NEW HANOVER COUNTY –– The pandemic inflamed pre-existing wounds in the childcare industry nationwide, with a palpable effect on parents, workers, and business owners.
Problems were always there, but the past year elevated issues to a crisis level, worthy of examination and even systemwide reimagination.
CATCH UP ON PART ONE: Nearly 750 children on waitlist for childcare subsidies, industry struggling
Latest difficulties highlight the vulnerability of the system, a delicate backbone of the economy.
When schools shuttered beginning last spring, daycares had to stay open for the safe-keeping of children of nurses, grocery employees, and other frontline workers, rendering childcare staffers themselves part of the essential pandemic fabric.
“A lot of the curtain got pulled,” said Jane Morrow, executive director of Smart Start New Hanover County. “I think it became a little bit more apparent how critical childcare is to our economy and how fragile our childcare system is right now.”
Unlike the public school system, childcare is a largely privatized industry, widely regarded as under-supported by advocates (per pupil spending for school-age children dwarfs the public investment in those from birth to 5 years). This leaves a gaping affordability gap, which most severely strains low- and middle-income families.
For example, the U.S. Department of Health and Human Services has determined childcare is unaffordable when it exceeds over 7% of household income; in North Carolina, low-income families can’t access public vouchers until they’ve spent at least 10% of their earnings on childcare. Families can earn less than the area median income ($65,100 for a family of four in New Hanover County, according to HUD), barely enough to afford market rate housing in Wilmington, but make too much to qualify for vouchers in North Carolina ($53,004).
Yet, meeting the voucher eligibility doesn’t guarantee placement: In New Hanover County, nearly 750 eligible children are on the waitlist, though state funding is on the way to lower that number to 134.
While releasing a comprehensive study on the industry last month, Treasury Secretary Janet Yellen called childcare a “textbook example of a broken market.”
A vital peg in the economy, underpaid workers, over-strained parents, and barely profitable business owners make for an unsustainable recipe.
Loss of workers, demand still high
Like other low-paying fields, Covid-19 triggered an exodus of employees in the childcare industry seeking more stable employment opportunities with higher hourly rates and benefits.
New Hanover County lost 8% of its childcare workforce between the first quarter of 2020 and 2021, according to the latest state commerce data. One in 10 left the industry statewide, with nearly 3,400 yet to return.
The slight ripple makes a tangible difference in the field, with regulated centers compelled to follow certain child-to-staff ratios. When a position is left vacant, each unfilled position represents a number of children that a center can’t enroll (from four babies under 1 to up to 20 4-to-5-year-olds).
Required minimum ratios, designed to ensure children are safely attended to, can add to the pressure teachers feel to not call out of work, knowing families are reliant on sending their children to the centers to make it to their jobs. Also, workers may not be able to afford to take a day off: About 20% of centers in New Hanover don’t provide paid sick leave.
“It stresses staff out sometimes because, any other job, you call out, and there’s a plan B,” said Kynesha Anderson, assistant director of Young Memories Learning Center on Peachtree Avenue. “So if one teacher calls out yet 10 kids show up, of course we have to find an immediate replacement for that day. We do what we have to do to get the staffing.”
Waitlists and full classrooms are typical. “The normal time to put in the application is before you give birth, so by the time you do give birth and six weeks passes, there will be a spot,” Anderson said.
One childcare administrator, who asked to remain anonymous, said staffing difficulties has left her Wilmington center running with two empty classrooms that could be filled with 40 more students. “No one is applying,” she said. “[W]e get a referral, maybe once or twice a month, but then they don’t show up for interviews.”
The center is currently operating with 15 employees; it could staff up to 34. “It’s always been rough but it’s progressively becoming worse since the pandemic,” she said.
She left a good-paying nannying job when she was pregnant with her firstborn, working 50 to 60 hour weeks at the center so she could get a discount on tuition. With her son now just over 1 month old, she’ll be charged half price for tuition once she returns from maternity leave in a couple of weeks.
“My school is one of the cheaper [ones] in the area and I still would not be able to afford it otherwise,” she said.
In New Hanover County, the market rate for high-quality care (centers rated three stars or higher out of a five-star rating system) for children under 5 is roughly $8,800 to $10,200 annually.
When more than two young children are involved, those costs can double, placing many parents at a crossroads: Rather than work to afford childcare, most often women opt to quit altogether. Childcare costs share the blame for a lagging female workforce participation rate nationwide.
Last year, Kate Cote found out she and her husband were expecting twins. She had worked in insurance for five years and had no plans of being a stay-at-home mom. “With the salary I was making and two infants to put in daycare, the majority of my salary would be going to childcare costs,” she said. “When I called for prices I found it ranged from $1,500 to $2,200 a month with little to no discount for the second child.”
