Childcare Costs a High Barrier to Access for Low-Income Kids in DC and Nationwide

April 28, 2016

Picking up where I left off, access to child care is one of the big issues facing parents and policymakers. Low-income children, especially the youngest apparently don’t have equal access to the sort of care that would give them more equal opportunities during the rest of their lives.

So how might we parse access?

In one sense, it obviously means having enough slots in childcare centers, home-based and publicly-funded programs for all children whose parents want them there.

The slots must also, of course, be for their children’s age group and where parents can get their kids to them fairly quickly and at a reasonable cost.

But an age-appropriate slot in a conveniently located program will mean nothing if the parents can’t afford it. Nor if the program doesn’t provide care during the hours they themselves can’t.

We know how costly unsubsidized child care is nationwide and in each state, plus the District of Columbia, which racks up the highest costs of all.

Care for an infant in a local daycare center, for example, cost, on average, $22,631 last year — more than what a single parent, working full time, year round at a minimum wage job earned. Only about $4,790 less for a four-year-old.

The parent is technically eligible for a voucher. But the priority list for awards casts doubt on whether she could get one.

Even if she could, finding a slot could be hard because the District’s reimbursement rates are so low that providers either won’t accept children with subsidies or limit the number they will — a long-standing problem the District still hasn’t remedied.

The District also, however, has Early Start — a spin-off from Head Start for infants and toddlers in families with incomes no higher than the federal poverty line, plus some who may have more, but not enough to get by.

Little hope for poor parents here, it seems. The program enrolled only 12% of eligible children, according recent Census data.

For somewhat older children, the District has Head Start — an enrollment figure reportedly over 100% of those eligible. It also has pre-K programs in its public school system. These, of course, are also free.

But none of the programs operates on weekends or during evening and nighttime hours, when low-income parents must often work. Nor during summer months. So the programs may be accessible, but they don’t fully meet the need.

I’ve focused on the District, but we see generally the same problems in communities across the country — except, of course, for wealthy enclaves. Head Start and Early Start don’t provide nighttime care for children anyplace, for example.

Last year, child care was the single largest family expense, Care.com reports. But that’s only for parents who could scrape up the money — an average nationwide of about $9,775 a year for just one child in a center.

Obviously an access barrier for many others, unless they got vouchers to subsidize child care.The main federal funding sources subsidized care for only 15% of eligible children in 2012, the latest year we’ve got reliable figures for.

More recent figures from CLASP suggest that the gap between need and access has grown since, though we don’t — and to my knowledge, never had — a hard number for this.

We do, however, know that low-income parents must often make do with makeshift arrangements — sometimes parking a child with a relative, sometimes with a neighbor, sometimes just where they can keep an eye on their kids or not even that.

Most such arrangements may keep children safe, fed and the like. But they probably don’t provide the early learning experiences that a high-quality childcare program does. Money isn’t enough for that, but it’s the foundation.

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Why Child Care Costs So Much

November 16, 2015

My recent post on childcare worker wages teed up, but didn’t explore an apparent paradox. While the workers’ wages are typically very low, costs of having a child cared for are formidably high. While these affect all families with kids who need care, they’re especially problematic for low-income families.

They obviously take a relatively bigger bite out of the budgets of low-income families who pay them. But they may also shrink those budgets because a parent decides that she (yes, usually a she) has no choice but to drop out of the workforce — or work less — so she can do the child caring herself.

So it’s worth asking, I think, why child care costs so much and whether public policies have — or could have — an influence, for good or ill.

One of the researchers on the team that assessed the public benefits costs of childcare worker wages suggests that the growth of the for-profit childcare industry might explain it. Spokespersons for a nonprofit that represents childcare centers beg to differ.

They cite stricter caregiver-to-child ratios, which state licensing rules set, more use of labor-intensive infant care and “fluctuating” rates for the reimbursements providers receive when they care for low-income children with subsidies.

This last, I take it, means reimbursements that don’t actually cover the difference between what the children’s parents pay and what providers must spend to cover their costs, with something left over, unless they’re nonprofits by choice.

Gillian White at The Atlantic explores the childcare center perspective by focusing on the owner of a center in Detroit.

The owner employs three lead teachers for nineteen children, some of whom are virtually newborns, some old enough to be spending part of their days in school.

She pays her staff about $9 an hour — even less than the median the Economic Policy Institute reports. But, she says, once she’s paid them, plus rent, utilities and materials, there isn’t much left over.

In some types of businesses, employers hold down labor costs by increasing productivity. They automate tasks, for example, so as to get more output per worker. Well, it’s hard to imagine automating diapering, wiping tears away or working with young children on educational activities.

