Dec 14, 2016

Cost and shortage of childcare hinder employment

For as long as memory serves, the lack of jobs in the Northeast Kingdom, generally touted as the most economically depressed area of the state, has been considered the big hindrance to prosperity.

But by most measures, the Northeast Kingdom currently has more jobs than workers willing, or able, to fill them. Unemployment in the Derby labor market area for October was at 3.7 percent, which is generally considered full employment. In this sparsely populated labor market, that means only about 500 people are considered to be unemployed.

Nonetheless, few question the fact that people who could work, and would work, are hindered by what state officials and others consider barriers to unemployment.

“I believe people want to work,” said Neil Morrissette at Creative Work Solutions. “It’s those barriers.”

And childcare is a big one, he said.

Transportation is another, Mr. Morrissette said. It’s expensive to buy and maintain a car, and keep the gas tank filled. Affordable housing is a third.

And then there’s generational poverty, noted Jennifer Cote, who works at the Vocational Rehab office in Newport with young people.

Vermont among worst states for affordable childcare

But in the end, many people return to childcare, both its cost and lack of availability, as a major obstacle to employment for people with children.

If you’re a single mother with two children, how can you work without childcare? Mr. Morrissette wondered. And how does a single parent, or a family, work, if childcare costs eat up their income?

“I know right now that daycare is such an issue,” he said. “We need to figure out how to get more daycares open.”

In fact, a report issued this week by the Blue Ribbon Commission on Financing High Quality, Affordable Child Care says, “Early care and learning or child care is commonly cited as one of the major barriers to work. Access to high quality care for young children can enable parents to work, and to work more hours. Investment in making child care more affordable is an investment in workforce support.”

Although the state provides subsidies, based largely on need, Vermont families still pay 25 to 53 percent of their median income to access early care and learning programs, the report says.

It goes on to say that based on a 2015 study ranking all 50 states, “Vermont ranked thirteenth on the list for having the least affordable centerbased infant care. Vermont ranked third on the list for having the least affordable center-based four-year-old care.”

Lauralee Sweeney is specialized childcare coordinator at NEKCA. She said that a single parent earning $12 an hour would be eligible for a 100 percent subsidy.

“We find that a shortage of childcare seems to be the real problem,” she said.

The Department for Children and Families website says that a family of three or fewer can get a 100 percent subsidy if its monthly gross income is $1,680, or about $420 a week. A family of four can gross $2,025. The subsidy drops to 50 percent when gross income for a family of three rises to $2,760, or a family of four to $3,260. A family of three making $5,040 a month, or a little over $1,000 a week, gets a 10 percent subsidy. And the actual amount of the subsidy depends on more than income.

But that’s at a state approved, registered daycare or licensed center, and there’s a shortage of those. A friend or neighbor could watch children, but it would not be legal to have children from more than two families, and no state subsidy goes with that kind of childcare, though it once did, Ms. Sweeney said.

A relative, such as a grandparent could watch the children, but would be paid only a small amount, rather than the more generous state subsidy that goes to registered caregivers.

Chris Nelson is a longtime childcare provider in North Troy who’s seen it all and said the situation is complex. She said she does know people who don’t join the workforce because of childcare issues. And she knows others who work part-time because they would end up with less money if they worked full-time.

“Taking a full-time job can turn out to be expensive,” Ms. Nelson said.

Ms. Nelson said the subsidy is based on what kind of care the child has as well as the age of the child. If a child’s caregiver is STARS qualified, the subsidy is higher. And the greater number of stars the provider has through that program, the higher the subsidy. STARS stands for Step Ahead Recognition System. It’s designed to recognize quality and applies to childcare, preschool, and afterschool programs.

Also, the rates the state pays are outdated, Ms. Nelson said. If the provider charges $150 a week for an infant, and the state pays only $112 for infant care, the parents have to make up the difference.

And when a family brings in more money, the subsidy goes down.

Ms. Sweeney said that adjustment can’t be made for a year. However, Ms. Nelson said it occurs on the child’s birthday. Those subsidy adjustments lead to what’s called the “cliff” and is mentioned in the childcare report as a discouragement to employment, or at least to adding hours or getting a raise.

