +0000

It began with Build Back Better.

Well, truthfully, it has been a decades-long push for many advocacy organizations to put child care at the forefront of the national economic debate, and certainly to recognize it as a critical input of our economy. If we want people to work — especially women — and we want children to thrive, then we need a robust, high-quality child care system that families can access and afford.

Build Back Better was the first time since the 1970s that our country was on the precipice of making that historic investment in child care through sustained year-after-year funding. Despite that show the vast majority of Americans believe child care is worthy of federal investment, and despite having a President who championed the legislation, it failed.

There are myriad reasons why it failed, and documenting those failures would fall outside the scope of this article. But one of the reasons we saw that child care was lagging behind other public interest priorities, like K-12 education, was that there was insufficient news coverage. It wasn’t until the COVID-19 pandemic spotlighted the role that child care played in our economy — literally, families could not work because no one could watch their young children — that news coverage on the topic increased by 90 percent, according to by the First Five Years Fund.

These reporting grants just scratched the surface, but they have reiterated for us what many in the field have long known: child care is a worthy investment and requires federal support. We cannot keep band-aiding our way through to a patchwork system that leaves too many families to fend for themselves.

But how could we keep that drumbeat going? We know that media coverage influences the national debate, and that stories oriented toward solutions resonate more with readers. My colleague, Haley Swenson, and I made the case in the that mainstream news organizations have for too long neglected to cover child care in a sustained, robust and rigorous way. We argued that news outlets across the country should dedicate resources to forging child care beats in their newsrooms. Yet we also saw that those same newsrooms were struggling to survive in a tightening economy, shedding jobs and dropping coverage areas. Many lacked the bandwidth to add child care coverage to the reporting beat.

I work at the at New America, where narrative change is part of our . We sought to find a way to keep the conversation on child care moving forward. Just because Build Back Better had withered did not mean that sustained support for child care must meet that same fate.

We decided to take advantage of both trends: that there was more to report on child care innovations, and that there were now more seasoned policy reporters in need of work. So in response, we . We asked independent journalists, writers and content creators from a variety of backgrounds and regions in the country to turn their reporting eyes on the child care crisis and places where communities were coming together to seek solutions to address it.

What followed was : told through audio, video, and the written word. Through our reporting grants, we showcased that child care problems exist across the country, at every socioeconomic level — though it disproportionately affects the most marginalized and least-resourced populations — and the solutions required must be responsive to the very diverse communities, regions and families in the United States.

that there is no substitute for federal funding for high-quality, universal, equitable child care infrastructure. But, other entities (workplaces, states and localities) are recognizing the need for stable child care infrastructure and attempting to fill the gap, showcasing the growing interest among the public, local policymakers and community stakeholders to find workable solutions. Diverse types of child care arrangements — including home-based care and flexible family, friend and neighbor care — can help meet the demand of child care and better serve under-resourced and lower-income populations, especially in rural areas or for families of color.

When we focused on the providers and listened to their stories, we also found that educators who receive adequate compensation, training and support for their role as child care providers are able to do a better job, stay in their positions longer and experience less burnout and turnover than those operating in the current system where many child care centers pay poverty wages. A stable workforce not stressed about paying bills improves the quality of care.

Finally, the many consequences of a broken system for a variety of populations need to be fully understood to help build public support for child care, including the way child care is reported on and visualized in our country. These reporting grants just scratched the surface, but they have reiterated for us what many in the field have long known: child care is a worthy investment and requires federal support. We cannot keep band-aiding our way through to a patchwork system that leaves too many families to fend for themselves.

Change may take time, it may take a mind-shift, and it may require new leadership and a ready to challenge previous frameworks of thinking about what care entails and how it is provided. But it also takes journalism to cover the issues and do the deep digging. And it is our hope that the high quality team of journalists covering child care are only just beginning.

Opinion: The Economic Argument for Child Care Is Urgent. But Is a Child Care System Built for Maximizing Economic Returns Best for the People Involved?

Haley Swenson — Tue, 05 Dec 2023 12:00:13 +0000

Experts say that every dollar invested in care produces . Child care spending in particular both creates jobs and enables millions of workers to keep their jobs, making it a in the United States.

On the other hand, studies estimate our current, broken child care landscape costs parents, employers and taxpayers billions of dollars a year. The Century Foundation estimates that with the loss of emergency pandemic funding for child care, , and taxpayers and businesses will lose $10.6 billion in revenue. A study by ReadyNation estimates those losses now total , more than double what they were pre-pandemic.

While some may debate the details of these estimates, no one who studies the issue seems to doubt the underlying premise that child care is an economic issue. In 2021, arguing for a massive national investment in early childhood.

Yet nearly three years later, a massive federal investment in child care remains politically out of reach, even after the COVID-19 pandemic and recovery have drastically weakened the child care sector and revealed just how critical child care is to a functioning economy.

Why haven’t arguments highlighting the billions of dollars on the line moved us to action?

“I think it has moved some folks, and that’s why it’s been our dominant argument. We’ve been making these arguments for twenty years,” said Eliot Haspel, senior fellow at the think tank Capita and author of the book “Crawling Behind: America’s Child Care Crisis and How to Fix It.”

“The economic argument for child care is an important one to be able to marshal for certain audiences,” Haspel acknowledged. “But at certain times I worry we’ve gotten just about as much mileage out of them as we’re going to. I don’t know how many people are left who are persuadable by economic data, who aren’t already persuaded.”

What’s more, Haspel worries the economic case for child care leads to solutions that prioritize the economy over kids and families. A child care system built for maximizing economic returns is not necessarily the best for the people involved.

“There is some danger to making the case for child care purely about its economic benefits,” said Haspel. “If what you’re trying to do is make sure that parents can get to work so that company productivity can continue to operate at the highest level, then you actually don’t want to invest in a really high-quality child care system that offers lots of good options and well compensated educators. All you need is a child care system that is minimally adequate.”

Haspel believes the economic case for child care has to be made in the larger context of an argument for family freedom and flourishing. “Every family deserves the opportunity to flourish and thrive and have the care situation that’s going to let them do that,” said Haspel.

My New America colleague Katherine Goldstein has spent the last year reporting on the care movement, including its strongest tactics and the hurdles it faces. Goldstein has seen economic arguments prove successful in garnering public investment in early childhood particularly at the state and local levels where the consequences of a lack of child care for work and economic opportunities are concrete and visible.

Goldstein reported on the success of a 2021 New Orleans ballot initiative that provided high quality through a small property tax increase. A few local business owners convinced of the need for a better-supported workforce became key champions of the initiative and helped defeat opposition from others in the business community.

As for the big economic numbers like the $122 billion ReadyNation says a lack of child care is costing the U.S., Goldstein is skeptical this kind of data alone will pull along any lawmaker who isn’t on board. “When you see those big numbers and you say, “Wow, that’s compelling. But it’s compelling because you’re already converted,” said Goldstein.

Unlike economic arguments specific to particular cities and their business and workforce communities, numbers in the billions can feel abstract. And policymakers at the federal level consider a whole slate of issues that have major economic implications. The question for the care movement is how to get legislative attention for this particular set of economically beneficial billion-dollar investments.

Goldstein thinks that the child care movement has all the evidence and sound arguments it needs. What it lacks is the political money and the voting blocs to force policymakers to care about and act for child care. For example, Goldstein found that when it came to the 2020 Build Back Better (BBB) legislation that would have massively overhauled the U.S.’s early care and learning systems, care organizations had just “1.4 percent of the lobbying spend compared to top business groups who opposed BBB.”

Jeannina Perez is director of Early Childhood for MomsRising, an online and grassroots advocacy organization that directly engages mothers to build a movement to influence and attract policymakers’ attention to these care issues. Perez says the economic data has different uses for different audiences, but that parents themselves are a key audience for it. “One of the key ways that we use this data is that it really helps working moms realize that the inability to find affordable child care isn’t a personal failing,” said Perez.

