The child care conundrum is a dizzying circle that has stymied employers for decades. Families are unable to afford child care; salaries account for about three-quarters of the cost of care; and the majority of American child care workers earn poverty-level wages. For all three of these things to be true is a head-scratcher, admits Minneapolis-based child care consultant Erin Watson, owner of Weaving Change, LLC.
“The true cost of operating child care is way more than the market rate a person can afford,” Watson says. “The actual cost for infant care would be somewhere between $37,000 and $40,000 a year. The current market rate is $9,000 to $18,000 a year. This is a classic example of a market failure.”
When child care workers are unjustly compensated, that leads to turnover in the industry and burnout in the workforce, exacerbating the problem Watson says is felt every day on the ground in the New North region: There aren’t enough available child care slots to meet demand, keeping parents out of the workforce at a time when they are needed more than ever.
“The product costs way more than families can afford, but that product is pretty important,” she says, adding that data indicates there were more employed Americans without child care in October 2022 than at any point since the federal government began collecting such data, including during the height of the pandemic. Furthermore, she says, Wisconsin has a higher-than-average population of working parents with infants; infants are the most expensive to care for because of mandated caregiver-to-child ratios.
But making short-term investments in subsidizing care for families or building facilities to create more space doesn’t solve the issue Watson says is at the heart of the nation’s child care crisis: workforce wages and retention. As long as there is a worker shortage in the child care industry, facilities will never be able to operate at full capacity and meet the dire need.
Since August 2020, a group of community and child care leaders have been meeting virtually in Northeast Wisconsin to start tackling the mammoth issue. The Greater Fox Valley Child Care Alliance is a network of stakeholders convened by the Basic Needs Giving Partnership. This spring the alliance hopped off Zoom and into the broader community, hosting learning and action events aimed at bringing more voices into the conversation. Events were held in Appleton and Green Bay. An event was also held in collaboration with the Northeast Wisconsin Manufacturing Alliance May 25.
Watson facilitated the sessions and challenged attendees to work in small groups to brainstorm solutions under five strategic umbrellas. These included creating community-driven funds to increase child care workforce wages and engaging employers to invest in child care systems to recruit and retain employees.
Missy Schmeling, executive director of Encompass Early Education & Care, outlined her organization’s strategy at the Appleton forum April 26. In 2021, she says, Encompass threw out the compensation playbook and began paying workers $17.50 an hour — a significant increase from the previous $11-$13 wage range. She says demonstrating to workers that they are valued has led to a drastic change in retention rates and subsequently Encompass’ ability to care for more children. The organization, which recently announced expansion into Oconto Falls, has a long-term strategy to fund the wage increases by creating an endowment, Schmeling said.
“We’re trying really hard to make sure we were working hard to recruit staff, because without making a true investment we weren’t going to be able to get anywhere,” Schmeling told about 40 attendees gathered at The Building for Kids Children’s Museum.
Endowments like Encompass’, sales tax levies, direct employer subsidies, expanding access to existing services such as WEESSN (the Wisconsin Early Education Shared Services Network) and the Winnebago County employee health program, and tax credits were among the solutions discussed at the alliance’s brainstorming events.
By developing strategies and identifying allies and supporters to bring them to fruition, the alliance is beginning to chip away at a systemic issue.
“There is and has been always a lack of sufficient, sustainable investments into child care as an essential community infrastructure … on local, state and national levels,” Watson says. “Most investments [to date] make it easier for families to afford care, but it doesn’t make sense to just focus on that when there are no slots available for families in the first place because of a workforce issue. It all has to work together.”
To learn more: childcare@bngpwi.org