So they decided she should stay home. She feels grateful to be immersed with the twins, now expecting a third, but said she still finds herself looking for jobs she can’t apply for.
“I am thankful we can make it work,” she said. “But I also have a tough time watching my husband take on the financial weight because I know that’s also not an easy task.”
As parents unload serious lumps of income toward childcare (or don’t, and exit the workforce altogether, making a long-lasting impact on their lifelong earnings potential), daycare workers are paid poverty-level wages.
Childcare employees are paid an average of $14 an hour in New Hanover County, on par with the state average, according to state commerce data; the starting local wage is $10 an hour (which amounts to a $20,000 salary, under the poverty line). Less than half of the centers in New Hanover County provide full or partial healthcare to their employees, according to a 2019 Child Care Services Association survey.
Parents quickly crunch the numbers: If they’re paying a sizable chunk of their income on daycare fees, why won’t they invest more in their employees?
“All my career I have been aware of that disconnect for families: Where does this money go?” said Meaghan Gilbert, director of Primrose School of Wilmington at Medical Center. “It’s very hard to understand, particularly as a parent when you are shelling out maybe the cost of a mortgage for childcare every month. And it seems like, well, if everyone’s paying this, then absolutely these businesses must just be raking it in.”
On a national scale, the businesses are not raking it in. Margins are precariously slim, with bulky overhead costs that include payroll expenses that eat up a disproportionately larger share of revenue compared to other industries, given higher staffing demands. “These are big facilities with tons of water and power usage,” Gilbert said. “Just the cost of insurance for what we do is so enormous.”
Tara D’Meza, owner of Porter’s Neck Play House, recently started a full-time job elsewhere so she could obtain benefits but still keep her business running. If the small daycare were to close, “the families that I’ve gotten to know over the last years, I think they would be in a real predicament,” she said. “I’m gonna do everything I can, including getting a second job, to make sure that it stays open.”
With three children of her own, D’Meza started the business because she needed childcare and couldn’t afford it. As an unlicensed daycare, D’Meza initially thought perhaps she’d save on licensing fees and make more money. (That didn’t happen.)
“Unfortunately, my employees aren’t making a whole lot of money either,” she said. “I feel bad for them because we’re dealing with, you know, 15 to 20 kids, for $12 an hour when they could probably go to McDonald’s and make 14 or 15.”
Why can’t she increase their pay? “Because I don’t charge my customers more. It has everything to do with the margins and to keep it competitive as well,” she said. With parents vocal industry-wide about the burden childcare expenses place on families, business owners are reticent to bump up tuition, knowing it can quickly stop making financial sense for their clients.
Low pay, little or no benefits, and often draining working conditions contribute to the industry’s persistent turnover crisis. About one in five full-time childcare teachers in North Carolina left their facility year-over-year, according to a 2019 statewide study.
A female-dominated field with a disproportionate amount of Black workers, the industry has historically been undervalued by regulators, experts argue.
“The devaluation of early childhood education is situated within a historical context of systemic injustice that continues to deeply impact the field of 99% women and 47% people of color,” according to a turnover report produced by Child Care Services Association last year. “North Carolina’s policymakers and governmental institutions have a responsibility and an opportunity to repair legacies of racism and sexism that have helped produce the current turnover crisis.”
Research suggests attrition also negatively affects the children centers serve, who rely on consistent routines and social bonds for proper development.
“Finding people with a great talent for it is rare because it requires so many skills, from interpersonal skills with families, to incredible patience, and an ability to deal with chaos, and then also a great amount of education and knowledge about how to educate young children,” Gilbert said.
Childcare workers are often tasked with delivering prickly information to parents, like if their child is bothering others or causing disciplinary problems.
“I think it just takes a lot on the workers at daycare facilities to maintain a pleasant atmosphere for everybody and keep coming back every day with such low paychecks,” D’Meza said. “You have to really love children to come back every day and not get paid very well for it.”
The pandemic’s squeeze on the already destabilized industry led not just to a loss in numbers on the staffing front –– their experience left with them.
D’Meza lost the retired, “grandmother-ly” types of employees she had come to rely on –– women who viewed the job as a supplement to other forms of fixed income. Teachers with experience, trained in early childhood education, left Gilbert’s center for alternate careers.
“It’s really been an eye-opener, as far as how much we value seasoned employees,” Gilbert said of the pandemic-induced flight. “The loss of them to other fields has been enormous.”
One positive aspect to the reckoning, Gilbert pointed out, is the “widespread recognition that what we do is incredibly important –– that we are not babysitters.
“We are raising the next generation. And that the work we do with them as infants and toddlers, shapes their brain development forever, and that this isn’t something that just anyone can do,” she said.
“We are essential to the functioning of the economy and to the education of young children.”
Send tips and comments to Johanna F. Still at firstname.lastname@example.org