“People often don’t realize until they’re looking for child care, how incredibly difficult and expensive it is, and then they think, ‘What is wrong with me?’ And the economic data helps show that this is not a ‘you’ problem. This is a larger systemic failure.” When moms become convinced the problem they face is a systemic failure, Perez said, they are more confident to advocate for public policy solutions. It’s that growing movement of advocates for child care who ultimately will be tasked with not only convincing policymakers of the need for investment, but of pressuring them to take action.

All the advocates I spoke to about the economic case for child care agreed there’s no silver bullet argument that will get us to a well-funded, equitable and high-quality child care system. The economic data points are one of many tools the movement for child care has at its disposal, but they can’t replace a well-organized and well-funded political movement led by the people experiencing the crisis firsthand.

“The data tells us a story, but so do people,” said Perez. “People have a visceral experience of this day-in and day-out. We’ve made leaps and bounds in communicating what the cost of child care means for families. The good stuff takes time and care and love and energy. I have to believe that our elected leaders are going to do what’s right and come up with a comprehensive solution.”

A Top Priority for Generation Z? Child Care

Rebecca Gale — Tue, 19 Sep 2023 11:00:25 +0000

Kelly Choi crunched the numbers on child care, and the results didn’t look good. Like the majority —�� — of families raising young children, she and her husband both work full time and need child care for their 3-year-old daughter and 1-year-old son. Choi works for the Commonwealth of Pennsylvania as a graphic designer, a job she sought out because there was a child care benefit attached; workers could receive access to subsidized child care. Choi put herself on the waitlist before either child was born. But this benefit — analogous to other child care situations in this country — was first-come first-serve and demand exceeded supply. Choi didn’t get off the waitlist in time and had to make private arrangements.

Now, each month, she and her husband write a check for over $3,000 to the Goddard School, a private day care center in central Pennsylvania where they live. The monthly amount is more than their mortgage — it is the single biggest expense they have. “My husband is essentially working to pay for child care,” Choi explained.

Choi is in her 20s and identifies as Generation Z, and believes that child care is one of the most important benefits an employer can provide, just as much or even more so than health care benefits. She has contemplated making a job switch if it would make child care more affordable. She and her husband even looked into changing their work situation to stagger their hours, or have her work part time in the evenings, but both situations meant a significant stress on their life and the drop in earnings she would face offset any potential savings from not having to pay for child care.

But Choi and other members of Generation Z, who are born between 1997 and 2012 and are now beginning to have families of their own, represent a shift in the way child care is considered important. Notably, they are also shifting how they view an employer’s role to provide such care — either through direct subsidies or more generous benefits connected to young children, including paid family leave for both parents for the arrival of a new baby (and of course, paid sick days for when such babies and young children fall ill).

finds that Generation Z, more so than Millennials or Generation X, rated child care benefits as more important than health insurance in terms of workplace benefits. More than half of Generation Z parents polled said they would consider switching their jobs for on-site child care, and a third said they accepted a job that paid less in order to have more flexibility around child care. The Gen Z respondents of the study only included people who were 18 years or older and had at least one child (i.e., the younger subset of Generation Z wouldn’t have been included), but the results diverge widely enough from the older generations to show a difference.

Morgan Rentko, a research manager at the The Harris Poll Thought Leadership Practice, who facilitated the poll, says such results showing the shifting attitudes around work and child care were not surprising, given Covid and the rise of hybrid work. “Child care needs changed dramatically within that time,” she said. “Data shows that hybrid work is becoming an increasing reality for folks. It’s a preferred method of work, including for Generation Z, so it also follows that there are expectations for employers to provide child care benefits as well.”

This echoes , in which 81% of Millennials and Gen Zers identified access to affordable high-quality child care as an important issue, and 72% of respondents identified the lack of high-quality child care programs and their cost as a barrier to achieving their professional goals. : “The bottom line is that affordable child care is top of mind for young people in the United States and the lack of it is having a negative impact on their lives.”

Part of the evolving attitudes on child care can be attributed to the change in labor force demographics, explains Misty Heggeness, associate professor of public affairs and economics, University of Kansas. “When we look at Gen Z mothers today, those aged 18 to 26, we see a larger percentage of them in the labor force than past cohorts.” She points out that 60% of Gen Z moms work for pay — a larger percentage than Millennial mothers and Gen X mothers doing the same — at 58% and 54%, respectively.

“It would make sense that Gen Z might be more vocal today about, and supportive of, issues related to child care since not only are more of them working, — making it even more impossible to access,” Heggeness said.

Heggeness references a point articulated by Claudia Goldin in her 2022 book, Career and Family: the change in child care dynamics and pricing is coming at a point for Generation Z when they are engaging in building their careers, and they may be more incentivized to prioritize taking advantage of their university education and laying the groundwork for future career success and opportunities. This can be why Choi and her husband, who may have been able to save a few dollars by giving up one of their positions, may still opt to work to reap career gains and higher future incomes by paying for child care now.

Though with the demographic shift comes a change in expectations which could be the impetus needed to create the kind of child care infrastructure required so that parents are not overburdened, and providers and educators can make a living wage for their skilled work. In Brigid Schulte’s book, Overwhelmed: Work, Love and Play When No One Has the Time, an entire chapter is dedicated to the Comprehensive Child Development Act, a high-quality, national child care system that passed in the U.S. Congress with bipartisan support, only to die at the hands of a veto by President Nixon. The veto efforts were led by Pat Buchanan, a conservative politician who’d served in various Republican administrations. When Schulte went to interview him and asked if he and his wife divided their own child care responsibilities, he shrugged the question off — they’d never had kids. This was, in essence, a problem about which they knew nothing.

When then-state Sen., now U.S. Rep. Becca Balint into the Vermont State Legislature for the first time as a young mother, she recalls the surprise in hearing from her much older and predominantly male colleagues that child care was an issue affecting the workforce. It took that generation shift to create the mindset that child care was a priority — and now Vermont has .

Changing attitudes alone will not create the impetus for national change, but it’s a start. Rentko anticipates conducting more studies this year on changing parental attitudes surrounding school and child care. “As we enter an election time period, regardless of political affiliation — parents want the government to step up and provide some sort of support for child care,” Rentko said. “Seventy percent of people believe child care is at a crisis point, and 67% believe that our country cannot have a functional economy without child care, so most people are already there.”

American Rescue Plan Act Funds Are On The Way to Help Child Care Providers — But Will it Be Enough?

Rebecca Gale — Tue, 08 Aug 2023 12:56:14 +0000

Lourdie believes she has found her life’s work as a child care worker. She loves her work in the infant-toddler room at the Rainbow Riders Childcare Center in Blacksburg, Virginia, but she can barely make a living. She has two kids, ages eight and five, and is the sole provider for her household. She works full time, making under $17 an hour, yet she can barely pay her bills, so she is actively looking for a new position where she can earn a living wage.

“It’s not looking too good to stay in the [child care] profession right now,” said Lourdie, who requested her last name be withheld for privacy. “Do I stay in a position and go into debt, or ask my friends to help me out? Or do I start looking elsewhere?”

Lourdie’s mother moved from Haiti to live with her and help raise her children. The monthly rent they pay on their three bedroom, two-bath mobile home is $575. Lourdie said this had been affordable, but now her landlord needs the unit back and she will have to move. She fears her rent will skyrocket. “Anything else in that area is $900 and up, even for just one bedroom,” she said. Also, Lourdie graduated in 2014 with a bachelor’s degree from the University of Central Florida, which saddled her with $32,000 in student loans. She has had to defer payment each month because she doesn’t take home any extra funds to pay off her debt.

Since the onset of the pandemic, over 100,000 child care workers have left their jobs to go to retail or service industries to make more money. But caring for children is a job that requires specific skills, which have garnered more attention as scientists have placed a premium on the potential for a stimulating environment on a young, developing brain.

