Funding child care like K-12 education is 1 long-term option as Wis. looks for solutions to challenges

Daycare Dilemma
Published: Aug. 3, 2022 at 10:36 PM CDT
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(WSAW) - Over the last two years, Wisconsin has seen an investment in child care, helping the industry survive the pandemic. Otherwise, it has largely been parents who have carried the burden of paying for care that can cost families the equivalent of college tuition or a second mortgage.

“Child care across our entire nation is paid for on the backs of working parents,” Ruth Schmidt, the executive director of the Wisconsin Early Childhood Association said.

Parents have told 7 Investigates about this struggle, with some having to quit their jobs because they cannot find care or their income is as much as their cost of child care. Child care providers have said they cut their take-home pay knowing that if they charged the true cost of care, most families could not afford to send them their children.

“We (Americans) are all about, you know, pulling yourself up by your bootstraps and ‘you had those kids and you need to pay for them,’ but the bottom line is like, it’s our current workforce. It’s our future workforce,” Schmidt stated.

She has been the executive director of WECA for 20 years and has seen the consistent fight to address challenges facing child care and how the industry has changed over the decades.

“Prior to COVID, we were already in a crisis.”

She calls child care a “broken business model” that is impacting the entire state’s workforce and economy.

According to analysis and research from the Committee for Economic Development, a “nonprofit, nonpartisan, business-led organization,” Wisconsin workforce participation for mothers exceeds national averages.

“I don’t think that’s just a function of mom saying, ‘hey, I’d rather be out working than home with my babies.’ I don’t think that’s it at all. I think it is that our economy is such that it demands that all available parents be in the workforce.”

She also said state funding has been stagnant for years and has not been enough.

“Wisconsin as a whole puts about $16 million worth of state general purpose revenue into child care and if you calculate that out across the (roughly) 320,000 children under the age of 5 in our state, it comes out to an investment of about $50 a year.”

It is an alarm child care providers have sounded for years, but most businesses and legislators with the means to act, have not taken steps to address the underlying issues. When asked why Schmidt responded by saying it was an interesting question.

“This field is primarily women and I do feel like there’s a gender element to this discussion,” she said. “And so what we heard from legislators is, ‘yeah, we’re hearing from people that work in childcare, but we’d really like to hear from business leaders. We’d really like to hear from parents.”

She added that she believes there is a race element too, as the field sees an “over-representation of Black and Brown women” working as early childhood educators. About 35% of providers also have some sort of public assistance too.

“The ability to organize and sort of be listened to as a force, as an entity of a profession I think, has always been a struggle.”

When the pandemic hit, legislators heard from those parents and businesses and rushed $824 million in federal and state funds to support providers and keep them operating.

“This funding that came out of COVID really has been huge, like a huge blessing, being able to increase wages and not have to put it on parents,” Stephanie Daniels expressed. She is the director of the Aspirus Weston YMCA.

While the YMCA was able to raise wages, the raises still fall around the average amount seen around the state. Schmidt laid out the $824 million sounds like a lot, but it is what the industry has needed just to remain.

“That has been barely enough to help programs keep their doors open and it is not enough to help programs be able to pay their staff enough to stay employed. It is not enough for them to wage raise their wages so that they can recruit candidates that are right now looking at jobs at the Amazon distribution center that pays $20 an hour plus benefits.”

She also noted that the roughly $250 million the industry is seeing from this funding annually since the pandemic is set to end in 2023. She said that amount is needed so that there does not continue to be a decline, but what will begin to solve the underlying challenges?

“This is probably a huge political hot potato, but like to me it’s publicly financing care for our youngest kids, right? I mean we do it in our country. We do it, pretty much, for any kid over the age of 4 has access to some or all free care and education,” Schmidt opined.

Think of funding child care in a similar way as K-12 education.

Daycare Dilemma

Economists have studied the return, the economic return to our country on investing a dollar into childcare,” Schmidt began. “For every dollar you invest in getting a child into high-quality child care, you save $13... Less incarceration, less remedial education needs, higher graduation rates, less rates of teen pregnancy, like we’ve looked at all of these issues. We know the cost savings are enormous.”

“This idea of all day 3K, all day 4K for free through for parents is very, it would be really bad if that happened because (you) wouldn’t pay to come here, you would just go to your free 3K,” Daniels said.

A big concern for Daniels and some other providers is that the care would be moved into the school district buildings rather than having schools partner with centers.

Child care providers can care for more kids ages 2 and older than they can children under the age of two due to state-required child-to-teacher ratios. This means if centers are mostly caring for children 2 and younger due to free 3K, more center staff would be required to care for fewer kids. That is expensive to provide that care and would cost parents of babies and toddlers more to keep those centers open.

Then there is consideration into the care setting and how providers would receive funding equitably.

“You have to think about all the different types from private in-home, to group center, to Head Start,” Daniels continued.

That is not to mention unregulated care providers, parent caregivers, people like grandparents, friends, and other family members handling the care for children.

Daniels also was concerned about the state’s rating scale through YoungStar having a heavier influence on the amount of funding providers would receive and the potential for changes.

“The state can say ‘well, you’re rated a five star for YoungStar, so you get more than that center.’ OK, well, had we not had this (funding), I would have chosen my rates differently,” Daniels gave as a scenario. “I am no expert by any means on what policymaking in government looks like, but I know from just what I’ve read, it doesn’t look great. There’s a lot that could go wrong with it on our end.”

As someone who helps create policies on this topic Schmidt believes it can work, and there are other providers who have confidence funding child care like K-12 education can work too. Schmidt believes it would have to be structured as a mixed delivery system where the public dollars follow the child.

“Whether they want their child in a home-based family setting, whether they want that child in a classroom, in a K-12 building, or whether they went want that child in a group childcare program, or Head Start, all of those should be options and available for parents.”

For the youngest Wisconsinites, Schmidt said care could be funded from infancy onward. She also said guaranteed paid family leave could cover that gap and provide valuable developmental opportunities for children. This is especially important as most child care providers take the philosophy that parents are a child’s first and most important teachers.

Wisconsin Department of Children and Families Secretary Emily Amundson has also spoken about funding child care like school.

“What I think we need to do moving forward is really start to explore and examine a system that braids state funding, long-term sustainable state funding into that equation to help to boost it. That is really very similar to how we pay for schools,” she stated.

Her model she described as a three-legged stool rather than full funding of child care from the government; the government, parents, and businesses would each pay a portion of the cost of care.

“Right now, the political reality of our country I think is if we could get to the point of it being a three-legged stool, (that) would be really, really good because often right now it’s just like, it’s teetering on one leg right? Which is parents,” Schmidt said.

The key to that model is that businesses and the legislature would have to be on board.

“We need to understand the public good of this investment.”

There are pros and cons to both models, but the consensus and the call from those in the industry and parents is that something has to be done.

“The only reason people need care for their kids is because they need to be out of the house working,” Schmidt explained. “The only reason they need to be out of the house working is because our state economy relies on parents being in the workforce... Everybody benefits... if we can stand up a system of care that is funded in a more sustainable way than what we have right now.”

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