Wednesday, June 12, 2024

Early education economics need investment to fix.

The Broken Market for Child Care and Early Education

  • Suzanne Brault is a consultant with experience in early child care and education.
  • She says the market for child care and early education is broken with major implications for families, businesses and government.
  • She calls for a major state and federal investment in the system.

We know who they are, frantic parents searching for infant care, learning their only option is to be placed on yet another waiting list. Grandparents, (some joyful, many exhausted), tapped to care for the 3-year-old T-Rex who continues to bite her baby brother. Employers, thrilled to find the elusive new hire, now tangled in the search for child care in order to land them. These moments, all snapshots of people experiencing our broken child care landscape.

Our inability to address the market failure, the product (child care) too costly for the buyer (parent) to afford, is untenable. We can and must do better, acknowledging the true cost of care and tremendous value inherent in early care and education is essential to finding solutions.

We speak of our children as treasures, their future happiness and success as a resource. When parents go to work, someone needs to care for and educate our children. According to the Annie E. Casey Foundation, in Wisconsin 73% of available caregivers for children under 6 are in the workforce. Each and every child is unique, with an astounding 90% of brain development occurring from birth to five. Parents, weighing the cost of care (often exceeding the mortgage payment or equal to college tuition) face finances stretched so thin as to question the logic of staying in or returning to the workforce.

The High Cost of Child Care

Why is the cost so high and wages for providers so horribly low? High-quality early care and education costs a lot, well above current market and subsidy rates in the region and what most families can afford. The bulk of the cost for child care covers the wages of the workforce; this is a labor intensive business without the option for automation. Child care businesses typically make a much smaller profit margin (1-2%) than most businesses (10-20%). As a result, most child care businesses can only offer poverty level wages to their workforce, less than other jobs with similar education levels. In a recent survey, 80% of child care providers said compensation was the No. 1 recruitment and retention problem.

The Essential Workforce in Crisis

The essential workforce, providing quality care and education that our children deserve, is stressed to the breaking point; low-wages, demanding work and mindsets that devalue the child care workforce hastening the flight to other jobs.

Federal pandemic relief dollars have been a critical lifeline, helping to keep centers open and care available. These dollars have been invested in multiple ways, including a key provision, the Child Care Counts Program with dedicated support payments to address provider and staff compensation necessary to secure and retain this valued workforce. This federal support will expire January 2024.

The Call for State and Federal Investment in Child Care

Wisconsin’s 2023-25 biennial budget priorities are currently being debated in our state Legislature. The call for state investment of $300 million to continue the Child Care Counts Program supports our child care and early education workforce and child care as essential infrastructure necessary for thriving families and economic growth and stability.

To be clear, the substantial investment of federal relief dollars has barely kept the child care system afloat. Even with this support, programs strain to find and retain staff, vacant rooms taunt parents seeking care, and employers’ job openings remain unfilled. State and federal investment is a priority need.

There are many bright spots. Throughout our state, communities are highly engaged, seeking to understand the complex care system and root causes for why the system is collapsing and working to create public/private partnerships and models of care that meet the needs of children, families, and providers. Regionally, the Greater Fox Valley Child Care Alliance is hosting a series of learning and action events, you too can engage and join efforts to co-create systems of care. (Click here to learn more about the Fox Cities event.)

The stage is set, without sustainable state investment and commitment to ECE, parents face higher costs, withering choice, forcing decisions for their families, economic stability, and future success. ECE as infrastructure, is a priority need, please urge your legislator to support continuation of the Child Care Counts Program in 2023-23 biennial budget deliberations.

Suzanne Brault is principal at Brault Consulting LLC, which provides strategic support and guidance to public sector and non-profit organizations. Her areas of expertise include advocacy, cross-sector relationship building, and early care and education.


About Casper Wong

Casper Wong is an experienced blogger who specializes in education and career development. His blog posts are a valuable resource for individuals seeking guidance on how to succeed in their academic and professional pursuits. With a wealth of knowledge and insights, Casper empowers his readers to reach their full potential and achieve their career goals. Follow him to discover the keys to lifelong learning and career success.

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