Lourdie knows she is lucky to make more than the $12 an hour prevailing minimum wage in the state of Virginia, but she estimates she will never be able to make more than $17 an hour working as a child care provider without an additional funding source. The time she spends worrying about her own bills is stressful and the worry and fear take a toll on her during the day, leaving her exhausted when she comes home. Yet she feels connected to the kids she cares for and doesn’t want to leave. “Children feel even the slightest change in their classroom,” she says of her work. But she has her own kids to raise, and needs to provide a roof over their heads. “Am I doing right by my own children?” she wonders. “It’s a tough question.��It’s really especially hard when you love what you do.”

Nationally, the average child care worker , and child care ranks at the bottom of all . Many workers on public income support like food stamps or Medicaid. Increasing the pay for child care providers like Lourdie is one of the top goals in the industry right now, especially as more workers look to leave for better paying jobs in retail or the service sector. Since the onset of the pandemic, have left their jobs to go to retail or service industries (including janitorial work) to make more money. But caring for children is a job that requires specific skills, which have garnered more attention as scientists have placed a premium on the potential for a stimulating environment on a young, developing brain.

The pandemic rocked the social safety nets of many – and it created a willingness for Congress in federal funding to support industries like child care, which had previously received scant support. The March 2020 Cares Act provided $3.5 billion in child care relief – the largest enacted relief effort to date; the May 2020 HEROES Act included $7 billion in child care funding, and the March 2021 American Rescue Plan Act included $39 billion for the child care industry. All of this contributed to keeping the child care industry — and centers like Rainbow Riders — afloat during the economic crisis of the pandemic.

Such economic relief makes fiscal and logical sense: child care centers cannot stay open without staff like Lourdie, and parents can’t work without reliable child care. But those funds, particularly the ARPA funds, have a dangerously looming cliff. Blacksburg can get an influx of funds for its child care workers, but it can’t count on this past 2024.

But even with this additional allocation of funds on the way to help child care workers like Lourdie, will it be enough?

Kristi Snyder, the owner and administrator of Rainbow Riders Childcare Center, a for-profit child care center in Blacksburg, has been an early childhood educator for over 35 years, says the current staffing crisis is “the worst” she’s ever seen.

“When I started in the early ’90s, we were getting college degree teachers, people coming out of universities who had B.S. degrees. Pay wasn’t great then either, but we were getting more qualified people,” she said. Student loans, she explains, are more prevalent now so college students graduate with debt similar to Lourdie. “They cannot afford to take a job that pays so low,” Snyder said.

“Some of our community colleges have dropped early childhood programs because their students graduate into a poverty-level industry. They are going to make poverty-level wages. We have to rebuild this industry,” Snyder says. “You would think after Covid that this is the time to do it. Because really it has been our staff and teachers who have subsidized child care for communities for decades.”

Snyder is part of a coalition of early educators and the Community Foundation of the New River Valley in Blacksburg who are working to shore up more support for early educators. Using funds from the American Rescue Plan, the Town of Blacksburg is allocating $1,150,000 toward a child care workforce project, led by the Community Foundation, to work with the 13 licensed child care providers in Blacksburg on teacher retention and recruitment.

Unlike about half the country, Blacksburg isn’t considered a child care desert. “We have enough physical child care centers [to meet demand] but we don’t have enough teachers,” said Jessica Wirgau, CEO of the Community Foundation of the New River Valley. “They are operating at about 50 to 60% of their licensed capacity, [and] could have twice as many children but they don’t have the teachers or support staff. That is primarily due to pay.”

Unlike other advanced peer nations that support the high cost of child care with robust public funding, the United States doesn’t. Aside from subsidies for very low-income families, most parents bear the full cost of finding and paying for the care. Many families can only afford to do so at such low levels that child care centers are , with providers being . Yet research shows that access to high quality child care — both for kindergarten readiness and long-term educational gains. Reliable child care boosts the economy because .��But even parents who can afford to send their child to a high quality child care may not have options to do so, particularly if they live in a like some of the areas surrounding Blacksburg in the Blue Ridge Mountains.

Blacksburg’s attempt to bring more funding to child care providers is one way to improve recruitment and retention for an industry that is struggling to keep employees at low wages.�� As outlined now, a portion of the funds will be used to provide stipends to teachers, administrators and support staff, and a portion of the funds will provide some flexibility to child care center directors to focus on other strategies in the areas of recruitment, retention and professional development.

But the funds have not yet arrived. The plan is that the first distribution will be available in October. Wirgau and her team are meeting with center directors in August and collecting data on enrollment, staff size and openings. Once that data is collected in September, they will be able to make the first financial awards.

Yet Snyder feels she can’t wait that long and maintain her existing workforce. There’s always been some attrition, she explains, especially since Blacksburg is a college town and people affiliated with Virginia Tech move in and out. But she has a 30-year employee that is getting ready to retire, and several more quality employees she says who can’t afford to stay. “They enjoy the work, they like our organization, they love working with young children and families but they cannot afford to stay in early care and education. So many other jobs that are paying better are much easier and less stressful, and they can go down the street to Chik-Fil-A and make $19 an hour, or Target at $18 an hour,” said Snyder.

And the stress and demands of jobs in early care and education are not for everyone. “It takes a special person to work with 12 2-year-olds. Not everyone can do those jobs,” Snyder said. She describes the ARPA funds the Center received to stay open during the Covid-19 pandemic as “a life buoy that kept things from sinking.” Snyder has been able to leverage those funds to compete with the rising minimum wage in Virginia, but even so, it’s still less than what many big box stores in her area pay.

“Even with the increase [from ARPA funds], the child care centers aren’t keeping up with what people are making in other jobs. More money is needed and flexible money is key,” Wirgau said. “There are restrictions on how it can be used, and that puts some additional burden on the child care centers, and it affects the rest of their workforce and business model. The more flexible it can be, the better.”

Even with the money slated to arrive this fall, it must be spent by July 2026, and then it will be up to New River Valley and the child care centers to find additional funds to keep salary levels at that same rate. Wirgau plans to work with local governments, businesses and higher education institutions to build the base of funding sources so that any program that is piloted with the ARPA funds will have the potential to be expanded or continued. “This project is proof of concept,” she said. “When you invest a million dollars focusing on child care, then you are able to serve more kids and have higher quality centers.”��By trying things out locally, “we can see if we can get some traction in a way that businesses and local governments will allocate funding to that as well.”

She points to an example in 2022, when the Community Foundation and Virginia Tech formed a partnership to host both in-person and virtual summits with business and government leaders each quarter. “Through these summits, we’ve shared ways that employers have supported child care in our region already, provided data on the impact of child care access to the broader economy, and begun engaging attendees in planning for the end of the ARPA dollars. We are trying to be as proactive as possible in developing local funding sources while creating a group of leaders who can be strong advocates for continued funding at the state and federal levels.”

For Lourdie, the increase in salary for her work as a child care provider can’t come soon enough, and she is not entirely sure she will still be there in the fall when the first payments are expected, especially without the certainty of how long the payments will continue. “I believe that if I were paid more, then I would know my needs are being taken care of. Then I can be focused, be 100% there, and not have to worry when I get home. Even now, I give it my all, then I get in my car and say, ‘what’s next?’ As soon as I get home, it’s ‘how am I going to pay the next bill?’”

Opinion: Child Care is Now Free for Some Families — Which Raises Some Questions!

Elliot Haspel — Tue, 01 Aug 2023 11:00:46 +0000

When I wrote my book Crawling Behind, the central question was this: why isn’t child care free? Having started my career in public education (I taught 4th grade many moons ago), it was bizarre to me to go from a fully publicly-funded, universal, tuition-free system to one that was pay-to-play based, seemingly, only on the age of the child served. So, it has been fascinating to watch a new trend emerge in recent years: child care is, in fact, becoming free for more families, and free care is becoming a feature of more policy proposals on both sides of the aisle. But… only for some families, and only in some situations. Let’s try to unpack the tortured logic that is leading to some bad and honestly weird outcomes. I’ll be frank that this is a column with more questions than answers!

First, the good news. If you’re a family of four in New Mexico making below about $120,000 a year, . Soon, If you’re a California family of four making under about $85,000 a year, . Soon, if you are a Vermont family of four making under about $53,000 a year, . In the last Congress, both the Build Back Better Act and the Republican (which garnered 14 GOP co-sponsors) included provisions that families making under 75% of their state median income could have child care for… you guessed it, free.

