Child Care Crisis: Why Federal Assistance Drying Up Is a Concern

Child Care Crisis Why Federal Assistance Drying Up Is a Concern

The cost of child care has been costly and unavailable for a lot of Americans which is why parents pay more than $10,000 per year, and more than half the population is living within “child care deserts” with an insufficient availability.

Industry professionals are warning that things is likely to get even more severe in the months ahead.

States will likely face an escalating drop in federal investment in child care beginning on Sept. 30th, which is the deadline for expiration of funds for the pandemic that have contributed to stabilizing the sector in the last two years. The cutoff in funding could lead to the closure of 70,000 programs as well as over 3 million childcare places as per The Century Foundation, a progressive think tank for public policy.

“This money has been a lifeline,” said Julie Kashen, senior fellow and director of the women’s economy in The Century Foundation. “It allows organizations to keep their doors open, and allow them to enroll more children. This has enabled parents to work with confidence knowing that their children are taken care of.”

“When the math no more is a perfect sum … I’m not going to repeat it. We’ll close.’

A $24 billion Stabilization Program implemented through the American Rescue Plan of 2021 which allocated funds over 220,000 child-care programs and affected as many as 9.6 millions children as per the U.S. Department of Health & Human Services.

Assistance was granted to more than the 80% of licensed child childcare centers across the United States that used the funds to cover costs such as staff expenses, rent, PPE as well as utilities.

The American Rescue Plan also provided $15 billion for the expansion of The Child Care and Development Block Grant which assists families with lower incomes to with the cost of childcare. The grant is scheduled to expire in September 2024.

Melissa Colagrosso, CEO and director-in-charge of A Place To Grow Children’s Center in West Virginia, said the extra funds meant that the child care center would be able to increase the number of staff members by giving bonuses, and also implement “much needed” infrastructure improvements which include lighting updates as well as the replacement of old HVAC systems.

child care playing children

Colagrosso is the director of this center from 1995 However, she’s not sure she’ll be in a position to keep the center in operation after the funds run out.

“We spent many, many years borrowing to make payroll because the math doesn’t add up in this industry,” she said to USA TODAY. “When the numbers don’t add up and I return taking loans to fund this business, I’ll never repeat the same mistake. I will not repeat it. We’ll close.”

Where is child care the most expensive? New data from the labor department provides costs per county

Experts believe that, without additional funds programs for children will have to pass on the higher wages of staff (which will mean higher expenses on parents) or pay staff less (which could boost turnover in a sector that is presently 40% below its pre-pandemic job number).

The Century Foundation expects the child care workforce to lose an additional 232,000 jobs once the funding is over as employees quit the field to pursue more lucrative jobs and six areas (Arkansas, Montana, Utah, Virginia, West Virginia and Washington, D.C.) predicted losing more than 50% of their programs that are licensed.

The children in each state are will be deprived of child care due to the cliff in child care

Cindy Lehnhoff, director of the National Child Care Association, an industry trade association she said that child care providers cannot match the salaries of other industries particularly when other jobs they work in can help employees pay off their student loans, or keep up with the rate of inflation.

Child care workers earned an average of $14.22 per hour in May 2022. Teachers of preschool who work in private and public schools – earned $18.58 per hour. Food and beverage service workers earned $14.69 Retail sales personnel earned $15.62 as well as animal caregivers earned $15.46 according to the average rates reported by the Bureau of Labor Statistics.

“If you’re qualified with a credential or degree in early childhood, nine times out of 10 you’re going to take that to a public school,” Lehnhoff explained. “The fact that you can double to triple your salary, get a retirement program and much better benefits and many more days off – you’re going to have to look at that seriously.”

It’s not something we have within our budget’

Cleveland the Ohio city of Demeatrice Nance, along with her husband spend about $280 a week, or $15,000 a year on childcare for their 9-month-old granddaughter.

The expense has increased their budget however, the family has no other alternatives. Nance stated that her daughter sought assistance with child care but was turned down her $18-per-hour salary, which was too high to be eligible for the state’s voucher program for child care however, it was not enough to cover childcare out of pocket being a single mom.

“Therefore, myself and my husband – which are the grandparents – are currently assisting,” Nance explained. “Which is not something that’s in our budget, but we value education.”

Demeatrice as well as Nathan Nance with their granddaughter, Madelyn Wright.

Already the family is having to cut down on their expenses. No manicures for Nance or eating out and their daughter, 19, commutes to school instead of living on campus. This is all for a daycare that has already struggled to keep its the staff members, Nance said.

Nance estimates that daycare consumes around 30percent of her income along with her husband. She is worried that the cost could increase when the emergency funding comes to an end and has begun to look for other costs they can reduce, and is pondering whether their daughter should relocate back to them.

“The cost is just outrageous,” Nance stated.

The impact of economy of the U.S. economy

The disappearance of child care services is expected to ripple effects throughout the economy. will parents be forced to cut their hours or stop working their jobs completely to take care of their children.

The reduction in business and tax revenues will result in states spending $10.6 trillion in the economy annually According the The Century Foundation.

“We’ve got a broken child care system in which parents can’t afford to pay, teachers can afford to stay and businesses in our economy pay the price,” Susan Gale Perry, CEO of the advocacy group Child Care Aware, said.

What are politicians doing

Although politicians from both sides claim that the crisis in child care has to be addressed Republicans as well as Democrats have been unable to come up with an act.

The Biden administration’s attempt in 2021 to broaden access to subsidized child care services and increase the minimum wage for this sector through the Build Back Better plan failed to get through Congress. The same goals are contained in Senator. Patty Murray’s Child Care for Working Families Act which has been introduced for the first time in the year 2017 but has not yet been passed. The bill was revived in April.

“We’ve got a broken child care system in which parents can’t afford to pay, teachers can afford to stay and businesses in our economy pay the price,” Susan Gale Perry, CEO of the advocacy group Child Care Aware, said.

Americans are afraid of a shutdown as Congress resumes following Labor Day. And with it, Americans fear the possibility of a shutdown for their government

Republicans have also had a difficult time trying to pass legislation for child care. Republican senator. Tim Scott of South Carolina and former Sen. Richard Burr of North Carolina last year came up with an amendment that, although being more limited than the Democrats’ plans, would expand access to child care aid by way of the Child Care and Development Block Grant. The bill has been unable to move forward and hasn’t been renewed.

As of now, Democratic lawmakers are pushing for an increase in child care funding to avoid a child-care fiscal cliff that could occur on September. 30. A letter dated July 31 and signed by 30 senators calls on Vice President Joe Biden to demand more than $16 billion of annual investment “by every methods that are feasible.”

“The pandemic emergency relief program provided an urgent lifeline for the industry of child care, but it’s crucial to ensure that at a minimum we keep this level of investment to ensure that the industry’s future is secure and avoid a recurrence of an crisis,” the letter reads.

What can states do to tackle the issue of child care?

A few states, such as Minnesota, Vermont and New York have already begun to boost childcare financing in the event that the federal budget cliff approaches. Other states, like Michigan has implemented public-private partnership programs to divide the costs of child care between the family, the employer as well as the government.

Kashen at The Century Foundation said while the majority of these initiatives won’t suffice to compensate the federal funding that was cut, “it will certainly help.”

Other have proposed eliminating the red tape in order to provide more child care however, critics are concerned that loose restrictions could cause dangers to children’s safety.

“As an entire nation we need to address” How do we going to repair this flawed child care model of business? What is the fair amount for families and the public, business and communities?” Perry from Child Care Aware said. “That is a topic we’re still trying to come to the same conclusion as a nation which we’ll have to confront.”


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