And as both the center owner and the EPI analysts say, simply boosting the caregiver-child ratio would conflict with the aim of providing high-quality care.

What then could make child care less costly, assuming the owner’s balance sheet is more or less typical?

She sees childcare services as an area where government could do more to both relieve the cost burden on families and, one gathers, on centers like hers, since White’s summary refers specifically to their having the resources to pay higher wages.

The owner cites universal pre-K and income-based subsidies as possibilities. Expanding both would make child care more affordable for low-income families — the former, in fact, free for at least part of the time they need it.

Neither, however, so far as I can see, would make it easier for childcare providers to pay higher wages unless the subsidies, plus the fees families must pay cover higher operating costs.

Reimbursements rates differ not only among states, but within states, depending on various factors, e.g., the age of the child, the type of care, certain quality measures. Generally speaking, the federal government recommends 75% of current market rates, i.e., what providers charge families without subsidies.

Only one state set its reimbursements rates this high last year, though more than half did in 2001, the National Women’s Law Center reports. Some explicitly set their percents lower. Others that adopted the 75% standard hadn’t adjusted their rates — in some cases, for a goodly number of years.

Some states have compensated for this squeeze by increasing the percent of income that poor and near-poor families must pay. That, of course, further squeezes budgets that can barely — if at all — cover other basic living costs.

Co-pays notwithstanding, families may have subsidies, but a hard time finding providers who’ll care for their children. The Center for American Progress reports significant drops in the portion of subsidized children cared for in programs operated by two large, multi-state chains. The head of another chain says that unqualified providers have emerged to fill the care gap.

In short, we have a well-intentioned system that’s not working as it should because, as EPI has said, “high-quality child care is expensive,” and our policymakers won’t pay for it, though some seem far more willing than others.

Nothing unique about this. Surely not among our anti-poverty programs. But given the returns on investment, we as a country surely ought to do better.

 


Better Subsidized Child Care, But Could Be for Even Fewer Children

December 4, 2014

Shortly before the Senate began its extended Thanksgiving vacation, it did a remarkable thing. It again passed, by an overwhelmingly bipartisan vote, a bill to reauthorize the Child Care and Development Block Grant.

The House had already passed an amended version of the original bill on a voice vote, indicating that no member wanted dissents (if any) recorded. So we’ll soon have a generally better CCDBG, for the first time in nearly 20 years.

Not altogether the best bill we could have had, as such things rarely are. Nevertheless, a bill that will do various things to help ensure safe and potentially higher-quality child care.

And it will ensure that low-income parents can afford it for at least a year, even if they lose their jobs, end an education or training program or start earning somewhat more money than their state’s maximum for eligibility.

The hitch, however, is that it won’t add a cent to the block grant, though it does raise the cap on the amount Congress may appropriate by about $400 million over the next six years. Flat funding for the upcoming fiscal year, however.

So parents who manage to get CCDBG-funded vouchers should have fewer near-term worries about how they’ll afford child care — in many cases, the single largest expense in a family’s budget.

They should have fewer worries about their children’s safety because the bill requires, among other things, regular facility inspections, health and safety training for providers and employee background checks focused mainly on convictions for crimes of violence, child pornography and recent drug-related felonies.

And over time, parents should have fewer worries about whether their kids are getting the kind of care that develops the thinking, verbal and social skills they’ll need to be fully ready for kindergarten and beyond.

Under the former law, states had to set aside 4% of their block grant for quality improvements. The new law increases the mandatory set-aside up to 9% by the fifth year it covers. And it adds another 3% to improve care for infants and toddlers, beginning in the second year.

But there will be fewer of these less worried parents if Congress doesn’t also pass a hefty funding increase. Indeed, there already are fewer of them than in the recent past, even though the required set-aside has remained the same.

Preliminary data from the U.S. Department of Health and Human Services indicate that an average of roughly 1.5 million children a month received CCDBG-funded child care in Fiscal Year 2012.

This represents a one-year decrease of 116,400, CLASP reports — and a decrease of about 263,000 since Fiscal Year 2006.

Here in the District of Columbia, CCDBG supported child care for an average of 1,300 children — 54% fewer than in Fiscal Year 2006. And it’s hardly the case that we’ve got fewer low-income families now — or that child care has become more affordable.

The average cost of having an infant cared for in a local center was nearly $21,950 two years ago — about $3,750 more than in 2010.

A single mother earning the median for a family of her type would have had to pay 90.6% of her income for the care, unless it was subsidized. Perish the thought she had two children whose care she needed to pay for in order to work.

