Richmond, Virginia - June 1, 2022
The lack of child care is the biggest barrier to this nation’s economic recovery. Bigger than inflation, the national debt ceiling, and even political division. Ensuring the daily care of children, America’s next generation of workers, is not a problem only plaguing working families. It is an issue that anyone concerned with the future of our economy must immediately recognize.
“The inability to manage child care is the primary reason our economy is struggling,” warns President Barry DuVal of the Virginia Chamber of Commerce in a recent interview with the Virginia Child Care Association (VCCA).
This urgent warning by many pro-business organizations in Virginia the country’s top business-friendly state, is a wakeup call to corporate America. Their competitiveness and survival rest on whether 40% of parents with children under age 18 find child care so they are able to join the workforce. If they can, we will see our economy grow and thrive once more. If not, it will continue to struggle in the present, as well as in the future.
The economic impacts of COVID have spotlighted the insecurities of child care options in the US; particularly in low-resource and rural communities, resulting in greater shortages of quality child care. More than half of working Americans reside in so-called child care deserts, while those who can find care are paying staggering percentages of their income for it, far more than the federal recommendation of 7%.
Providers ranging from the national nonprofits YMCA/YWCA to the statewide VCCA have lobbied for serious investment in a child care system that focuses on private-public partnerships. These partnerships could blend private and public funds to construct more affordable child care options for families However, for too long, policy makers, and other stakeholders have ignored pleas for long-term solutions seeking short term solutions that are not sustainable. It’s taken a global pandemic to disrupt this norm.
Without new operational models in child care and significant investments, (something the corporate community could help provide) America’s economy will continue to grow at a slow rate. Many businesses will suffer from the absence of an eager workforce. Small businesses that form America’s economic backbone are at particular risk since they do not have the resources to operate when missing employees.
“We will not solve the workforce problems unless we solve the child care problem,” DuVal further cautions. Solving the child care problem, takes deeper understanding of how the U.S. child care industry, mainly small, privately owned businesses, operate. Most child care centers operate on profit margins barely near 1% . Long-term sustainability under the current fragile systems are not practical because the industry is almost entirely private and offering a service that is in high demand but too expensive for the majority of working families.
Root Causes of the Child Care Crisis
The biggest expense for child care providers are teacher’s salaries. According to the Center for American Progress, 70% of child-care center costs go to wages and benefits, yet many assistant teachers make near-poverty-level salaries. Operational budget constraints allow providers to pay staff an average of $12.74 per hour according to the Bureau of Labor Statistics. Therefore, few are willing to enter the child care profession.
In addition, although child care centers are viewed as “day cares,” most offer educational programs for all ages. Child care teachers are required to provide curriculum that support children’s development, do individual assessments, and attend parent-teacher conferences all very similar to requirements of teachers in K – 12 schools. However, child care center teachers must also meet extensive and sometimes excessive, state licensing regulations.
These struggles cause many early-education teachers to leave for higher paying, less-burdensome careers. Finding replacements is nearly impossible for care providers because no pipeline of trained, qualified employees exists. Winwood Children’s Center, a well-established private child care center in Virginia, that traditionally operated at 100% enrollment prior to Covid today is only operating at only 60% capacity, due to staffing shortages.
Other financial supports such as subsidies provide help to families, but most don’t apply, either because they are unaware that they would qualify, or because household income is higher than the very low threshold. For Virginia, this means allocated funds are unused despite promotional campaigns. Nationally, only 1 in 10 eligible children under age 6 receive child care subsidies.
For working parents, the desperation of finding and paying for child care transfers directly into the workplace and the decision to stay at home or join the work force. Parents must consider working hours, potential travel, attendance at off-hour meetings, and ability to profit at all from working. This challenging decision most often falls on women.
The Virginia Chamber of Commerce and Virginia Promise Partnership write in The Business Case for Strong Child Care that “breakdowns in our child care system disproportionately affect women, who make up 94 percent of workers [who are] involuntarily working only part-time due to child care challenges. According to a summer 2020 U.S. Chamber Foundation survey, 50% of parents who had not returned to work cited child care as a reason.”
As a small Virginia business owner himself, DuVal has witnessed the impact of child care scarcity on his employees, including turnover, diminished productivity, and high stress. While large companies often have more than one person who can execute different jobs, a cross-trained interim worker rarely exists in tightly budgeted small organizations. If one or two people quit, business operations may stall or stop completely, forcing closure, reduced hours, and lost growth opportunities.
The business community is slowly recognizing the foundational importance of early childhood to future workforce sustainability and excellence. “We hear from our members regularly about workforce challenges due to a lack of child care,” write Presidents & CEOs Alexis Ehrhardt and Danielle M. W. Fitz-Hugh of the Danville Pittsylvania County (VA) Chamber of Commerce and Chesterfield (VA) Chamber of Commerce, respectively. “Child care is not only critical to sustaining a highly skilled workforce today but also is vital to developing Virginia’s workforce of tomorrow.”
Research is clear about the importance of early years to human development. If children do not have consistent, sensitive, and responsive caregiving from ages zero to five, their ability and interest in learning and other skills are harmed and will significantly impact them as they get older. Studies have shown that high-quality child care and early education programs help children develop cognitive and learning skills that include attentiveness, determination, self-control, critical thinking, and problem-solving. These are critical elements to any innovative future workforce.
To providers and, increasingly, workers, child care is a business problem too long relegated to others without the expertise, ideas, leadership, and capacity of the corporate community. The child care industry needs business leaders to unite and work with state governments and organizations such as VCCA, YMCA/YWCA, Chamber of Commerce, and others to re-envision and rebuild this crumbling but vital support pillar of the economy.
Incremental progress is not going to resolve the monumental challenges, as reflected Dec. 3, 2021, when newly elected Virginia Governor Glenn Youngkin received the report Blueprint Virginia 2030: A Business Plan for the Commonwealth at the Annual Virginia Economic Summit on World Trade. Early in its 144 pages is an entire section demanding actions for long-term resolution of child care access and affordability as key to further securing the state’s position as a business leader in the domestic and global economies.
Virginia Pilots Generate Successes
Virginia has made modest progress toward addressing the child care shortage, but is committed to trying and many leaders have worked across parties to build support for issues impacting child care. In 2019, the Virginia Department of Education, in partnership with the Virginia Early Childhood Foundation and the University of Virginia, used federal funding to start a Teacher Recognition Program, a financial incentive in 11 localities of the state that pays child care teachers an annual bonus of up to $2,000. Its success has prompted Virginia to expand it dramatically statewide by 2023 after a rigorous study of the first year showed turnover rates among child care teachers cut in half from 30% to 15%.
As the nation continues to consider early education investments well beyond pandemic relief measures, child care experts urge greater focus on ways to motivate the business community to address this serious threat to their own sustainability and profitability. Businesses large and small need to fully recognize the rising threat to economic prosperity and their own success if safe, affordable child care is not available.
“This is the most-needed business investment of 2022,” says VCCA Vice President, Clark Andrs, owner of two child care facilities in Chester, VA. “It’s in the self-interest of every corporation and organization to redirect resources and use their formidable clout with policy makers and community change makers to solve this problem for the sake of our companies, employees, and economy.”
AUTHORS: Clark Andrs Owner of River’s Bend Children’s Center in Chester VA & President of the Virginia Child Care Association (VCCA). Kim Hulcher is VCCA Executive Director firstname.lastname@example.org
Virginia Child Care Association (VCCA) is a statewide, nonprofit membership organization of business leaders, directors, and teachers of privately owned and operated early education facilities.
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