And a Breakdown of the Unsustainable Financial Model
Written By: Christy S. Renjilian
The future of early childhood education (ECE) is bleak without significant revisions to how we fund and support our youngest children and their families.
It’s evident that the childcare sector is a crucial, yet underfunded part of the American economy.
It funds jobs and pays the bills for millions of Americans. One in every 110 U.S. workers – and one in every 55 working women – makes a living in some part of the early childhood education sector.
And for those working in every other industry, finding and paying for quality child care is a two-fold problem. There is a shortage of child care spots and families are struggling to keep up with rising prices.
In Pennsylvania, 57 percent of all residents live in a child care desert, defined as an area where there are more than three times as many children as licensed child care slots. [Source: American Progress] Typically, availability is especially limited for families who have infants and toddlers, work evening and night shifts, or live in rural areas. [Source: New America]
These problems then ripple in the workforce. The 2018-2019 National Survey of Children’s Health reported that the parents of two million children under the age of 5 “had to quit a job, not take a job, or greatly change their job because of problems with child care.”
The staffing crisis in ECE, while it has always been a challenge, has become much worse.
We want qualified teachers teaching our youngest minds, but ECE teachers often make half as much as K-12 teachers, even with the same level of college degree or experience.
This results in a constant drain of ECE staff, who upon earning their teaching certificate leave for the K-12 system, mostly for purely financial reasons. And this turnover rate directly contributes to lower-quality care. Currently, only 39 percent of all child care in Pennsylvania meets high-quality standards. [Source: Pennsylvania Partnerships for Children]
And you really can’t blame them. Nearly half of all child care teachers qualify for and utilize public assistance programs such as TANF, SNAP and CHIP because their wages aren’t sufficient to pay their bills.
Approximately 95% of the child care workforce are women and over one-third are women of color, both groups who are historically underpaid and undervalued.
Since its inception, the ECE industry’s financial model has been unsustainable and supported by poverty-level wages for the staff. The funds were insufficient before COVID, and the COVID crisis has made the situation more dire.
Even with the influx of CARES and ARPA funds, many facilities could not solve the underlying problems. While these infusions of funds have helped keep the doors open and provided much-needed stipends to try and retain teachers, it is not a permanent solution.
There needs to be a real change in how ECE staff are paid and appreciated if we want to solve this child care crisis.
The Financial Model
The average family, with at least one child under the age of five, needs to devote about 13% of their income to pay for child care. This is a number that is unattainable for most families.
But according to the U.S. Department of Health and Human Services (HHS), child care is considered affordable if it costs families no more than 7 percent of their income.
Poor families who might not have access to federally funded programs and instead independently pay for care spent approximately 30 percent of their income on child care—considerably more than the national average. Moreover, 95 percent of low-income working families would need to spend more than the federal affordability benchmark of 7 percent on licensed child care. [Source: American Progress]
Now you may be thinking, what about public support services? Unfortunately, less than 20% of children who qualify for public assistance for child care receive services due to a lack of funding and availability.
Currently, there is no public funding for ECE except for low-income families.
In PA, Early Head Start, Head Start, and Pre-K Counts are free for families making less than approximately $28,000 for a family of four. Child Care Works assists low-income, working families in paying for child care that make less than 200% of the Federal Poverty Guidelines.
If families make more than these upper limits or don’t meet other eligibility criteria, even if just by making $5 too much per year, they are ineligible.
Everyone has heard stories or perhaps lived it themselves, of families—at incomes that make them ineligible for assistance—struggling to pay for child care.
Families often do a “cost-benefit analysis” to determine if it makes financial sense for them to work. In many cases, what they would pay in child care, particularly if they have multiple children, is greater than their salary.
Therefore, It makes financial sense for someone to stay home. But this means that they also lose other perks of working like benefits, retirement, health insurance, etc. It also means that their child won’t receive the benefits of attending a high-quality ECE program.
The Workforce Impact
COVID has shown us, particularly in the business community, that without child care, our ability to recruit and retain workers is impacted.
A PA study, completed in 2019 long before COVID, showed a $2.5 billion impact on the PA economy each year due to workers’ inability to find and enroll their children in quality ECE programs. And throughout the COVID pandemic, it’s only gotten worse.
