Where Is the American Child Care Bailout?

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Ellicia Lanier, 39, executive director of Urban Sprouts Child Development Center in University City, Missouri, outside St. Louis, considers herself one of the lucky ones. A Black mother of seven whose interest in early childhood development led her to start a nonprofit early learning center, she’s fought to keep her business afloat amid the punishing economic currents of the coronavirus crisis. 

“There is no economic recovery without child care, that’s the best way to put it,” she says. “As a nation, we haven’t realized how critical child care is to all facets of our lives.” 

She’s lucky, insofar as she’s still in business. Urban Sprouts serves mixed-income children — 57 percent come from low- to moderate-income families, 62% are from families of color. It closed on March 26, per area lockdown orders, and reopened the week of July 6, able to serve half the typical number of children due to social distancing mandates. During the months it was closed and unable to make money, the center stayed open thanks to donations, a PPP loan (enough to cover eight weeks of payroll), as well as a $22,000 grant by St. Louis County, part of the county’s child care Relief Program, one of a handful of local government initiatives across the country.

Lanier admits she’s an atypical case; few child care providers have the resources to pursue government loans, or an established donor network to tap for help. And where does all that help leave Urban Sprouts?

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“I’m probably at 30 days,” she told CityLab last week, referring to how long she can keep her doors open without a significant infusion of funding. “The state government said they won’t bail out early childhood. It’s quite scary.” 

According to providers, researchers, and advocates, it’s no exaggeration to say that without government investment and assistance — from local sources, but most importantly, state and federal governments — the U.S. child care system as we know it may collapse, just as uncertainty around school reopenings puts so many parents in an impossible bind. This week, presidential candidate Joe Biden made the crisis in the child care sector the focus of one of his campaign proposals for economic recovery, pledging $775 billion for caregivers who are “underpaid, unseen and undervalued.” Biden promises the plan would create 3 million new jobs in the industry in the next decade. 

Any such effort would seek to repair and rebuild a system that has long been overlooked.

“Child care has been in a crisis before, and advocates have been sounding the alarm since March,” says Elliot Haspel, a child care policy expert and author of Crawling Behind: America's Child Care Crisis and How to Fix It. “It’s now the end of July, and we haven’t seen significant action at the federal level. We’re seeing high-quality programs close their doors permanently, which will impact our kids and the economy. It’s just a stunning indictment of how we treat early childhood education in this country.” 

As gloomy as that assessment sounds, the situation may soon be even worse. A July 13 survey of 5,000 child care providers by the National Association for the Education of Young Children found that two of every five child care businesses are certain they’ll close permanently without any further assistance. Consider the challenging environment they must operate in amid coronavirus health restrictions: 86% of centers are serving fewer kids, the survey found, overall enrollment is down 67% on average, and 70% of centers are incurring “substantial, additional costs” including providing personal protective equipment (PPE). Before the pandemic, 2 out of every 3 young children had all available parents and guardians in the workforce, Haspel adds, and 26.8 million U.S. workers are dependent on child care to work.

“There’s a sense that child care centers are reopening, but they’re opening at such reduced capacity, with many fewer kids,” says Katie Hamm, vice president of early childhood policy at the Center for American Progress. “There’s no way to keep doing this without a rescue package from Congress. It’s beyond baffling to me that we can bail out hotels and casinos, but child care has to fight for every penny. It’s not a coincidence this is work done mostly by women, especially Black and Brown women.” 

Haspel predicts that without more help — the CARES Act, passed in March, provided $3.5 billion for child care — there will be increased hardships for families, with some working parents having to cut their hours or give up their jobs altogether to keep up with child care. For many families, informal child care arrangements with friends or family members will permanently replace traditional child care or early learning programs. 

“We’re going to lose licensed child care as we know it,” says Hamm. “Child care providers have held on as long as they can. They’ve been doing this for four months without sufficient resources. They can’t hold our economic recovery together any longer.” 

The child care system in the U.S. was far from ideal before the coronavirus pandemic, especially in urban areas. In expensive cities such as New York, San Francisco, or D.C., families can pay upwards of $20,000 or more a year for full-time care for one child, thanks to the rent costs incurred by providers. That creates huge inequalities around who can afford such care, in part leading to “child care deserts,” parts of the country where there aren’t enough providers to meet local needs. In St. Louis County, Urban Sprouts typically served 124 children a day before the pandemic, max capacity. Lanier says there’s a waitlist of 400 families, since “there’s such a need for quality child care within the region.”  