(Note I am intentionally saying “can be free” and not “is free.” We will get to that in a moment.)

This begs a remarkably under-asked question: why? Why should child care be free for some and not for others? If we’re going to draw a line between free and not-free, where does that line get drawn? As the examples above show, lines are being drawn, but in wildly different places. New Mexico uses 400% of the federal poverty line, Vermont uses 175% of the federal poverty line, California uses 75% of state median income. And when did we decide at the federal level that 75% of state median income was the ticket?

The first order question is why anyone should pay at all. Some goods and services—public schools, libraries, fire departments, national defense—have such positive societal benefits that we have determined there should be no user fee. Households and corporations instead pay into those systems through taxes. That is why Bill Gates can send his child to the local public school for free or check out a book at the local library for free, despite obviously being able to pay.

I think sometimes the digression into questions of whether these items fall under the technical economics definition of “public good” or “merit good” misses the point. Sometimes society takes one for the team so that there can be a team. Schools provide, among many other things, a commonly accessible experience and (aspirationally, at least) a common foundation of knowledge and skills. Libraries are enormously important sources of community. It is, on an almost ineffable level, good to know that the fire department will come to my house and the rich guy’s house.[1]

Early care and education is a gray area. Like, ultra-gray. Here’s how gray it is: depending on your child’s age and what type of setting they happen to attend, you may or may not have to pay. Universal pre-K programs—the truly universal ones, like Florida’s and Georgia’s—have no income check. Yet if your child misses the age cutoff by a minute, you’re out of luck. The difference between an August 31st birthday and a September 2nd birthday is the difference between free and many, many thousands of dollars.[2]

I’m going to suggest we need a coherent theory for why people should or should not pay for child care. The shrug-emoji approach makes it difficult to build a compelling case for transformative investments in child care.

Why? Just making child care less expensive for some people, along some seemingly arbitrary lines, falls into the trap of “deliverism.”[3] In , progressive stalwart Deepak Bhargava and colleagues explain why the theory of deliverism, “the presumption of a linear and direct relationship between economic policy and people’s political allegiances,” is wrong. Contrary to popular belief, helping ease people’s wallets—such as through the pandemic stimulus checks or the expanded child tax credit—is not on its own enough to build political will. Instead, Bhargava argues, “policies that deliver economic benefit without speaking to, reinforcing and constructing a social identity are likely to have little political impact.”

This assertion has big implications for child care. It is difficult to make a values-based case for universal provision if you’re focused on chopping up what benefits go to whom and when. Telling a story—you provide value to society, you deserve support in caring for your family so they can thrive, and those people over there are stopping you from getting it—works better when you have a simple way of explaining the benefit. That doesn’t necessarily mean it has to be universally free, but as Canada’s “$10 a Day” campaign shows, it does mean having an easily understood benefit for everyone.

That lack of identity-building can also impact the actual effectiveness of these policies. This is where that “can be free” vs. “is free” distinction comes in. One interesting finding from New Mexico’s expansion of eligibility for free care is that, so far, not that many middle class families are taking advantage. The Albuquerque Journal “about 76% of families receiving assistance are at or below 200% of the federal poverty line.” (Eligibility rose to 400% of FPL as of July 2021.) There are many different reasons for this—just making child care more affordable , and that supply needs to match preferences—but I have a supposition that many middle-class families do not yet see themselves belonging in a child care subsidy program. No one has told them why they do.

Not having an answer to “should child care be free,” and, if not, where should we draw the line?’ is thus becoming increasingly untenable. This isn’t a place where we want a thousand flowers to bloom any more than we want some states choosing to charge various amounts for fire service or middle school.
We need a clear answer that is grounded in philosophically sound reasoning. That path leads toward good politics and good policy.

[1] I won’t pretend there isn’t self-interest there — the fire at my house can spread to the rich guy’s house, and to be sure the fire truck coming to poorer areas. But you get my point.

[2] This schism is present even in major Democratic policy proposals like Build Back Better, which would have made pre-K free for three-and four-year-olds, but instituted a sliding scale for younger children and for care of pre-K aged kids outside of traditional hours. No one I’m aware of has made a detailed defense for why that should be the case.

[3] Based on conversations I’ve had with some of those involved, it’s worth noting that the Department of Health and Human Services’ oft-cited “7 percent of income” line for “affordability” did not come about out of some unimpeachable methodology but was intended more as a general guideline. In fact, HHS used to say that affordability was 10 percent of income; the line itself is malleable.

Minnesota Makes Major Strides on Behalf of Children and Families

Rebecca Gale — Tue, 25 Jul 2023 11:00:24 +0000

There are major changes coming for families in Minnesota.

That is how Representative Dave Pinto explains it. The Democratic legislator, who chairs the state House Committee on Children and Finance Policy, explained that Minnesota’s legislators came to an agreement to prioritize children and families when spending the state’s . Support for a variety of early childhood programs will be included in the new funding, including scholarships to pay for child care, more money to pay the educators, the creation of a brand new statewide paid family and medical leave program, and a child tax credit for lower-income families.��Minnesota will also create a new Department of Children, Youth and Families to support child care and early learning opportunities, and oversee many of these new initiatives.

Minnesota is putting in new spending toward early childhood initiatives. An additional $252 million for , which is an annual scholarship worth up to $8,500, will go toward the child care or early education program for two years. The goal is to cap child care spending to 7% of a families’ income, the national standard set to deem child care affordable.

Such a dramatic sea-change came about through several factors — including changes in the electorate and the budget surplus.

“As President Obama said, elections matter, and we were so very fortunate, we had a trifecta of a Democratic governor, a Democratic Senate, and House,” said Nancy Jost, co-chair of the state’s Prenatal to Three Coalition and director of early childhood at .

The $17 billion surplus, which was initially $10 billion, had gone unused in 2022, when a split House and Senate couldn’t come to a agreement and a tentative arrangement fell apart. The initial surplus had swelled with the additional federal funds from the American Rescue Plan. By the time Democrats came to control all three branches of state government,��legislators were ready to take action.

Had the Republicans won, explained Pinto, they were expected to use the surplus to fund tax cuts. Instead, myriad social programs were able to see record gains. “This administration prioritized kids and families. When folks make lists of things from the session, this is one of many, many issues that won,” he said.

Jost credits state advocates working together to form a unified front, and knowing that having strong agreement among one another would yield better results than fighting among themselves for a smaller piece of the pie.

Democratic Governor Tim Walz’s Administration had to make Minnesota the best state in the country to raise a family. Now, the state will join the that have enacted paid family and medical leave. Such programs — including contributing to healthy cognitive and emotional development, improving maternal health and enhancing families’ economic security. Paid family and medical leave also reduces the demand for child care in the early months of an infant’s life if a parent is able to care for the child. (Infant care can be some of the costliest and hard to find child care for many families. for an infant is, on average, 6% higher than the cost of serving a preschooler.)

The state is also investing in improving compensation for educators alongside creating a stronger pipeline to hire more. Over a two-year period, $5 million in state funding will be allocated to award grants for early childhood educator programs that recruit and prepare community members to enter the teaching profession. For the past two years, Minnesota previously used funds provided by the American Rescue Plan to provide monthly payments to child care centers to increase compensation for providers under the “Great Start Compensation Supports” program. Under the new budget, such payments will become permanent.

“We need to establish the principle and recognition that this work is a public good,” said Pinto. “We pay for early learning and care once a child is five; there is no reason we shouldn’t be doing that when a child is younger.” The job of a child care provider, he says, is the lowest wage you can get with a high school diploma, and it shouldn’t be.�� Pinto estimates the extra funds from this program translates to $400 extra per month for a full time employee.

In addition, Minnesota has created that is expected to . This follows the success of the created through the American Rescue Plan during the COVID-19 pandemic. The NTC lifted 2.9 million children out of poverty nationally, down from 9.7% in 2020 to 5.2% in 2021, the lowest rate on record. As one posited: “Without additional action by Congress to renew the expanded Child Tax Credit, we should expect higher child poverty in future years.”

