'Crisis level': Child care providers grapple with a worker shortage as federal relief is slow to help
WASHINGTON – White Birch Child Care Center in Henniker, New Hampshire, saw 16 staff members leave this year for a range of reasons varying from pregnancy or job stress to finding a better job or another career entirely.
Seven or eight years ago, a Craigslist posting would bring in 15 resumés to fill that loss, but a job site ad today might yield only two responses, said Marc McMurphy, the center's executive director. With barely enough employees, McMurphy is constantly trying to find cover if an employee calls in sick or wants to take a vacation, further straining an overworked staff.
Historic, pandemic-fueled worker shortages constrain virtually all industries, but child care has been hit harder than most. The sector laid off or furloughed 373,000 employees, or 36% of its workforce, as day care centers closed in the early days of the coronavirus pandemic, Labor Department figures show. About 70% of those jobs have come back, meaning child care is still missing 109,000 workers.
By contrast, the economy overall has recovered 78% of the jobs wiped out in the spring last year, and restaurants and bars – which lost nearly half their workforce – recouped 84% of those positions.
Though schools reopened this fall, child care providers such as McMurphy struggle to keep up with demand as workers leave for jobs with higher wages and better benefits – or to resolve their own child care concerns. The industry has long grappled with retention, but the pandemic has magnified the problem, forcing providers running on tight margins to turn away children or increase costs on parents.
"You feel like you're juggling five 50-pound lead balls at the same time, trying to keep them all in the air," McMurphy said.
This year, Congress approved billions in COVID-19 relief funds to help child care providers keep afloat, but a majority of states have yet to distribute those funds. While Congress debates the final price tag on a new round of investment through President Joe Biden's sweeping social spending package, the stalled COVID-19 funding has raised questions as to whether it could face similar limits in helping the industry confront an urgent staffing crisis that threatens to upend the country's economic recovery.
"These weren't designed to address the long-term structural flaws that our child care system has had for a long time," said Caitlin McLean, director of Multi-State and International Programs at the Center for the Study of Child Care Employment at University of California, Berkeley.
The staff shortage has rippled across the U.S. economy, forcing parents who are unable to find suitable child care to stay home rather than return to the workforce.
"A lot of these issues we're facing now are really a direct result of shortchanging our child care infrastructure for decades," McLean said.
An 'unworkable' model
The child care industry is at the center of efforts to ease the broader labor shortage since many parents remain on the employment sidelines to care for their kids.
“Parents cannot go back to work without the very essential high-quality licensed child care providers in their communities,” said Cindy Lehnhoff, director of the National Child Care Association.
Child care facilities struggled to attract workers even before the pandemic, but it substantially worsened the crunch, according to Lehnhoff. Four of every five centers said they had a staffing shortage, and 78% cited low wages as the main obstacle, according to a survey in June and July by the National Association for the Education of Young Children.
“It’s at a crisis level,” Lehnhoff said.
Child care workers include a mix of educators with bachelor’s degrees who can earn upward of $15 an hour and assistants with one-year child care credentials or high school diplomas. Employees overall earned a median wage of $12.24 an hour, or $25,460 a year in 2020, according to the Labor Department. That places child care among the lowest-paid industries requiring a college degree for some workers, and schools have been wresting away employees with promises of higher salaries, Lehnhoff said.
Ross Ewing, director of Mary Stuart Gile Early Learning Center, which runs a child care program and a laboratory school to train teachers in New Hampshire, said the trend locally and nationally is that although people may be enthusiastic about entering the field, many ultimately leave it.
"That's because the pay is low. The hours can be long, and it can be really demanding, both physically and mentally and emotionally, and without the pay and flexibility to help support that a lot of people choose to work elsewhere," he said.
The biggest reason for the modest pay is that child care needs lots of workers to meet state requirements of one employee for every four infants, with progressively less rigorous ratios for older children, according to Lehnhoff.
Labor costs make up about 55% of a child care center’s expenses, compared with about 10% for a retailer such as Walmart, she said. Profit margins, in turn, are thin at about 10%.
“We can only charge parents so much, or you are not going to have them,” said Linda Kostantenaco, owner of Kiddie Koop Children's Enrichment Center in San Antonio.
Though many centers offer benefits, they’re typically more limited than other industries to stay within budget, according to Lehnhoff. Many potential workers are afraid of catching COVID-19 since children under 12 aren’t vaccinated, Lehnhoff said.
When the delta variant of the coronavirus surged, employment at child care businesses fell by about 10,000 from June to August before rebounding last month.