In Fiscal Year 2012, states and the District spent a total of $1.5 billion less on child care than they did the year before, in part because they ran out of Recovery Act money and in part because they used more of their Temporary Assistance for Needy Families funds for other things.

Combined federal and state childcare spending fell to the lowest level since 2002, when dollars went a whole lot further. And CCBDG spending, including transfers from TANF was virtually the same last fiscal year.

For this fiscal year, Congress restored the $154 million CCBDG had lost because of sequestration. What it will do for the upcoming fiscal year is a question mark. As I said, the reauthorizing bill provides for level funding. But that doesn’t mean the block grant will get it.

Even if it does, states will have to spend significantly more to comply with the new requirements. They’ll not only soon have to invest more in improving childcare quality.

They’ll have to develop complex new plans, including a process for ensuring that certain low-income families get priority. And they’ll have to collect and make readily accessible several types of information “to promote parental choice.”

So we should have better, more accountable publicly-funded childcare systems. But the requirements could further squeeze the amount states have to spend on subsidies.

Thus,  CLASP says, “Far greater investment — at the state and federal levels — will be needed to reverse this troubling trend” toward fewer and fewer low-income children in child care that wouldn’t bust the family budget.

Those of you who aren’t disenfranchised District residents can urge your Representative and Senators to provide the funding CCDBG needs. The National Women’s Law Center makes this quick and easy with an e-mail you can personalize.


Panel to Address Poverty in DC and What to Do About It

March 3, 2013

On Tuesday, March 5, the Fair Budget Coalition will host a panel discussion on poverty in the District of Columbia — “The State of the District’s Poverty: What’s the Story Behind the 600 Kids at DC General?”.

As the online invitation suggests, the Coalition is linking the record-high number of children in DC General — the District’s main shelter for families — to funding cuts in both safety net programs and others that benefit low-income residents.

A look at the District’s poverty rates is surely worthwhile. As I’ve written before, both the overall rate and the child poverty rate are well above the national rates — and considerably higher than the rates in 2007, just before the recession set in.

But, as I’ve also written, the Census Bureau’s poverty thresholds are unrealistically low. For a single mother with two children, for example, the 2011 threshold was just $18,123.

The Wider Opportunities for Women’s Basic Economic Security Tables for the District show that the family would need about $85,680 for basic necessities, child care and taxes, plus some extra for rainy day and retirement savings — if the mother had employer-sponsored health insurance and retirement benefits.

This is higher than the 2011 median income for District households as a whole, but nearly $22,000 lower than the median for households classified as white/non-Hispanic.

One of many indications that the growing economic prosperity Mayor Gray’s recent State of the District address celebrated hasn’t done much for the “have-nots” in the city.

The challenge Fair Budget faces is that no panel can specifically address all the programs that could alleviate hardship — and narrow the huge income gaps here — if the Mayor and the DC Council invested more money in them.

The event can provide a framework for the programs, however, and draw some links among them. Also identify priorities for addressing critical weaknesses.

We know, for example, that the Temporary Assistance for Needy Families program aims to prepare parents for work that will, at the very least, reduce their need for safety net benefits.

The District has invested resources in making TANF job training more effective. It’s also launched several initiatives to match job seekers with employers that might hire them.

But many parents won’t be able to work unless they have child care — and a subsidy to make it affordable. Consider, for example, that the average annual market rate local centers charge for infants is $2,400 more than a full-time minimum wage worker earns.

Yet the District’s subsidy program reimburses providers at such low rates that many have gone out of business. The remainder perforce generally limit the number of subsidized children they’ll take.

So there are more than 9,000 infants and toddlers on center waiting lists, according to the Fair Budget invite.

We’ve thus got one program that’s doing more to address barriers to work and another that should, but isn’t because it’s egregiously under-funded.

Similarly, the employment prospects of more than 36% of D.C. adults are extremely limited because they’re functionally illiterate.

Yet local funding for adult education programs was cut in Fiscal Year 2011 and again in Fiscal Year 2012. It’s at its twice-reduced level in the current budget, I’m told. (The budget for the Office of the State Superintendent of Education, where adult ed. is housed, is notoriously opaque.)

Well, I could go on, but point is made, I hope. As with any complex problem, poverty has a lot of inter-related parts. And the District government has a lot of parts that affect it, for good or ill.

If the Mayor truly wants to “improve the quality of life for all,” as his One City Action Plan says, then he should fashion a budget that reflects a comprehensive commitment to both the safety net and poverty reduction.

Like all elected officials, he’ll tend to want what he believes his constituents want seriously enough to consider when election time rolls round.

So a good turnout at the Fair Budget Coalition’s event would send a helpful message. And I expect it to be both informative and a launching pad for this year’s grassroots budget advocacy.