Both Jost and Pinto acknowledge that there is work still left to be done, but that this has been a sea-change in the field. Minnesota is now joining a handful of states, including and , whose historic investments in child care will be part of the national conversation and possibly serve as a map for success for others.

“I’ve been in the field for 50 years. When I first started, there wasn’t any talk about policy in early childhood. As the years have gone by, we have gotten more and more organized. We have found our voices and are encouraged to talk about the things that families need. I think all of the things have progressed over the years,” said Jost. “We have a long way to go, but boy have we come a long way.”

Nearly Half of American Families Struggle to Afford Diapers

Bryce Covert — Tue, 11 Jul 2023 11:00:53 +0000

Jasmine Smith couldn’t have guessed the cascading effect her three-year-old daughter’s broken arm would have on their lives. The older woman who watched her daughter while Smith worked wouldn’t let her daughter return while her arm was in a cast. Smith had to leave her job as a substitute teacher for Buffalo Public Schools to care for her daughter.

Then Smith found out she was pregnant. To make some money she started watching two other children along with her daughter, but the further she got into her pregnancy the harder it was, and she eventually had to stop. The foregone income meant that she couldn’t afford to buy the things she needed for a new baby. She and her husband are separated and Smith is solely responsible for financially supporting both kids.

“At that point I really didn’t have anything,” Smith said. She hadn’t planned to have another child, so she had given everything of her older daughter’s away except a crib. She still needed not just a car seat, but smaller things like an outfit to bring her home in from the hospital. She simply couldn’t afford to buy diapers and wipes. “It was emotional for me because I was realizing, ‘I’m about to have a baby in a month or so… and I don’t have anything to even bring her home in,’ ” she said. “It was very scary because I didn’t know what I was going to do.”

Then Smith found what she calls a “blessing”: the diaper bank in Buffalo, New York. The executive director started sending supplies to Smith’s home: diapers, wipes, bottles, and even an outfit. “It was literally the very first thing, the only thing I had for my unborn child at the time,” she said. Seeing the packages arrive brought her to tears.

In a new survey of American families, the National Diaper Bank Network has found something alarming: diaper need has increased significantly since the last time it surveyed families in 2017. Today nearly half, or 47 percent, of families report not always having enough diapers to change their children as often as they would like, finding it difficult to afford buying diapers for their children, and/or running out of diapers because they couldn’t afford enough.

“It was embarrassing,” she said. “It’s a very humbling experience to have to ask somebody to help you provide for your family in that way.” But finding a resource that could help her get the necessities she needed to care for her new baby at least offered her relief. “I just looked at it like, ‘I can’t believe that somebody I don’t even know is helping me with something that’s so important to me,’” she said.

Smith is just one of millions of parents who struggle to afford diapers for their children. In a , the National Diaper Bank Network has found something alarming: diaper need has increased significantly since the last time it surveyed families in 2017. Today nearly half, or 47 percent, of families report not always having enough diapers to change their children as often as they would like, finding it difficult to afford buying diapers for their children, and/or running out of diapers because they couldn’t afford enough. That’s much higher than the who reported diaper need in 2017. With such high levels, perhaps it’s not surprising that the newest survey found diaper need among all income levels. It was very high for low-income households, two-thirds of whom had diaper need, but over a third of middle-income families and even 6 percent of high-income ones also dealt with it.

The survey of 1,000 families with a child under the age of four currently wearing diapers, which was conducted by YouGov, is comparable to the 2017 version, said Kelley Massengale, director of research and evaluation at the Diaper Bank of North Carolina. Both surveyed nationally representative groups of families — this survey based its demographics on the 2019 American Community Survey — using the same screening questions to identify those with diaper need. There was one change in the most recent version: clarifying that running out of diapers because a parent forgot to pack enough on an outing doesn’t qualify as diaper need; in this survey, language was added to make it clear it was about being able to afford enough.

When the pandemic hit and governments shut down businesses and enacted stay at home orders, families lost jobs and income, and diaper need rose sharply. “Diaper banks across the country responded to an unprecedented request for diapers,” Massengale said. “Many families experienced diaper need for the first time.” Even after the federal government launched a number of programs aimed at helping households remain financially whole, many families still struggled to buy basic needs. The new survey, conducted in April and May of this year, shows that those struggles continue. “It’s persistent,” Massengale said. Not to mention that most of the pandemic-era programs, from rental assistance and eviction moratoria to extra food stamp benefits to an increased Child Tax Credit, have all ended.

Increasing inflation, meanwhile, has been squeezing family budgets—the cost of diapers has risen along with food, rent, and other goods. All of this has meant that the crush of demand sparked by the start of the pandemic hasn’t eased. At the Diaper Bank of North Carolina, “it hasn’t stopped. It just hasn’t slowed down at all,” Massengale said. “We get calls daily asking where they can go for diapers.”

The survey also sheds light on what it means for families to experience diaper need. Among those who reported it, nearly half said they reduced their spending on other needs to afford them, the most common of which was entertainment outside of the home. That can mean a family forgoing a museum outing or the chance to see a movie in the theater. Perhaps more dire, however, was that over a third cut back on food, while one in five reduced spending on utilities. Over a quarter skipped meals so they could buy more diapers. “Parents are doing everything they can for their children,” said Joanne Goldblum, chief executive officer of the National Diaper Bank Network. “We have a system that is so barbaric that we expect parents not to eat in order to provide for the basic needs of their children.”

Diaper need also has a big impact on a family’s ability to work. Most child care centers require families to send their children with a set supply of diapers. Among those with diaper need, a quarter of parents and caregivers said they had to miss school or work because they didn’t have enough to send a child to child care. They had missed about five days, on average, in the month prior to the survey.

Diaper need also has mental health impacts. Seventy percent of those who reported diaper need said they were stressed or anxious about caregiving responsibilities, while over half felt judged as a bad parent or caregiver.

Smith is now back to work: she works part-time for Every Bottom Covered. But she’s still struggling to afford diapers and the other necessities her daughters need. “There are times when she may run out before I can afford to get her some more,” Smith said of her baby. She gets diapers through the diaper bank, but it’s a set amount every 30 days. She is sometimes forced to choose between the basics: paying rent, buying enough food, getting feminine products for herself, or buying diapers and wipes for her youngest. Sometimes she’s foregone feminine products and used some tissue instead so she could afford diapers. Sometimes she’s run out completely and had to use some extra blankets or sheets.

“It’s embarrassing and it makes you feel bad,” Smith said. “Mommy guilt is a real thing, to not be able to do essential things for your kids.”

Diaper need is not really a disease itself; it’s a symptom of how many American families live in such financial precarity that they can’t afford the most basic of necessities. “It is not logical to think that a family would only struggle with diaper need,” Goldblum said. The survey illustrates that “families are making untenable choices, and diapers are one of those things.”

The country made a different choice in 2021 when it expanded the Child Tax Credit, offering it to all low-income families, even those earning little to no income, sending it out monthly, and increasing the amount to $300 a month for children under age six and $250 for older ones. Child poverty by the end of the year, which meant families had more resources to afford all of their needs, including diapers. “The problem with poverty is not having the money you need,” Goldblum pointed out. These kind of payments lifted the burden of diaper need from far more families.

There are other big policy solutions Goldblum says would address the problem, such as universal, affordable child care and preschool — both of which would ease families’ budgets and therefore make more room to afford diapers — or a minimum wage that increases automatically with inflation so families’ pay can keep up with the cost of their needs.

One thing that won’t necessarily solve the problem: cloth diapers. They require families to do extra laundry — families who are already struggling to afford basics like laundry detergent or laundromat money. Plus, many child care providers won’t even accept cloth diapers given that soiled ones have to be stored for a parent to take back home. It’s therefore “not necessarily a solution that parents can access all the time,” Massengale said.

