Communities Find Quality Daycare is No Child's Play

Experts Link Affordable Child Care to Economic Growth

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Jason Neises is community development coordinator at the Community Foundation of Greater Dubuque, Iowa.

Nicolas Hockenberry is assistant director of the Jackson County (Iowa) Economic Alliance.

Andy Sokolovich is the existing industry manager with the Clinton (Iowa) Regional Development Corporation.

Michelle Mannell is executive director of Spectrum Station Early Learning Center in downtown Kansas City, Mo.

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Posted: Wednesday, April 25, 2018 11:18 am

Finding a job, a safe place to live, and reliable transportation would seem to take care of life's big-picture necessities for most people… unless you’re a parent with young children.

That's when quality child care often leaps to the top of the list.

Sure, some working parents might have an easy option with a stay-at-home spouse or other family members willing to watch the children, at low or no cost. Others might have an employer that provides on-site child care, or a nearby daycare facility that is affordable and doesn’t have a long wait list. If all the stars align, some can create a patchwork of inexpensive or unpaid home care, along with before- and after-school programs that mesh with the workday.

But for many working parents, finding affordable child care can be a nightmare, and if the problem is systemic, it can have serious workforce and economic development consequences for communities struggling to grow.

Experts say people who are unable to enter the workforce because they lack affordable, quality child care may miss opportunities to enter the job market. That, in turn, keeps skilled, available workers out of the hiring pool.

On the flip side of the coin, there are those seeking jobs in an organized child care center or caring for a small number of children in their home. Some may be entrepreneurial, aiming to start their own organized child care center serving dozens of families. These scenarios can also lead to hurdles, as wages for most day care workers are very low, and regulations for child care providers around training and other factors are so rigorous they may shut out entrepreneurs.

For all of these disparate reasons, economic development, philanthropic and community organizations are including access to child care as a top need to sustain viable communities.

For example, in 2016, the Community Foundation of Greater Dubuque, Iowa (CFGD), conducted a needs assessment focused in part on child care services in their area. They found that when child care providers invested in living wages, facilities and professional development for workers, it drove up the costs of their services, making it unaffordable for the families who need them the most. Indeed, nearly half of parents who took the child care survey reported that child care responsibilities had caused them to turn down a job or work fewer hours.

Jason Neises, community development coordinator of the CFGD, said that stories from the region his organization serves feature "fragility" as a common factor. "Long waits at licensed centers create uncertainty," Neises said. That uncertainty is compounded because many in-home day care providers are considering retirement. That could mean that a parent with reliable daycare today might not have it next month, or next year." Neises also notes that child care providers have challenges finding qualified employees. "In every community we've heard concerns from providers about employee turnover, low wages, no benefits, and challenges to providing professional development."

In Jackson County, Iowa, just south of Dubuque and part of the area studied, child care is one of the first barriers families encounter when planning a move to the area. Nicolas Hockenberry of the Jackson County Economic Alliance said almost all providers in this rural county are at or near capacity, and parents struggle to find adequate in-home providers without having a personal connection. This shortage can be a major deterrent for families with young kids, or people who want to start a family.

"Families with young children may question whether it is feasible to stay in the area if they can't find child care. The alternative is for a parent to stay at home or find a family to help, which can strain a household's income without social support, of which most new residents have little. In extreme cases, the family may decide to move out of the county if they cannot find the care they need," Hockenberry said.

Andy Sokolovich is the existing industry manager with the Clinton Regional Development Corporation, about 70 miles south of Dubuque. The findings from the Dubuque area research did not surprise him, professionally or personally. As a single father living in a community where he doesn't have family, Sokolovich was able to overcome challenges to finding child care. Even though most of the providers he called had waiting lists, two had openings. However, he knows that shift workers in Clinton's manufacturing sector, if they have child-care needs, have a nearly impossible time taking late or overnight shifts unless they have family members able to help out.

"They have limited hours. If you work second shift or third shift it is hard, in this predominantly manufacturing area," Sokolovich said.

Sokolovich's observations are borne out by national research. The Committee for Economic Development of The Conference Board (CED) is a nonprofit, nonpartisan, business-led public policy organization. Its 2015 report Child Care in State Economies was published to aid policymakers and business leaders in better understanding the child care industry’s role in the economy. The analysis focuses on organized child care providers who typically offer care on a paid basis. It examines the child care industry’s effect on parents’ participation in the labor force, and provides extensive details regarding the industry’s economic impact, including: usage rates, the role of public funding, revenues, and business structure.

