Child care costs: Too much for families, too little for providers | Columnists

Many families struggle to pay the weekly cost of child care, but what they are asked to pay is still less than what it actually costs to operate a child care center, ministry, or home. So how can we even those numbers out? Good question. Parent affordability vs. staff wages and operating expenses is one of the most difficult child care challenges to solve. Noble County is launching a program soon to help qualifying families better afford care. More about that in a bit.

In Indiana, the average cost of child care is around $12,000 per year for a single child. “Affordable” child care is defined as when a family only spends 7% or less of their annual household income on child care. That means in Indiana, families that earn $171,000 per year have affordable child care. According to the Northeast Indiana Regional Partnership, the average median income for a family in Northeast Indiana is just over $61,000.

Locally, some child care centers, ministries, and homes do all they can to keep costs low. But it comes at a price.

“At this time our tuition is only covering about 80% of weekly expenses,” said Rita Steele, director of Lighthouse Childcare and Learning Service in Ligonier. “We are using our stabilization grant to cover the shortage. As our stabilization grant is dwindling away, we are looking into fundraisers to help offset the difference (we had stopped all fundraisers because of COVID).”

Even with the low cost of tuition at Lighthouse, some parents can’t make their payments each week, said Steele. In addition to accepting Child Care Development Fund (CCDF) vouchers, Lighthouse offers multi-child discounts and scholarships to families who struggle but don’t qualify for CCDF.

“We have tried to keep the tuition as low as possible, only having had ONE increase in the last ten years,” said Steele. “But that only led to a small pay raise for staff. I feel like it is important to note that the wages we are able to pay are among the lowest in the area. The only reason most employees in the childcare industry are able to survive is either having a spouse with a salary that supports the family, or having this as extra income, while receiving social security, disability, or another form of assistance.”

During the ages of 0-5, child care providers have a profound impact on the development of our children.

“Most of the Kendallville Day Care Center’s kids are here 8-12 hours a day, 5 days a week, so we are not unlike a third parent,” said center director Tina Lee.

The Kendallville Day Care Center staff are paid up to $18 an hour depending on education levels, but that figure is still below the average for many industries, and is well below the average salary for a K-12 teacher.

Like other businesses, child care facilities have overhead in the form of staff pay, meals for children, and utility bills. Staff are typically just paid a wage – there aren’t any additional benefits. Lighthouse and Kendallville Day Care Center don’t pay is rent. KDCC owns their building, while Lighthouse is grateful to the church for letting them use the space for free. Even without that huge expense, child care loses money every day.

After doing the math for her own center, Lee noted that KDCC loses $13.29 per day, per child.

“We fundraise throughout the year, and we apply for grants and that help make up some of the difference,” said Lee. “We have money market account/savings/and some endowment funds — but it’s not much. We basically break even, hence, non-profit.”

Child care is definitely a business that not many investors want to touch. The business model is crucial to our economy, but its sustainability is shaky from the start. One child care center currently renovating a space to open a new program is seeking funding now to help support operating expenses when it opens next year. Another program indicated to Noble Thrive by 5 that they would need to see two years of local operating support before deciding to move into the area to operate a child care center.

“At the end of the day, society in general needs to understand that our industry, early education, is not unlike the healthcare industry” said Lee. “We all need ‘healthcare’ in some form, to survive. Most humans need ‘childcare’ in some form, to work. Once society realizes the ‘cost’ and ‘work’ it takes to care for a child on a daily basis, perhaps we will see a shift in funding and wages and the like.”

It really comes down to that local support. Child care centers, ministries, and homes need local public and private support to survive. They are critical to keep employees coming to work, to educate our youngest children, and to keep the economy running. With the support of the Noble County Commissioners, Noble County is launching a Tri-Share Program, the first of its kind in Indiana. Modeled after a similar program in Michigan, this pilot program will pull in county and employer funds to support families. We are so grateful to the Noble County Commissioners for seeing the value and economic benefits of supporting child care for families! Find the preliminary details of that proposal here: https://noblethriveby5.org/noble-county-tri-share-proposal/. Some details could change as the program moves toward launch in early 2023.