Smaller but meaningful solutions to diaper need could include adding federal funding to ensure every child care center that accepts subsidies is also given money to provide families with diapers. “That is something that could be done easily,” Goldblum said. “It’s a single budget line item.” The Temporary Assistance for Needy Families program, which provides qualifying low-income families with cash, could add a diaper credit, similar to in 2017. Federal buildings, homeless shelters and federally qualified health centers could have diapers to give away for free.

Some action has already been taken. In 2022, the federal Administration for Children and Families announced it would for the first time in grants to get more diapers to families struggling to afford them. have exempted diapers from sales tax, with more currently considering doing the same.

But it’s not clear when larger-scale relief will come. The expanded Child Tax Credit expired at the end of 2021, as one potent example, and lawmakers haven’t brought it back.

“There’s still not a unified response, on a policy level, to address child poverty in the United States,” Goldblum said.

Vermont Makes Child Care History with a Bipartisan Veto Override

Rebecca Gale — Tue, 27 Jun 2023 11:00:19 +0000

On Tuesday, June 20, Vermont’s state legislature met in a special legislative session to consider a bipartisan veto override of a number of state-wide priorities, including $125 million to shore up the state’s child care infrastructure. The House voted to override the Governor’s veto with 116 votes in favor; the Senate voted to override with 23 votes in favor, easily reaching the two-thirds majority threshold needed in both chambers to successfully override the Governor’s veto and bring about a historic funding increase for child care and early education.

In a country that lacks any federal infrastructure for child care, state efforts like Vermont’s are charting a course forward on what a more universal care economy could look like for families.

How did it happen? Vermont’s efforts come after a decade of advocacy, lobbying efforts and coalition building to shore up a strong majority in favor of universal child care in the state. The state’s aging workforce meant incentives were needed to – and the availability of stable, affordable child care for longer periods of time.

“The dynamic that played out in Vermont shows what is possible when you have committed legislators, cultivated over years by grassroots organizers, advocates and community members speaking out on the importance of comprehensive investments in child care. We’re seeing the importance of grassroots organizing and everyday peoples’ participation in elections making real, tangible change for the better. The boldness of this veto override is backed by the community.”

The money for the child care plan will expand the subsidies to families with incomes up to 575% of the federal poverty guidelines. In addition, Aly Richards, CEO of Let’s Grow Kids, was also set aside to increase pay for child care workers. This will be funded from a .44% payroll tax, which is split between employers and employees.

Vermont has caught national attention, particularly among advocates and educators, for its bold and comprehensive approach. The process to get the initiative over the finish line was unique as Vermont is the only state with a Democratic veto-proof majority and a Republican governor.

“The dynamic that played out in Vermont shows what is possible when you have committed legislators, cultivated over years by grassroots organizers, advocates and community members speaking out on the importance of comprehensive investments in child care,” said Nina Dastur, director of state and local policy for Community Change, a national racial and economic justice organization. “We’re seeing the importance of grassroots organizing and everyday peoples’ participation in elections making real, tangible change for the better. The boldness of this veto override is backed by the community.”

In his comments explaining his reason for his Veto, Governor Scott that he had used the $390 million in surplus revenue “to fund many of these shared priorities like child care, voluntary paid family and medical leave, housing, climate change mitigation, and more.” But the initial child care funding had been primarily geared toward families paying less for care. And while the lack of affordability is a crucial piece of the child care crisis, another aspect is the low wages that the providers make, or the very thin or nonexistent profit margins that child care centers face. The additional payroll tax funding is designed to boost wages for providers and increase the subsidy amount they receive for each child enrolled – allowing centers to compete for and retain staff, and to be more financially soluble long term.

Many early childhood education programs in Vermont had been reducing hours and limiting spaces to try and stay open, explained Christina Goodwin, board president of the Vermont Association for the Education of Young Children and executive director of Pine Forest Children’s Center. “This bill means programs like ours can offer more spots to more families. It means financial relief for families who attend our school. It also means stability, as we can pay teachers closer to a living wage and retain our talented early childhood educators.”

will go into effect beginning in summer 2023 with $20 million in one-time “readiness payments” to support child care programs in preparing for the expansion of the child care subsidy system. Then through new public investment in January 2024, programs will receive a 35% reimbursement rate increase. Providers will also receive reimbursements based on enrollment and not attendance, which can be crucial for providers for staffing and planning purposes, and critical for more vulnerable populations that are subject to disruptions. More changes continue through 2024, culminating with the child care subsidies reaching the state population at 575% of the federal poverty level in October 2024.

The success in Vermont took over a decade to come to fruition, but it’s possible that — similar to policies like paid family leave — other states can see Vermont’s actions as a model to emulate. “The public demand for child care legislation in Vermont is loud and clear and legislators heard that cry,” said Julie Kashen, director of the Women’s Economic Justice and senior fellow at The Century Fund, where she writes about child care policy. “When the public demand meets the political will, elected officials can overcome obstacles to lead the way on child care.”

Decline of Home-Based Child Care Options Sours Parents’ Perception of the Child Care Market

Natalie Renew — Wed, 07 Jun 2023 11:00:48 +0000

Home-based child care is the most prevalent form of child care in the United States and particularly for infants and toddlers. includes both licensed and certified providers who operate as small businesses, as well as family members, friends and neighbors who step in to support families with their child care needs (and are often exempt from regulation). The number of “listed home-based child care providers” (a term that includes licensed or certified family child care providers and state-connected family, friend and neighbor providers) has declined for over a decade. Research to date has assessed the decline and the . We have not previously understood the impact of this decline on families’ satisfaction with their child care options.

Researcher Winnie Li of Child Trends, photo with permission of W. Li.

In March, Child Trends researcher Winnie Li and her colleagues published that considers the impact of the decline of listed home-based child care providers on parental satisfaction with the child care market. I was excited to interview Winnie and to learn more about this study and the implications of her findings. I am hopeful this work can inspire additional research and inquiry around the effects of the decline of home-based child care on children and families.

Natalie Renew: Can you share a little about yourself and your work in early childhood research?

Winnie Li: I’m Winnie Li, a senior scientist at Child Trends, a nonprofit, non-partisan research organization dedicated to improving the lives of children and families. My focus lies primarily in the realm of early childhood policy research, where I leverage my expertise in data analysis to drive evidence-based policy making. A significant portion of my work also involves researching family access to child care, ensuring all families have equitable access to quality child care services. I believe that early childhood experiences shape the future of our society, and I’m passionate about contributing to this critical area.

Renew: Can you share a little background on this research study? Why did you select this topic? What were you hoping to understand?��

Li: Absolutely. In 2019, my colleagues and I noticed an alarming trend in data from the National Survey of Early Care and Education: the number of home-based child care (HBCC) providers listed on state administrative lists had declined by 25 percent nationwide over the past decade. This sparked our interest, given the vital role HBCC providers play in caring for nearly a third of children under age five in the United States.

We were deeply intrigued and concerned about the potential repercussions of this decline on the child care market. Specifically, our objective was to examine its impact on families’ perceptions of child care access. The dwindling number of HBCC providers raised serious questions for us:

Would parents begin to perceive early childhood education as less affordable and equitable?
Would there be a rise in families’ dissatisfaction with the quality of child care?
Would they start feeling that their needs were not adequately met?

These questions served as the impetus for our research study, pushing us to delve deeper into understanding the shifting dynamics of the child care market and its implications on families.

Renew: What are the key findings of this study?

Li: Our analysis showed that there was a severe decline in HBCC providers from 2010 to 2019 in almost every state. New Mexico saw the largest decline, with only 47% of the HBCC providers remaining in 2019 as compared to 2010.

Our analysis revealed an intriguing pattern: the decrease in HBCC providers correlated with a rise in negative public reviews left online by parents, even after we accounted for a number of factors, such as the number of children and the number of center-based providers in the state. The strongest association was observed in relation to cost. On average, for every drop of 1,000 HBCC providers in a state, we saw an increase of roughly 2 negative reviews on cost. This underscores the impact of the decline in HBCC providers on public sentiment, especially concerning affordability.

Renew: What are the causes of the decline of care in so many states? Does your study help us understand these causes?