And who wouldn’t be inspired to launch after listening to panelists who know poverty first-hand — and while sitting among some of the families from DC General who’ll be there too?

The hour-long event begins at 3:30 p.m. in Room 412 of the Wilson Building, 1350 Pennsylvania Avenue, NW. You’ll need a photo ID to get past the guards.

And Fair Budget asks that you RSVP to Janelle Treibitz, 202-328-5513 or janelle@fairbudget.org.

UPDATE: The event will be in Room 123 instead of Room 412, as originally planned.


Put Child Care on the Map, Advocates Say

June 4, 2012

Wrapping up my post on child care costs, I remarked that we’d need a reordering of priorities in Congress to make affordable, high-quality child care available for poor and near-poor families nationwide.

Turns out that two major advocacy organizations — RESULTS and the National Women’s Law Center — have decided it’s time to put the pressure on.

We’ve had reports, expert testimony, news articles, blog posts, etc. But nothing gets attention like direct proofs of constituent interest.

So the organizations are asking all of us — well, all except us disenfranchised District of Columbia residents — to “put child care on the map.”

Specifically, they ask that everyone concerned about child care do one or more things while members of Congress are back in their home districts, as they will be for good parts of this summer and fall.

Then we’re to let the organizations know what we did so that they can put it on a Google map they’ve created.

Lots of options for putting child care on Congress members’ radar screens — many with helps like templates and meeting tips.

Also, at this early point, lots of vacant places on the map. But already fewer than when I first checked it.

The immediate occasion for this innovative campaign is the upcoming budget for the Child Care and Development Fund — the single largest source of federal support for subsidized child care.

The President’s proposed Fiscal Year 2013 budget would provide $825 million more for the Fund.

Most would go to the mandatory or entitlement part, which receives a set level of funding based on what Congress last authorized.

The increase would thus require Congress to change the authorizing language — presumably as part of a broader package that’s now overdue.

The remainder of the increase would go to the Child Care and Development Block Grant, which receives whatever Congress decides in any given year.

Most, if not all of the $325 million for the block grant would give states extra money to improve child care quality. The additional $500 million for the mandatory part would help fund subsidized child care, but only in states willing to match the extra they could receive.

The U.S. Department of Health and Human Services says that the increase would support 70,000 children who otherwise wouldn’t be served. This does not mean that more children than ever would receive subsidized child care, however.

The estimated number of children who would be served is about 200,000 less than in 2010, when states still had Recovery Act funds for child care.

Well, the President proposes and Congress disposes. Hence the need to put child care on the map.

Last year, the House Republican majority voted to cut the Child Care and Development Block Grant by $39 million. They ultimately agreed to a package that increased its funding — a notable turnaround, especially because Senate appropriators had earlier decided on level funding.

This is surely proof that actions like those RESULTS and NWLC urge us to take can make a difference, even in these … how shall I put it? … unfriendly times.


How Unaffordable Is Child Care for Low-Income Parents?

May 29, 2012

A bunch of things got me wondering about child care costs. How unaffordable are they for low-income parents who don’t have the benefit of subsidies?

The annual survey reports by the National Association of Child Care Resource and Referral Agencies are the best source of data on affordability I’ve found.

So I pulled figures from the latest report — most of them for 2009. Then did some calculations of my own — or more precisely, told Excel to do them.

Here’s a summary of key results, plus some Google gleanings about impacts.

Single Mothers Earning the Median

Single-mother families have average incomes significantly lower than families with two parents present. So I began my number crunching with them.

Lots of figures to enter. So I stuck with the costs of center-based care. It’s generally more expensive than care in a home setting, but also more frequently used.

NACCRA gives us breakouts for the median income of single-mother families in each state and the District of Columbia. Also the cost of care for infants and for four year olds as a percent of the median income .

Say a single mother needed child care for one of each. In 20 states and the District, she’d have had to pay more than two-thirds of her income if she earned the median.

Even in the lowest-cost states, nearly half her income would have had to go for child care.

In 30 states and the District, child care for only an infant would have consumed at least a third of her income.

Minimum Wage Workers

Things get worse, of course, for minimum wage workers — even if they work full time, year round, as many don’t.

But say we’ve got a minimum wage worker who does. In 26 states and the District, his/her entire pretax income would have been less than the costs of child care for the infant and four year old.*

Costs of care for the infant alone would have consumed more than half the full-time, year round minimum wage in 33 states and the District — and more than two-thirds in 14 states, plus the District.

Child care was unaffordable even for families with two full-time, year round minimum wage workers. For the two kids, they would have had to pay more than half their gross income in 27 states and the District.