The report includes a chart demonstrating how the cliff can kick in in a big way. A family making $20,160 can see its income increase by 3.9 percent to $20,940 and receive just a 1 percent cut in the childcare subsidy. That pattern continues, with the increase in income outweighing the decrease in benefit until a certain income level.

If a family making $23,208 gets a 4.1 percent pay increase to $24,168, their childcare subsidy will drop by 5.3 percent. Another cliff occurs around the 45 percent subsidy mark “in which the incremental increase in income reduces the percent of subsidy received to the point where it is not beneficial to increase income (i.e., earning more money would cause a family’s childcare costs to increase),” the report says.

Another frequently mentioned hindrance to a thriving childcare environment is regulation. At this point the regulations are more than 100 pages, Ms. Nelson said. “And a lot of it has to do with paperwork. Most of the new regulations that adhere to safety are pretty much common sense. Other regulations are based on proven outcomes. Is it for the best? Sure. Is it doable for everyone? No. I see the purpose for the regulations. However, it lengthens a 12-hour day to a 14-hour day. It’s taking time away from the provider.”

Report recommends universal childcare

Regulations have discouraged some from getting into the business and others from staying in it. Ms. Nelson said she got into childcare 20 years ago for the same reason many others do — she couldn’t find care for her own children. She said she doesn’t know if she’d get into the business today.

To meet demand, there’s something of an underground childcare network out there, Ms. Nelson said.

“They give them to grandparents, their neighbors.”

With a shortage of quality registered or licensed childcare, people have two options: Go underground and work, or stay home.

Ms. Nelson said she has nine on her waiting list at the moment.

The Blue Ribbon commission on Financing High Quality, Affordable Child Care is composed of childcare providers, business representatives, child advocates, and others. It has been working since September of 2015 on coming up with recommendations.

Childcare is more than babysitting, its report says. “The science is clear, high quality early care and learning matters.” Disparities in vocabulary begin to appear as early as 18 months in children who are not exposed to high quality care, the report says. It goes on to say that early care and learning is critical to Vermont’s economic well-being. “Every dollar spent in high quality early care and learning programs yields a return in investment that ranges from $4-$9.”

There are currently over 36,000 children five or younger in Vermont — 6,023 infants, 12,224 toddlers, and 18,360 preschoolers, it says. 

And to illustrate the lack of quality care that the report’s authors says is so badly needed, they wrote: “Nearly half of all infants and toddlers likely to need care do not have access to any regulated early care program.”

The report also extensively addresses the need for affordability. The Child Care Financial Assistance Program subsidizes 23 percent of families seeking regulated care, spending about $130-million, it says. The remaining roughly 75 percent of families pay full tuition. After defining high quality care, the commission estimates the cost of providing it. At a center, care for infants and toddlers was estimated to cost $35,000 per child and $15,000 per child for preschoolers. For home-based care, the estimated cost was about $41,000 per infant, $21,000 per toddler, and $14,000 per preschooler.

“…the Commission concluded that providing 100 percent benefit to families earning up to roughly $60,000 and slowly tapering off that support until families earn $180,000 would make accessing high-quality care and learning affordable.”

The goal it recommends is to move toward universal childcare. The current model doesn’t work, the commission’s report says.

“Unfortunately, in the current delivery system, this level of quality would be unaffordable for 90 percent of Vermont families. Vermont’s current system does not have sufficient capacity or resources to meet the needs of young children and their families.”

The commission recommended that Vermont immediately begin to make annual investments in quality, affordable childcare and that the care system be redesigned. It goes on to suggest financing mechanisms.

Ms. Nelson has a more home-based idea. In the Northeast Kingdom, businesses and community members should come together and figure out ways to support childcare sites, she said.

Pay for childcare providers, which is notoriously low, needs to come up, Ms. Nelson said, an assessment the Blue Ribbon Commission heartily agrees with, saying that the main reason childcare providers get out of the business is the low pay and lack of benefits.

And that low pay is not reliable. If a working parent gets injured or sick, the child is pulled from daycare so the provider’s income goes down.

“If you want to make Vermont, or the Northeast Kingdom, a place where people can work and want to work,” it’s vital to provide a safe place where they children can receive quality care, Ms. Nelson said.

Click here to go to the Barton Chronicle website. 

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