That cost challenge creates significant equity issues for children of color, who have much less access to affordable child care. This inequity is having a “tremendously disproportionate impact on people of color” during the pandemic, says Haspel. A University of Oregon study chronicling the impact the Covid crisis is having on families has found that by just about every measure — health, stress, learning — this pandemic is “hammering” lower-income families and families of color, says Haspel. 

The child care workforce — which is low-paid and mostly women, especially women of color — has also been hard hit. A third have lost their jobs, Haspel says, and many lack adequate health care. And since these workers tend to be older, the risks they face from Covid-19 are particularly stark. “This is just a body blow to children of color and their parents,” Haspel says. “This just exacerbates education and learning gaps. It’s hard to square the movement for racial justice right now, and the way leaders are dragging their feet. The entire child care industry in this nation got less CARES Act funding than Delta Airlines.”   

There’s been inconsistent guidance from many state and local leaders around safety precautions and reopening, says Hamm, as well as communications issues around the true risk of transmission from children under 10. A spike in cases at daycare centers in Texas has raised fresh alarms. A host of additional challenges await when the school year — in whatever form it ends up taking — resumes in the fall, such as determining if a sick child has the flu or Covid. 

All this adds up to a huge decline in maternal labor force participation. “It’s women who are stepping back from their jobs and taking on more of the caregiving responsibility,” Hamm says. “We’ll see big declines in women working that could set us back decades and have broad implications for the economy.” 

For cities desperate to restart their economies, the child care crisis presents a significant roadblock. While many have invested significant money in early childhood education, such as programs in D.C., and New York City, there have still been inequalities in access, says Hamm, and city budgets already face huge pandemic-related shortfalls (and are unable to run a deficit, like the federal government). 

“Cities and states are trying, many are doing their best,” says Haspel, “But the scale of the money needed, with existing centers hemorrhaging money every month and cities facing declining sales tax revenues, means cities just don’t have a lot of ammunition. They’re trying to take out a five-alarm fire with a toy water gun.” 

That hasn’t stopped many cities, and local nonprofits and philanthropies, from trying, according to Tonja Rucker, director of Early Childhood Success at the National League of Cities (NLC). In Philadelphia, a coalition of local philanthropies provided $7 million to support the child care sector. Other cities have tried to support child care centers, especially those taking care of the kids of essential workers, with logistical help as well as PPE. 

In D.C., five local foundations banded together to provide $1 million to child care providers, offering up to $8,000 grants. Shauna Goldman, a project lead at Mary’s Center, which is helping disperse the aid, says that the goal was to both help keep care resources available to working parents, and help small businesses survive. 

“These are women of color, and this is their bread and butter,” she says of the center owners. “Many have been in the game for 30 years.” 

The St. Louis County program that bolstered Urban Sprouts’s finances grew out of conversations held between local government and Ready by Five, a coalition of local child care providers. (Lanier is on the steering committee.) According to Cora Walker, the county’s director of policy, the city heard the group’s demands, and allocated $5.9 million to provide grants to alleviate the financial hardship businesses were facing. Walker calls this “a down payment on something we’ve determined is a priority,” with the money coming from the county’s $173 million CARES Act funding. 

“We hope this can help other people see how critical child care is to the economy,” she says. 

There are signs of potential federal support on the horizon. The Child Care is Essential Act, co-sponsored by Washington Senator Patty Murray, would provide $50 billion for the industry. Haspel says that would be “absolutely the right interim step, a stopgap rescue to keep the industry from drowning,” and answer the requests advocates have for funding to last through the next five to six months. In comments Tuesday, Senate Majority Leader Mitch McConnell indicated that a second round of checks in a proposed stimulus package would include relief aimed at schools and child care, which is said to be a topic of interest to McConnell. But time is of the essence. Even if it’s passed today, money wouldn’t appear in bank accounts until September, says Haspel.  

As politicians debate rescue packages, child care advocates are puzzled that their industry, so central to a fully functioning economy, isn’t getting more attention. 

“Not helping child care providers is absolutely putting a cannonball around the ankle of economic recovery,” says Haspel, who does expect Congress to eventually act. “We may see economic recovery at the expense of young children, which is a truly heinous choice to make. We’re putting parents in impossible situations by not stabilizing the child care industry, and it’ll have cascading effects on the economy.”

Rucker at the NLC hopes that this crisis, and hopefully its resolution, will show leaders that child care is essential infrastructure; this could be an opportunity to start building it back better. 

“We’ve got some work to do,” she says. “People knew, but didn’t really know, how essential quality places for kids to go really is.”

Patrick Sisson is a Los Angeles-based writer interested in cities, culture, and the trends that shape urban life.

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