And now it’s starting to deteriorate.
The shrinking workforce — coupled with ongoing challenges of low pay and spotty benefits for workers — has economists and policy experts sounding the alarm: If this industry falters further, it could spell trouble for the entire labor market as working parents scramble to find care for their children.
“Now that we’re seeing a decline [in employment]That should be troubling to many people who rely on these services,” said Caitlin McLean, director of multistate and international programs at the University of California Berkeley’s Center for the Study of Child Care Employment.
“It’s absolutely a contributor to the larger worker shortage that we’re seeing,” she added.
The childcare industry was “barely getting by before the pandemic,” she said. “And now it’s really at a breaking point.”
Childcare workers in short supply
The situation has only been made worse by the pandemic.
“It’s a tough job at the best of times,” said Sarah House, a senior economist at Wells Fargo, adding that “here we are in a pandemic.”
Increased health risks, ever-changing regulations, and inflationary pressures have increased concerns for childcare providers.
“It’s definitely different now than it was two, three years ago from a provider’s perspective,” said Lisa Keller, who runs a home-based childcare centre in Horace, North Dakota. “You have your challenging and stressful days, but now you hear a child coughing [and you wonder if] this kid has a cold, and it’s not a big problem, or we can stand still for 20 days.”
“We’re almost two years in, and I think the longer it goes on, and you don’t have that option [to return to work]becomes more than just a temporary exit or a temporary break from the workforce,” she said.
Raising worker wages presents a Catch-22
One of the biggest challenges that existed for Keller before the pandemic remains true today: it’s hard to get help when it’s needed.
“You put it out there, ‘Looking for part-time help,’ and most of the time no one will even respond,” she said. “I don’t know if it has anything to do with it [Covid] exposure or with payment. I’m not even sure what the biggest problem is with that.”
Childcare workers in the US are paid an average of $13.51 an hour, according to the EPI analysis. That’s nearly half of what the average American worker makes, at $27.31 an hour.
This often means childcare workers cannot afford to support themselves or their families, leading to higher rates of job turnover, reduced quality of care, and a greater risk for towns and cities to become childcare deserts, the EPI found.
Better pay will improve workers’ financial security, increase employee retention, and ultimately, lead to a stronger economy, according to the analysis. The EPI proposes a minimum hourly wage between $21.11 and $25.95 per hour.
However, raising wages creates a potential Catch-22: It could push child care costs higher, and those expenses are already among the largest for U.S. families.
“I know a lot of people think daycare is expensive, and it’s for parents, [but] then we don’t make a ton of money either,” Keller said. “So to hire somebody, you have to have more kids, so you can pay them, and it gets difficult that way — to make sure you can get the kids so you can afford the help, but you need the help because you can only have so many kids. It’s a balancing act.”
The solution, says Elise Gould, a senior economist at the EPI and one of the authors of the November 2021 analysis, is more government involvement. That could include universal pre-K, financial support for providers as well as subsidies to families, “with provisions that guarantee higher wages and better working conditions for the workers,” Gould said.
“It can happen at the federal level, but there’s no reason why state and territories can’t take up those efforts,” she added.
In its Build Back Better plan, the Biden administration proposed increasing funding for child care — particularly through subsidies to ensure that low- and middle-income families pay no more than 7% of their income on child care and through universal preschool. However, these efforts are far from certain, with Build Back Better hanging in the balance.
Some state governments are getting innovative. In North Dakota, the state Department of Human Services’ Division of Early Childhood Services used federal pandemic relief funds and issued $50 million. emergency operating grants in 2020 for child carers. Last year it did promise nearly $30 million to help childcare providers with operating expenses during the pandemic and a period of high inflation.
This year, the state plans to launch a new childcare career program to support aspects such as training, certification, recruitment and retention. This is in addition to ongoing efforts such as providing start-up grants for childcare businesses and offering childcare assistance for job-seeking parents.
“I think [support for child care] is super-critical,” said Kay Larson, director of the Early Childhood Services Division. “It’s hard when working parents don’t have a place they trust for their children to have a quality early childhood experience and they are productive members of the workforce.”