This article was originally published in the Ohio Capital Journal.
Access to child care and ensuring adequate staffing in child care centers is a “crisis” for which many federal and state agencies are seeking solutions.
For advocates and economic experts, the role of businesses and employers is becoming increasingly important not only in ending Ohio’s child care struggle, but also in preventing the state from suffering major economic damage as a result.
At 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.
Get stories like this delivered straight to your inbox. Sign up for the 74 newsletter
“The question is not who is responsible, but whose interest it is in. And for employers, there are real economic reasons for this,” says Sarah Savage, senior policy analyst and policy adviser at the Federal Reserve Bank of Boston.
Savage said on-site care and child care subsidies are “rarely offered” even in organizations with 5,000 or more employees, citing a private 2023 Mercer study.
This study found that 10% of employers with more than 5,000 employees offer on-site childcare, while 40% of companies of this size do not offer any of the services listed, including childcare referrals, tutoring, subsidies or reimbursement.
Companies have their own role to play, but the child care sector cannot improve without first addressing its own workforce problems, says Kyle Fee, policy adviser at the Federal Reserve Bank of Cleveland.
According to Fee, workforce problems are a “central constraint in the childcare situation,” and many of the patterns evident in employee retention and pay are “typical of low-paying jobs.”
Citing a 2019 national survey of early childhood care and education, Fee said one-third of child care centers had staff turnover of 20% or more, with turnover higher in lower-paying centers. This turnover was also related to the combination of pay and the amount of child care and education services offered at these centers, according to Fee.
The profile of the workforce shows primarily younger female employees who are “more diverse in terms of race and ethnicity than the workforce in general,” said Fee.
In 2022, child care workers had the 10th lowest median annual wage nationwide, just ahead of fast-food workers and cashiers, and Fee said Ohio estimates “tend to be a little lower.”
“The salary of a child care worker in no state is enough to provide a living wage for a single adult and child,” Fee said.
These figures refer to those who remain in the workforce, a population group that, according to Fee’s analysis, is steadily declining.
He found that between 2010 and 2022, on average, about 15% of child care workers left the profession, which is more than the 8-9% of preschool and kindergarten teachers who left the profession during the same period.
In 2022, turnover in the child care industry was 65% higher than in “typical occupations,” Fee said.
On average, half of employees who give up childcare jobs do not return to work at all.
“The focus here is again on the turnover among child care workers entering and leaving the labour market. This needs to be further investigated,” he said.
Groups in Ohio are trying to improve pay conditions for workers but also maintain the quality of the centers to encourage more families to enroll.
Nancy Mendez, president and CEO of the Northeast Ohio child care organization Starting Point, said they have worked on partnerships with Cuyahoga County to provide preschool scholarships for children earning up to 300 percent of the federal poverty level and have used federal funds from ARPA to provide scholarships and bonuses for child care staff.
“We are trying our best to help stabilize this system,” says Mendez, whose organization helps daycare centers maintain their quality and connects parents with services in the area.
But higher wages also mean higher tuition, which can lead to lower enrollment as families lack the money to cover rising costs for child care and everything else. This creates a vicious cycle for the centers, according to Mendez.
“It’s a chicken-and-egg thing here that they really can’t solve,” Mendez said.
The organization observed that the COVID-19 pandemic impacted many economic sectors across the state, with child care being particularly hard and lastingly hit.
“We were waiting for this tsunami of low enrollment and staffing problems to pass like all the others, but we saw our staffing problems getting worse and worse,” Mendez said.
60% of the daycare centers and children’s homes that Starting Point works with reported that they “are not enrolling enough children, mainly due to staffing issues.”
In order to achieve a black zero, childcare facilities would have to have an occupancy rate of at least 70%, according to Mendez.
The lack of affordable child care combined with staff shortages has created a situation that Mendez and the panel’s policy advisers say will impact the economy. Mendez said neighboring states like Pennsylvania and Michigan have suffered estimated economic losses of more than $2 billion due to child care shortages.
“I wouldn’t be surprised if we lose about $2 billion a year in Ohio because of child care not working or not having access to it,” she added.
Legislative initiatives have been introduced to create a partnership between employers and states on child care costs, as well as attempts to create a tax credit for child care and family expenses and even a tax credit for Ohioans who contribute to child care facilities. Many of these initiatives are led by Republicans, giving them a greater chance of passing in the House and Senate, where Republicans have a two-thirds majority.
However, the Ohio General Assembly is taking a recess until the fall, likely after the November election, so the measures will not be implemented until the end of the General Assembly’s term. If no action is taken by December, the measures will have to be reintroduced in the new year.
Ohio Capital Journal is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) nonprofit organization. Ohio Capital Journal maintains its editorial independence. If you have any questions, contact Editor David Dewitt at [email protected]. Follow Ohio Capital Journal on Facebook and X.