In only one state — Mississippi — would they have had as much as two-thirds of their income for everything else a family needs.

So What’s a Poor Parent to Do?

According to the latest (not very recent) figures from the U.S. Department of Health and Human Services, roughly 39% of poor children eligible for federally-funded child care subsidies received them in 2006.

Eligibility here means that they were under 13, unless they had special needs. And their parents were either working or participating in education or training activities.

An additional 23% of eligible children in families with incomes between 101% and 150% of the federal poverty line also received child care subsidies.

Which leaves us with some 38% of poor and near-poor children whose parents worked — or were working toward work — without subsidized care.

As the National Women’s Law Center observes, some parents can rely on their parents or other relatives for child care. Somewhat more low-income parents than others do. But for a variety of reasons, many can’t.

And, as I hope I’ve demonstrated, many can’t afford child care at market rates. So what do they do?

Some, mostly moms, choose not to work. Better financially to have one parent out there earning and the other at home with the kids.

Others work part-time or in shifts, barely seeing each other awake for days on end.

And single mothers?

Some of them also decide they can’t go on working. They turn — or return — unwillingly to the Temporary Assistance for Needy Families program. It’s a stopgap solution because TANF is time-limited. But it solves the child care problem for awhile.

One homeless mother says she worked nights while her kids slept in the car parked where she could keep an eye on them.

Surely we could do better for children, their parents and our economy. To say this would involve some reordering of priorities in Congress is an understatement.

* The federal minimum wage increased by 50 cents an hour in July 2009. This produced minimum wage increases in most states and the District. For my calculations, I used the post-increase rate.


Let’s Put Our Money Where Our Mouth Is

May 17, 2011

We profess to care about the well-being of children — the most helpless and vulnerable, the future of our community, the hope of our nation, etc. We profess to care about small businesses. We profess to care a whole lot about helping low-income families become self-sufficient.

But what do we do when it comes to investing in a program that’s key to all three? We short-change it. I’m talking, of course, about subsidized child care.

Talking about it now because Mayor Gray’s budget proposes $2.2 million less in local spending on child care subsidies.

The Office of the State Superintendent for Education says the “adjustment” reflects the current expenditure rate. It’s been decreasing in recent years “in part because of the increase in quality of Pre-Kindergarten 3 and 4 year old slots in District Public Schools and Community-Based Organizations.”

This, I take it, is a roundabout way of saying that more parents are choosing to send their kids to the pre-K programs in our public schools. And a way of not saying that the current expenditure rate still leaves thousands of parents without affordable child care.

OSSE is thus offering basically the same justification as it did last year, when former Mayor Fenty proposed a larger child care subsidy cut.

And the objections, I think, are basically the same — though what I’ve learned since allows me to flesh them out somewhat.

First, however great they are, the preschool and pre-K programs offered by the District’s public and charter schools don’t admit children under the age of three.

That leaves lots of parents with infants and toddlers no alternative but community-based child care centers and in-home providers — assuming, of course, that they want or need to go on working or fulfilling other obligations, e.g., complying with the work requirements of the Temporary Assistance for Needy Families program.

Same is true for some parents with three and four year olds. DC Action for Children’s blog reports that DCPS has some 1,400 children on waiting lists for pre-K slots.

Since I last wrote about child care, OSSE released the results of a more current survey of local providers, including comparisons between market rates and the rates at which OSSE reimburses those with subsidy contracts.*

Its waiting list figures are somewhat lower than OSSE’s less current ward-by-ward reports. But the details it adds are more important than the differences.

Notably, 72.8% of children on provider waiting lists last year were under four. And there were barely more of these children enrolled than wait-listed — 7,568, as compared to 7,381.

The survey report authors say, as they did in 2008, that “there appears to be a mismatch between slots needed and/or desired and current supply.” Mild understatement here.

And again, part of the explanation seems to be the gap between child care market rates and the reimbursements OSSE provides.

For contract centers, which account for the vast majority of subsidized slots, the annualized reimbursement rate for infants was nearly $4,000 less than the market rate. Point spreads for children ages one through three were all over $3,000 — nearly $3,770 for one year olds.

Not surprising then that large majorities of contract centers reported difficulty making ends meet — as, for the most part, did contract family home providers. Nor surprising that both recommended increasing reimbursement rates more often to keep up with rising operating costs.

In short, there’s no doubt that OSSE has been spending less. But that’s no reason to make another cut in child care subsidy funding.

* I’ve been told that the rates shown in the report don’t include the relatively small co-pays that contract providers may charge all but the poorest parents with vouchers. So the total per child amounts the providers receive are generally somewhat higher than shown.