Li: While our study sheds light on the decline in HBCC providers and its implications, pinpointing the precise causes of this decline wasn’t our primary objective. The specific policies, economic conditions or initiatives that might be driving this decrease in HBCC providers across states would require further, more specialized research. However, it’s crucial that future research explores this question to fully comprehend the dynamics at play and develop effective solutions.

Renew: How do you interpret these findings? What are your takeaways? What surprised you in what you found?

Li: Our results draw a clear link between the decline in HBCC providers and parental dissatisfaction. These findings underscore the critical need for policy initiatives that address the root causes behind the shrinking number of HBCC providers, while simultaneously advancing child care quality.

The takeaways from our study emphasize the importance of ensuring that families have access to a broad array of high-quality child care options. Access to high-quality child care has wider implications for the health and well-being of our communities, not just the children receiving child care services.

What surprised us in our findings was the direct correlation between the decline of HBCC providers and the rise in public dissatisfaction, particularly concerning cost. It demonstrates a clear indication of the latent pressures families face in accessing affordable and quality child care.

“Our results draw a clear link between the decline in HBCC providers and parental dissatisfaction. These findings underscore the critical need for policy initiatives that address the root causes behind the shrinking number of HBCC providers, while simultaneously advancing child care quality.” — Winnie Li, Senior Scientist, Child Trends

Renew: What are some of the limitations of the study? What would you have wanted to explore further that you were not able to?

Li: Our study has two limitations that are important to note. One is on the data source, and the other is on the methodology of topic analysis. Our study relied on publicly available English-language online reviews, which might not holistically reflect the experiences and perceptions of all parents. It’s plausible that certain groups may be more inclined to leave online reviews than others, potentially skewing the results.

Secondly, our study relied on the use of topic analysis to categorize the reviews into different access dimensions. While this approach has the advantage of being able to handle large volumes of text data, it is subject to potential biases and limitations, such as the difficulty in accurately categorizing complex or nuanced reviews.

Renew: Much of the research work of this study was going on during the pandemic at a time when the role of child care was elevated in the national media and immediately felt among many families including my own. What was it like working on this project during that time?

Li: Indeed, the pandemic has served as a stark reminder of the critical role that child care plays, not just for families, but for the broader economy as well.

On a personal level, the pandemic influenced my own child care decisions. Due to safety concerns, I transitioned my then 3-year-old from a larger, center-based child care provider to a home-based child care.

This experience gave me firsthand insight into the importance of home-based child care. It is a constant reminder of how important this work is and it underscored the importance of our research on HBCC providers in shaping a resilient and equitable child care system during and beyond the pandemic.

Renew: I believe your research offers important and previously unstudied insights on the effects on parents of policies and practices that have resulted in the decline of home-based care. Where would you hope to go next with this research? What other questions might further develop insight into this critical issue?

Li: I agree that our research has brought to light some previously unexplored effects on parents of policies and practices resulting in the decline of HBCC. Building on these insights, we could delve deeper into this issue and understand the differences in parents’ perceptions of home-based versus center-based child care providers.

We could also compare and analyze differences in utilization and topics mentioned across different income groups. We also want to uncover parents’ perceptions and preferences around child care services, particularly their experiences with home-based and center-based providers.

By exploring the unique attributes of HBCC providers and diving into parents’ preferences, our findings could inform strategies to better support and enhance the home-based child care sector. This, in turn, could benefit parents, children and communities alike.

Think Child Care is Hard to Find? Try Being a Parent Who Works Early Mornings, Late Nights or Weekends

Bryce Covert — Wed, 17 May 2023 11:00:15 +0000

It’s hard enough to find child care in this country that is dependable and affordable when working a regular 9 to 5 job. of American counties are child care deserts where it’s nearly impossible to find a slot, while prices are across most of the country.

But what about parents who work shifts outside of daytime hours or on the weekends? There are barely any feasible options for them, and the lack of accessible care often pushes them to cut back at work or give up on better paying jobs.

Ashley (whose name was changed to protect her identity) lives with her three children in Austin, Texas and works at a factory that makes car parts. Her job requires her to start early in the morning and sometimes on the weekends. When she works weekends, she has to ask family members to let her children stay with them, but she can’t set up a reliable arrangement because her hours continually change, so she often has to ask several people before she can find someone who can do it. She drives as much as 40 minutes one way to get her children to a trustworthy family member who’s available, and if they’re late she gets docked attendance points — if she gets too many points she could be disciplined or even fired.

She’s been able to get early morning care on weekdays at the child care center she trusts. But she would love to get promoted to a supervisor position at work, which would mean getting to work even earlier in the morning, earlier than her center opens. The inability to find reliable, trustworthy care outside of traditional working hours has kept her from advancing her career and making more money for her family.

“I wish there were day cares that opened earlier, because I can’t move up in the company, like become a lead or a supervisor or anything,” she said. “I would have to be at work at 6:00 [a.m.]. The earliest the day care opens is 6:00 a.m.”

Ashley’s story is included in looking at families’ need for child care during nontraditional hours in Travis County, where Austin is located. The researchers found that in Austin about a third of children under the age of six live in a household where all the parents work nontraditional hours — between 6pm and 7am on weekdays or anytime on the weekends — which comes to 18,000 children. It affects vulnerable groups the most. of Black children and 42 percent of Hispanic children live in such families. About two-thirds of these families live below the federal poverty line, and nearly three-quarters of parents working these jobs are immigrants.

Despite the high need for care during nontraditional hours, only 62 child care providers in Austin, or of the total, including both centers and in-home providers, have a license to operate outside of normal hours. That means there are a mere 2,000 spots at these times, far less than the number of children whose parents need this care. “There’s a substantial gap between this need and regulated supply,” said Diane Schilder, a senior fellow at the Urban Institute who co-wrote the research.

The researchers found that in Austin about a third of children under the age of six live in a household where all the parents work nontraditional hours —between 6pm and 7am on weekdays or anytime on the weekends — which comes to 18,000 children.
From the New Practice Lab’s Bolstering State and Local Care Infrastructure with Federal Recovery Funding

And just because a provider has a license to operate outside of traditional hours, that doesn’t mean they offer the care that these families need. Only two providers in the county provide overnight care, and just 15 offer it on weekends. Even those who have extended hours during the week don’t typically do it for long: most offer just an extra hour in the morning, and only a few offer an extra hour in the evening. “Just because they’re licensed to operate during that time doesn’t mean that they do,” Schilder said.

The findings in Austin are for one city, but Urban Institute researchers have looked at other places across the country and came up with similar findings. “Overall the patterns are very similar,” Schilder said. When Urban Institute researchers focused on Connecticut, Oklahoma and Washington, D.C., they found that of children under the age of six lived in a family where all adults were working outside of traditional work hours. Parents in these places on family and friends to watch their children during early or late hours or on weekends despite often using a more formal setting during weekdays.

Nationally, Urban Institute researchers that 40 percent of children under the age of 6 were in some kind of nonparental care during nontraditional hours, including nearly half of Black children and about half of those living in families with income below the poverty level. These kids were to be cared for by family or friends and less likely to be in a center. Only of in-home child care providers and a mere 8 percent of child care centers across the country are open during these outside hours.

When parents can’t get licensed care when they work afterhours or on weekends, “often they are making informal arrangements with family members and friends,” Schilder said. Many “develop a patchwork of care,” noted Dawn Dow, a principal research associate at the Urban Institute and co-author of the Austin research. That may work out for some, but asking family to care for a child can place a burden on them, making it harder for those relatives to pursue their own economic opportunities.

Some parents simply can’t swing it and have to give up on work that they need. The researchers “spoke with a number of parents who described changing their work hours and constraining their economic opportunities because of a lack of care,” Schilder said.

“There are parents who are foregoing opportunities for more lucrative jobs,” Dow said. A parent might be interested in becoming an emergency room nurse, for example, which would pay better than, say, a retail job. But the hours are unpredictable and often don’t line up with typical child care hours, so she may decide against the switch.