The CED argues that a well-educated workforce is required to support a strong economy, and that investing in early learning and development is the best foundation for human capital. They state that such investments have both immediate and long-term benefits to the individual child and society at large. For example, low-income children who have access to high quality child care are less likely to be retained in grade, less likely to be referred to special education, less likely to go to jail, more likely to graduate high school, and more likely to attend college – all leading to higher earnings. Research shows that a child’s earliest experiences affect brain development, that brain development is cumulative, and that the architecture of the brain can impede later language, cognitive, social, and emotional capacity.

Nationwide, according to this research, there are more than 61 million children under age 15, who may require paid child care services. These needs far exceed capacity for the approximately 750,000 child care establishments.

The CED presented data from all 50 states. Its research on Iowa reveals that the average annual cost of center-based infant care is $9,185. That means low-income families can be priced out of the licensed market and that middle-class families struggle with the cost – particularly for families with more than one young child.

Echoing Hockenberry's observation in Jackson County, Iowa, the CED noted the ability to attract and retain a qualified workforce that reliably comes to work and shows up focused on the job, is critical. However, the workforce reliability of parents with young children is affected by the child care settings they are able to arrange. The cost of care is often related to the quality of care and the quality of care is related to a child’s healthy development. Investing in quality child care today so that children start school ready to learn preempts a lifetime of remediation at a far higher cost.

In neighboring Missouri, CED calculates there are more than 1.1 million children under age 15 who may require paid child care services. The average annual cost of care for an infant is $8,736 in a child care center and $5,644 in a family child care home. The average annual cost of care for a 4-year-old is $6,074 in a child care center and $4,894 in a family child care home.

One organized child care provider in Kansas City operates a combination early learning and day care at locations around the five-county metropolitan area. Called Spectrum Station, it offers a complete program of early childhood development for infants through school age children, and has facilities on both sides of the Kansas/Missouri state line, which bisects the metro area. The Downtown Center is housed on two lower floors of a renovated 31-story building known as Commerce Tower, in the heart of Kansas City, Mo. Above them are 29 stories of mixed-use residential and commercial space, described as a "vertical neighborhood."

Center Director Michelle Mannell said this location addresses the needs of many in the area to find suitable paid childcare in neighborhoods where they live and work.

The Downtown Center has been open about a year. They are licensed for 220 children and currently have 125. Now that they are established, Mannell suspects that number will rise soon. She noted that many younger adults enjoy occupying rehabbed downtown condominiums, living in areas where there is a vibrant cultural scene. These people often hold professional jobs and work downtown, so this day care center is an easy option. However, most of the parents who work downtown and use the center live on the Kansas side of the metro area, many miles away. Mannell explained that Kansas has more complex licensing laws than Missouri. That means there are fewer organized day care options in Kansas, and longer wait lists, compared to Missouri.

Mannell admitted that as a "suburban girl" she had some questions about running a child care center in an urban environment. "I was pleasantly surprised," she said. "The neighborhood was very welcoming, making a comfortable space for us downtown." There is a street car stop right outside the front door of Commerce Tower and that's the transportation they use to take the children on group outings. "This keeps the kiddos off city buses, and the drivers know the children and watch out for their safety," Mannell said.

Finding employees in this downtown location has been a bit different than in some of Spectrum Station's suburban locations. Mannell said downtown tends to be a place where job seekers go door to door filling out applications. However, she cannot simply make "convenience" hires. Instead, there is a multi-step process of application, interview, observation, staff interaction and training to see how well the person can manage the program and connect with the kids. "We have to have what is best for our families," Mannell said.

The center's operating hours are 6 a.m. to 6 p.m., not accommodating shift workers. She said in her many years of working in this field she has noticed that people who work later shifts tend to not want to leave their children in a program. "They are much more comfortable having their kids overnight with family members or friends."

Currently, the Downtown Center has 34 employees and four managers, two per floor. "We pay at the higher end of the scale," she said. "We have to be competitive with the salary for degree teachers. Our owners have been gracious with a competitive pay scale."

At the same time, the Downtown Center has expenses it has to meet to stay in the area. "I think it goes without saying that our rates are higher than most of your smaller child care centers, but we're pretty competitive with those that offer similar programming and curriculum, long term staffing and high-end equipment and supplies. For us, I think the big challenge will be how to keep tuition rates and increases to a minimum with daily parking validation for parents and annual CAM (Common Area Maintenance) charge increases for a structure of this size. These are just two of the major costs that we face running an urban vertical neighborhood facility," Mannell said.

For those interested in starting their own day care center on a smaller scale, there are some resources for getting started. Many states have agencies that support new registered day care providers.

In the end, dropping off the kids with "Grandma" may be the best option for young families. But communities that provide appropriate choices for child care are more likely to keep people in the workforce who want to be there, and help children prepare for the demands of the educational system they'll be entering in the next phase of their lives.

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