A recent report titled Growing Tomorrow’s Economy Means Investing in Child Care Today put the number at $600 million lost by Pennsylvania employers annually due to child care challenges faced by their workforce. It indicated one-third of parents report having to reduce their work hours or turn down further education or training because of child care needs. Almost one-quarter turned down job offers or went from full-time to part-time work. One-in-six reported rejecting a promotion or quitting a job due to insufficient child care.
According to the Child Care Aware of America report, Demanding Change: Repairing our Child Care System, “The pandemic illuminated how indispensable child care is for the well-being and economic security of our children, families, and communities, while simultaneously revealing the system’s many shortcomings”.
This makes the necessity of high-quality child care a “no-brainer.”
And it’s not just a loss in the workforce. We also see the impacts in dollars spent on social services throughout the lifespan.
Study after study after study, by economists, military leaders, and researchers, shows that for every dollar we invest in high-quality ECE, we can save between $7 and $13 dollars in costs associated with special education, truancy, juvenile delinquency, addiction issues, incarceration, health costs, and on and on.
We know this data to be accurate and true. Decades of researchers have proven it.
All of this information leaves us with so many questions.
Why is it we don’t want to act on what we know?
Why would we instead continue to pay $13 from our “collective public pot of funds” than $1?
If you ask people if they want to pay $1 for a gallon of gas or $13 for a gallon of gas, no one answers $13. And yet by not investing in high-quality ECE, we continue to pay that $13.
Why is it that during the first few years with the lowest staff-to-child ratio, we don’t help all families with the costs associated with education?
The current model has decided that it’s okay to pay degreed, certified teachers, on average, $11 per hour. And even at that disrespectfully low wage, families still can’t afford the cost of care. Why is that what we want for our children and our fellow workers?
Often one sees the comparison between the average cost of infant care ($11,500) and tuition at a public college ($14,500).
While the intent is to point out the high cost of infant care, (which is true) the comparison is quite flawed.
An infant teacher can only care for four children which equates to $46,000 TOTAL in funds supporting that teacher’s salary, benefits, and the operating and supply costs for that classroom.
You will never see a college professor, however, who only has four students. According to Penn State’s 2021-2022 Common Data Set, the average class size is approximately 30 students. Most professors teach six classes per year. So that’s 180 students supporting one professor. Or $2,610,000 supporting that teacher’s salary and benefits and operating costs.
And then you add in public funding, alumni giving, endowments, and revenue from the athletic programs. That’s $46,000 supporting the infant teacher and well over $2.5 million supporting that college professor.
When you look at the stark difference in the numbers supporting those scenarios, you can see why it’s a skewed comparison. Child care programs are not able to pay their workers well, and when teacher after teacher leaves, they have to shut down their program.
Families struggle to pay $11,500 per year, just like many families struggle to figure out how to pay for college tuition. But there are so many scholarships, work-study programs, and other grants that can help with college fees. The lack of outside assistance in ECE continues the ripple effect on the workforce and economy.
If we don’t come together, as concerned citizens, families, community and business leaders, and elected officials to overhaul the ECE system, it is possible that the whole ECE system may collapse.
And it will bring down our local economies with it. In my 30-plus years of working in the field, I have never seen a staffing crisis this bad. The number of programs closing is on the rise and the morale seems to be at an all-time low.
It’s not hyperbole to think the field is at a breaking point.
While this can all sound scary, there are steps that we can take to effect real change. We can turn this around for our children. We must.
So stay tuned, my next blog will cover exactly what those steps are.
About Child Care Consultants, Inc.
Child Care Consultants, Inc. (CCC) is a nonprofit centered in the heart of Pennsylvania. They serve childcare providers and low-income families ‒ the ones that have been impacted the most by the pandemic.
For you and your business, CCC helps keep childcare options open for your employees ‒ saving missed work hours and lowering on-the-job stress levels. They work with early childhood education programs and home-based providers to improve the quality of care, ensuring that all children enter school ready to be successful.
Christy Renjilian serves as its Executive Director.
To learn more, visit childcareconsultants.org.