[ Three million children could be affected as the largest
investment in child care in U.S. history expires in September.]
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CHILD CARE DISRUPTIONS EXPECTED AS RECORD FUNDING NEARS AN END  
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Claire Cain Miller, Alicia Parlapiano and Madeleine Ngo
June 21, 2023
New York Times
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_ Three million children could be affected as the largest investment
in child care in U.S. history expires in September. _

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For two years, the United States has been effectively running an
experiment in federally funding child care providers. The $24 billion
disbursed in pandemic relief has been the largest investment in child
care in U.S. history. Child care providers have used the money to
raise teachers’ pay, buy supplies and pay mortgages.

In September, those funds expire, one of the last of the pandemic-era
safety net benefits
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end. It is a looming crisis for the industry, and could lead to
tuition hikes, layoffs and closures. In all, child care could be
disrupted for three million children, close to a third of those in
child care, according to a report
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by the Century Foundation.

The National Association for the Education of Young Children regularly
surveys child care owners and workers. In its most recent survey
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the grants, in October 2022, four in 10 directors and owners
nationwide said they would have to raise tuition when grants ended
this fall.

More than a quarter said they would have to cut wages — from a
median hourly wage of about $12. Nearly a third of providers,
including 44 percent at those owned by minorities, said they might
consider leaving their job or, in the case of home-based child care,
closing altogether.

“Federal funding made a huge difference,” said Julie Kashen, a
senior fellow at the Century Foundation and an author of the new
report. “There are going to be huge and dire consequences for child
care employees, for families, for employers.”

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Children’s Corner, which cares for 80 children in Millcreek, Utah,
has been receiving $26,000 a month in grants, said its director, Jen
Whyte-Frederickson. Without the grants, she said, the center, which
her parents started 40 years ago, would have closed during the
pandemic.

She used the money to raise hourly pay to $15 “because they all
deserve it,” she said. When the grants end, she said, “the plan is
raising tuition.” She already increased it to $985 from $900 monthly
for a 2-year-old, and will probably raise it above $1,000.

[When the funding ends, “the plan is raising tuition,” said Jen
Whyte-Frederickson, the director at Children’s Corner in Millcreek,
Utah. ]

When the funding ends, “the plan is raising tuition,” said Jen
Whyte-Frederickson, the director at Children’s Corner in Millcreek,
Utah. Credit...Lindsay D'Addato for The New York Times

For Lorna Adkins, who runs Growing Places from her home in Huntington,
W.Va., that’s not an option for her families: “Raise tuition? Not
in West Virginia, not in this economy, not here.”

She has been receiving $3,200 a month. She has spent it on wages,
cleaning supplies, utilities and to offset rising food prices. After
expenses, she said her take-home pay without the grants was about
$2.50 an hour. With the grants ending, combined with rising costs and
new regulations on providers, she said, she plans to retire early.

“There are a lot of people in child care that are going to close
down because of this,” she said. “It’s just a fact.”

The federal relief funds saved the industry, analysts and providers
say. One in three child care providers — 70,000 — receiving the
grants might have closed. Unlike public schools, child care is almost
entirely financed by private tuition. When it dried up during
lockdowns, providers could not stay afloat
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But the sector was precarious even before the pandemic. Treasury
Secretary Janet Yellen has called child care a textbook example of a
broken market [[link removed]].
Workers are paid less than in 98 percent of other professions, but
many providers cannot raise prices because parents often can’t
afford it. Already, half of parents
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more than 20 percent of their household income on child care.

“The grants were really designed to prop up a system that had
already been failing before the pandemic,” said Caitlin McLean of
the Center for the Study of Child Care Employment at the University of
California, Berkeley.

The pandemic also reshaped the business. In some places, parents are
not using regular child care as often as they had been, with
many working from home. Hiring has also become much harder
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jobs, in many cases less demanding, have begun paying more.

In the National Association for the Education of Young Children
survey, two-thirds of providers said they were experiencing a staffing
shortage, and of those, nearly half said they were caring for fewer
children than they would like because of it.

Three-quarters
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child care providers who received grants have used funds to pay
teachers. Now they face cutting pay — while in a hiring bind.

“We are backed into a corner now, because we can’t decrease their
wages because then we will definitely not have teachers, and we
can’t increase our rates for parents because parents cannot pay any
more than they are,” said Brooke Skidmore, who owns the Growing Tree
in New Glarus, Wis., with her brother.

The $24 billion
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stabilize the industry came in the American Rescue Plan, and the
grants were distributed by states according to varying rules. More
than 80 percent of providers received them. Previously, federal
support for child care came mainly through block grants that states
use to subsidize care for low-income parents. Congress also increased
these grants by $29 billion during the pandemic, set to expire in
September 2024.

Some Democrats in Congress want subsidies for child care to be
extended or made permanent. Some Republicans have also proposed
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federal funding for child care.

Senator Bernie Sanders, who recently released a report
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the subject with Senator Patty Murray, said, “If we allow this cliff
to take place and lose the billions of dollars that we put into
stabilizing child care, it will make a disastrous
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even worse.”

Yet Democrats’ large social safety net bill, which included
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child care and universal pre-K, failed to pass. Republicans, along
with a Democratic senator, Joe Manchin, said the investments were too
expensive, among other concerns. Senior Biden administration officials
said billions in additional funding for child care providers appeared
unlikely, especially given the recent push from Republicans to limit
government spending
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Some states and localities have found ways to continue to subsidize
child care, and others are considering it. Minnesota made
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of $750 million. Policymakers in Maine have proposed continuing
pandemic-era investments. In November, New Mexico passed a
constitutional amendment
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guarantee a right to early childhood education.

Adaeze Ngoddy, owner of the Rex Childcare and Early Learning Center in
Rex, Ga., said she hoped there was a way to keep financial help
coming. Even with $51,000 in monthly grants, her business has not
fully recovered from the pandemic, she said, and has been unable to
hire for six open teaching positions.

“I’m hoping they continue until things actually do normalize,”
she said.

 

* Child Care
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* public funding
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* budget cutbacks
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* Financial Crisis
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