“Sometimes it feels like I’m choosing between my kid and my career,” one parent told them. “I don’t really want to work as a school nurse, but it’s one of the only things that works with my daughter’s schedule.”

It’s certainly not easy to offer this kind of care. Child care providers are currently experiencing an acute staffing shortage, and it’s an even harder sell to get people to work early, late or on weekends. “It’s a very physical job picking up young children and caring for all of their needs,” Schilder said. Doing it for even longer hours, especially if a provider is all alone, can feel impossible.

If a provider is caring for children who receive subsidies during nontraditional hours, those subsidies are so low that the provider might only get a couple of extra dollars for being open early or late, which “can be prohibitive,” Schilder said, especially if there are only one or two children but a provider still has to pay a full-time employee to watch them.

Meanwhile, many parents who work these odd hours also don’t tend to have consistent schedules and therefore a consistent need for this kind of care. They may not even get their schedules until a few weeks or even days in advance. of hourly service sector workers have variable work schedules, and 60 percent receive their schedules with less than two weeks’ notice. “Their need is intermittent,” Dow said. They may just need help covering a night or weekend shift once every few weeks. “Which means the provider doesn’t always consistently have the same number of children,” she said, “which makes it financially not feasible for them.”

There are regulatory challenges, too. Some providers told Schilder and Dow that if a licensing inspector came at a nontraditional hour but there were no children needing that care that day, the provider was told to cut back on those hours. “It became a negative cycle,” Schilder said.

There are some potential solutions. States and the federal government could provide higher subsidy reimbursement rates for nontraditional hours so that they actually cover the cost of providing this care. Austin is piloting a shared services alliance, which allows in-home child care providers to share information and resources, and it could include information on who can offer afterhours care so that parents have more of a network to fall back on. Fair scheduling mandates, meanwhile, such as in Oregon state as well as Chicago, Los Angeles, New York, San Francisco and other cities, would ensure that parents have enough of a heads up that they’re able to secure care for any morning, night, or weekend shifts.

Will Biden’s First Term Have a Lasting Impact on the Child Care Sector?

Bryce Covert — Wed, 05 Apr 2023 11:00:16 +0000

The race to elect the next president hasn’t officially started, but soon President Joe Biden will turn toward defending his seat in the White House. As he does so, he’s likely to talk about what he’s done for the child care and early childhood education sector. And while the vision he had championed for a large, federal investment in creating a more affordable, accessible system hasn’t become reality, there are many things he’s done and overseen that will leave a lasting mark well beyond his presidency.

“Biden has been the caregiver-in-chief in terms of championing these issues,” said Melissa Boteach, vice president for income security and child care/early learning at the National Women’s Law Center. “This administration has really been a standout leader on child care.”

Biden recently released his annual budget, which over 10 years to child care and early childhood education. , that funding would allow states to expand child care for more than 16 million children while ensuring that low-income families get care for free and families earning up to $200,000 would pay no more than $10 a day for each child. It would also send states money to provide high-quality, universal, free preschool in a variety of settings for all four-year-olds, and after states accomplished that they would also be able to expand it to three-year-olds.

On top of those funds, the budget would also spend $22.5 billion on existing child care and early education programs, including a $1 billion increase for the Child Care and Development Block Grant over what Congress approved at the end of last year. It puts an extra $1.1 billion into Head Start and $45 million into Preschool Development Grants to states.

It’s “the largest investment that’s ever been made in a president’s budget,” Boteach said. “This budget is setting a goalpost.” Despite the fact that Biden’s attempt to include for child care over three years in his Build Back Better plan ultimately failed, his budget calls for even more funding than that. “He’s building upon the commitment, not backing away from it,” she said.

The budget also “shows you can reduce the deficit,” Boteach pointed out, “and still invest in child care if you do the popular step of taxing corporations and wealthy individuals.”

Still, presidential budgets, while telegraphing an administration’s priorities and values, rarely get enacted as-is, and there is little chance that Congress will pass legislation to match the child care and early childhood education funding Biden’s included. Still, he has overseen some other concrete changes for the sector.

Last year, Congress passed the CHIPS and Science Act, which creates $39 billion in incentives to build semiconductor plans in the U.S. The Commerce Department has since for companies that seek those incentives, and is one that they outline how they will ensure child care for their employees and “strongly consider defraying the price of care such that it is within reach for low- and medium-income households.” Companies will be some of the subsidy money they receive to meet that requirement, such as building on-site child care facilities, giving workers money to afford care or investing in existing providers to ensure they have enough slots.

The effects of the requirement will be small. It’s not likely to do much to address the crisis roiling the sector in which providers can’t hire and retain enough employees, leaving people who need care .

Some worry that it will also misalign with policy goals. “This is not the optimal way to do child care policy,” said Chris Herbst, associate professor at Arizona State University who studies the child care industry. “Industry-targeted child care policy is not what the market needs.” He is concerned that, because the money goes to people who work at semiconductor plants, it will go to higher earning workers, “which is inefficient, and feels inequitable as well,” he said. They are likely already paying for child care out of pocket, so this money will just replace what they were already spending. “We’re not going to bring anybody new into the labor market as a result,” he said. “We’re not going to expose any new kids to high-quality child care.” It also leaves out anyone in school or training programs who need child care while they learn, even if their ultimate aim is to get a semiconductor job.

Boteach sees it as a worthwhile marker, however. “It sends an important message that child care is economic policy,” she said.

She acknowledges it won’t have an impact on the sector “at scale.” But many of the workers who will be employed at new semiconductor and other plants that get the CHIPS funding will need child care—especially if these companies plan to attract women to these jobs—and Boteach sees this requirement as a way to ensure that the increased demand doesn’t disrupt existing child care markets. “If all of a sudden you have all these workers coming in to build the plant and operate the plant,” she said, and they’re trying to find slots for their kids without any extra supply, “it’s going to drive up prices and push out some of the families who use child care locally.”

“This is about providing a point of planning,” Boteach said.

What is already having a much larger impact is funding that Biden signed into law at the start of his term: the American Rescue Plan Act, which included $39 billion for the sector, the amount of funding the child care industry had ever received in the country’s history. “It was huge,” Boteach said with a laugh. have received stabilization grants made possible by the money, and say it helped them stay open. An stayed open that would have otherwise closed.

The money also helped prompt states to with child care innovations, from giving providers healthcare and retirement benefits in Oregon to offering subsidies to nearly all residents in New Mexico to waiving parent copays in Indiana. “The amount of innovation on child care right now is really exciting,” Herbst said. Those experiments are at risk of being erased when the money runs out this year and next. Still, “There’s going to be a tremendous amount of learning that happens as a result of all of this experimentation that may work its way back up to the federal level and find its way into legislation,” Herbst said. “That will ultimately improve the quality of our debate whenever we have another serious debate about this at the federal level.”

States at least have one ongoing pot of money that they can turn to, a pot that’s even bigger now. In December, Biden signed an appropriations bill into law that included for the Child Care and Development Block Grant, a $1.9 billion increase over last year’s funding, representing the second-largest increase in the grant’s history. Boteach called it “historic.”

Ultimately, although child care and early childhood investments were stripped out of Democrats’ reconciliation package, both Herbst and Boteach remain positive about where the issue stands. “I’m actually more optimistic than I have been in a while,” Herbst said.

The pandemic forever changed the way the country views care. “Between parents and businesses and people who are caregivers in general, you can’t really unsee the last few years,” Boteach said.

The debate over Build Back Better, meanwhile, “changed the debate, and it moved it forward,” Boteach said. “We have moved from child care being a nice to have to a political imperative.” The country got closer than it had in a half century to investing in a robust, national child care system. It used to be that advocates like Boteach had to push candidates for office at both federal and state levels to “really embrace and have a plan on this,” she said. “It’s a default now that you need to have a robust and long-term plan to address this country’s child care crisis to be a serious candidate. That’s a huge step forward.”

“I really do think we’re having a moment,” Herbst said. “We are in a drastically different spot than we were even just a few years ago.” Child care legislation will keep getting reintroduced, he said, and each time it’ll improve on the last. “One of these days we’ll get it.”