Access to childcare and ensuring a solid workforce in childcare facilities is a “crisis” for which many federal and state entities are seeking solutions.
According to experts and human rights advocates, the role of businesses and employers is becoming increasingly significant, not only to end Ohio’s child care problems but also to ensure that the state does not suffer major economic losses because of them.
During a recent panel discussion hosted by the Federal Reserve Bank of Cleveland, policy advisers and local child care advocates emphasized the need for public-private partnerships and creating more incentives for workers to stay in child care settings.
“The question really isn’t whose responsibility it is, but whose interest it is. Employers have a real business reason to do this,” said Sarah Savage, a senior analyst and policy adviser at the Federal Reserve Bank of Boston.
Savage said on-site care and childcare subsidies are “rarely offered” even in organizations with 5,000 or more employees, citing a 2023 private study. Mercer.
The survey found that 10% of employers with more than 5,000 employees offer on-site care, while 40% of businesses of that size offer none of the listed services, including childcare referrals, tutoring, subsidies or reimbursement.
Businesses have a role to play, but the child care sector won’t improve unless it first addresses its own staffing problems, said Kyle Fee, a policy adviser at the Federal Reserve Bank of Cleveland.
Fee said staffing issues were a “major constraint on child care provision,” and many of the patterns shown in workforce retention and wages were found to be “typical of low-wage occupations.”
Citing a 2019 national survey of early care and education, Fee found that one-third of child care centers had staff turnover of 20% or more, with turnover being higher in centers with lower wages. Fee said that turnover was also related to a combination of wages and the amount of child care and education services offered at those centers.
The profile of the workforce shows a largely younger workforce of women who are “more diverse in terms of race and ethnicity than the rest of the workforce,” Fee said.
In 2022, child care workers had the 10th lowest annual median wage in the country, just ahead of quick food workers and cashiers, and Fee said the estimates for Ohio “tend to be a little lower.”
“The nanny wage does not provide a living wage for an adult and one child in any state,” Fee said.
According to Fee’s analysis, these figures include people who are still economically dynamic, and there are fewer and fewer of them.
It found that on average around 15% of childcare workers left the profession between 2010 and 2022, up from 8% to 9% of pre-school and primary school teachers who left the profession during the same period.
According to Fee, in 2022, employee turnover in the childcare sector was 65% higher than in “typical professions.”
On average, half of workers who leave the childcare profession never return to work.
“The key here is to pay renewed attention to the turnover of child care workers entering and leaving the workforce, which requires further research,” he said.
Groups in Ohio are taking action to improve worker pay and maintain the quality of centers to encourage more families to enroll.
Nancy Mendez, president and CEO of Starting Point, a child care organization in Northeast Ohio, said they are working with Cuyahoga County to provide pre-school scholarships for children earning up to 300% of the federal poverty level. They have also used federal ARPA funds to provide stipends and bonuses for child care staff.
“We’re trying to do whatever we can to stabilize the system,” said Mendez, whose organization helps daycares maintain quality services and connects parents with services in the region.
But rising wages mean rising tuition, which can result in degenerating enrollment as families lack the money to cover rising childcare costs and other expenses, creating a never-ending cycle for the centers, Mendez said.
“We have a chicken-or-the-egg situation here that they can’t really solve,” Mendez said.
The organization has seen the impact of the COVID-19 pandemic on multiple sectors of the economy across the state, with child care suffering the brunt of the impact in a profound and prolonged way.
“We waited for this tsunami of low enrollment and staffing issues to spread, but we saw our staffing issues only get worse,” Mendez said.
Starting Point contacted 60% of the childcare centres and homes it works with who said they were “operating at low enrolment levels, mainly due to staffing issues”.
Mendez said that to reach breakeven point, child care facilities need to have at least 70% enrollment.
The lack of affordable child care, combined with staffing shortages, has created a situation that Mendez and policy advisers on the panel say will have an economic impact. Mendez said neighboring states like Pennsylvania and Michigan have seen estimated economic losses of more than $2 billion due to the lack of child care.
“I wouldn’t be surprised if we were looking at $2 billion in losses per year in Ohio because of the breakdown of child care or lack of access to child care,” she added.
Legislative measures have been introduced to try to create an employer-state partnership on child care costs, with efforts to create a tax credit that targets child care and family costs and even a tax credit for Ohioans who contribute to child care facilities. Many of the measures are led by Republicans, giving them a better chance of passage in the Republican-majority House and Senate.
However, the Ohio General Assembly is in recess until the fall, likely until the November election. So the measure won’t be introduced until the end of the General Assembly term. If no action is taken by December, the measure will have to be reintroduced in the recent year.