The work, which includes changing diapers and cleaning messes, can be arduous. “It’s hard work” but highly rewarding," Kostantenaco said.
An average 30% to 40% of industry employees quitt each year.
Kostantenaco, who has 13 employees, has been unable to hire six more to return to pre-pandemic staffing. She has placed online ads, but “they’re just not even coming in,” she said.
“A lot of fast-food places are giving signing bonuses,” a perk she said she can’t afford.
Anthony D’Agostino, owner of Inspire Care 360, which has three child care centers in the Rochester, New York-area, would like to return to his pre-pandemic staff of 66, but it's at about half that level.
Some job candidates don’t show up for interviews. “Or they’ll be on the job for two weeks and then disappear,” he said.
As a result, D’Agostino has a wait list of 20 to 40 parents at each center.
He said he beefed up his health coverage and paid time off and started funding online courses as part of professional development for staffers to better attract and retain employees.
“It is helping,” he said, though not enough to ease his worker shortage.
Stalled COVID-19 funding
In March, lawmakers approved $39 billion in funding to relieve the child care industry as part of Biden's American Rescue Plan, allocating $24 billion for stabilization grants to help programs remain open or reopen after COVID-19 lockdowns. Months later, 19 states have posted online applications for child care providers to apply for funding, according to the Department of Health and Human Services.
HHS laid out a timeline for states to submit their applications to give them time to map out how stabilization grants could be used, according to Mike Farquharson, a policy analyst for the Committee for a Responsible Federal Budget.
States have until Dec. 11 to notify HHS if they can commit to distributing at least half of the allocated funds and until April 1, 2022, to determine if they can't meet any of the obligations. The federal plan gives states until Sept. 30, 2022, to distribute that funding.
Farquharson pointed to other COVID-19 federal aid programs such as the Restaurant Revitalization Fund in which people weren't prepared and missed out on applying for support.
"If child care providers submit their applications and the program is off the ground but providers have no idea about how to apply for these funds, that's not ideal either," he said.
Providers are frustrated by the bureaucratic red tape.
Maryland began accepting applications in July and stopped three weeks later, promising to distribute payments by Sept. 30. Two days before the end of September, the state notified providers the money wasn't coming, according to Chris Peusch, executive director of Maryland State Child Care Association.
"People are a little frustrated in our state," Peusch said. "Other states have gotten their money out."
Thursday, the state's education department distributed $55 million of the $309 million Maryland received in relief funding for child care providers, according to the state comptroller's office. It was not immediately clear how much was designated as stabilization grants.
“Child care providers in Maryland and across the country are struggling to stay open, and every day that passes without states supporting them with the federal dollars already provided by Congress increases this burden," said Sen. Chris Van Hollen, D-Md., who was among a group of lawmakers who wrote to the state's education department urging the agency to fast-track the payments.
State administrators are trying to balance the need to act quickly with making wise investments in using the COVID-19 relief dollars, said Mario Cardona, chief of policy and practice at the advocacy group Child Care Aware of America.
"A lot of these systems are not built to serve as many as we're hoping to serve," he said, noting the child care sector saw declines in the workforce before the pandemic. "There are systemic issues that have long linked child care in the form of poor compensation, inadequate or nonexistent benefits – and, at times, unsteady availability of work."
Some classrooms have empty seats that providers are unable to fill because they don't have sufficient staff to meet the demand, Cardona said.
"I don't think that we can ask providers to do any more than what they're currently doing," he said. "It's really an area that's going to require increased levels of investment from the government. And so right now, states are in a position to help leverage some of the funding that they received through the different relief packages."
Some states, including Michigan, offer one-time bonuses to stave off a mass exodus while others, such as New Mexico, use relief funds to make sure reimbursements that providers receive from the state reflect the cost of providing quality care rather than the market-rate survey, which is based on what parents can afford to pay. The state raised its income eligibility from 200% of the federal poverty level to 350%, the highest eligibility limit for child care assistance.
New Mexico Education Secretary Elizabeth Groginsky said the state uses federal relief funding to offer a one-time payment to those working in an early child care licensed or registered facility in the state, beginning in November.
Though the initiative supports the policies only over the next two years, Groginsky and other state officials hope they'll be able to sustain them through other funding. She said the package Congress is considering is "essential" to build on the relief funding and underscores the need to reshape the child care landscape.
"It was unfortunate that the industry had to fall so far to get relief," she said, "but now we need to continue those investments to ensure that the industry not only stabilizes but expands."