Care for the Caregivers

Being a child-care provider in the U.S. often means living at the edges of poverty. The average salary for the nation's 2.3 million child-care workers is $19,605, according to the National Association of Child Care Resource & Referral Agencies, a Washington, D.C.-based lobbying organization. That's just a hair above the poverty level for a family of three.

Despite their meager incomes, the women who provide daily care to the nation's children -- 95 percent of workers in the field are female -- are increasingly expected to provide their charges with quality learning experiences. Research has shown that early-childhood learning is a key indicator for future academic and personal success, and in recent years, policy-makers and advocates have embraced the idea that child-care workers are an essential yet neglected part of the equation. Gone are the days when child-care workers were seen as doing little more than handing out blocks and Barbies.

In theory, it's a welcome shift for providers, who have long known that they play an integral part in the intellectual and emotional development of the children they watch. But in practice, we are a long way from treating, training, or paying child-care workers as professionals. Some 1.1 million child-care workers are paid relatives, neighbors, or friends. They often lack the necessary resources to create engaging curriculum; only about half of them have any college education. Teachers employed by child-care centers are much more likely to have some college education, but they only make up a quarter of the nation's child-care workforce.

The federal government, however, could change that by making a commitment to train and pay child-care providers as early-childhood professionals. The government's basic tool is the federal subsidy program known as the Child Care Development Block Grant (CCDBG). The voucher-based subsidy allows low-income parents to afford child care but doesn't ensure decent pay.

By setting well-funded pay standards and creating a framework and financing for educational opportunities, the federal government could significantly increase earnings for child-care workers. Paying providers in subsidized programs at or above the private market rate, and not well below it, is a clear answer to lagging wages. Better pay for increased training and education can create a more professionalized workforce, which in turn can demand higher wages for high-quality child-care programs.

Last year, CCDBG funneled about $7 billion into child-care vouchers. In 2008, the program subsidized care for 1.6 million children each month, just a small fraction of those in need. About 15 million are thought to be eligible based on their family's income. The program expanded during the welfare-reform era in the late 1990s, when Congress allocated money in the form of a block grant to states, which receive additional matching funds when they continue to spend above a benchmark set in 1996.

CCDBG provides vouchers to parents, who use them to pay child-care providers and centers. The workers are then reimbursed, but at wildly varying rates.

States are charged with surveying regional markets every two years. They determine a rate based on a number of factors, including how much unsubsidized parents pay, the region, type of care, and a child's age. For subsidized children, the rate is a combination of a parent's co-pay and the state's share of the child-care services. Parents, when possible, pay the co-pay upfront, and the state sends payments to the center or provider.

No one precisely tracks how subsidy dollars translate into salaries, which typically account for 70 percent to 80 percent of a center's costs. What is known is that reimbursement rates help drive a center's business model, which also includes revenue from parents who pay the full cost of care as well as donations from local charities. Obviously, higher earnings will require higher subsidies.

Currently, though, there are no mandatory federal pay standards for centers or individuals who take care of children receiving subsidies. The federal government recommends but does not require states to pay at 75 percent of the market rate. However, only nine states actually did so in 2009.

The Department of Health and Human Services surveyed centers in urban areas across the country in 2003 and found a wide range of reimbursement rates. In Michigan, for example, the subsidy paid $2.85 per child per hour to a center for infant care. In Wisconsin, the common reimbursement rate was $7.17 per hour for the same type of care. What the voucher doesn't cover has to come out of either a parent's pocket or a worker's, making it even harder for providers to get paid decently while also limiting access to many families.

If you consider that 70 percent to 80 percent of these subsidies might be used to pay a worker's salary that averages less than $10 an hour, it's not hard to imagine why turnover in the field is high. By contrast, teachers in Head Start, the original federal early childhood program, who have a bachelor's degree make $28,000 on average, and the highest-paid pre-school teachers make at least $44,000. (That's $13.50 and $21 per hour, respectively, for a 40-hour workweek.)

Thirty-three states have tried to encourage retention and professional development for child-care workers by adding bonuses and incentives based on continuing education and the workers' involvement in quality-rating programs. However, these typically translate into fairly meager pay increases.

Pennsylvania's Keystone Stars program adds on as much as $3 to the standard daily reimbursement rate if a provider reaches its highest level in the quality-rating program. That can add up if the center serves several subsidized children, but there is no guarantee that increased revenue will lead to higher wages.

In Louisiana, a provider who owns her business and reaches the highest level in the state's quality-rating program can receive a refundable tax credit as high as $1,500 per subsidized child. Center directors and staff are also eligible for tax credits when they participate in educational workshops and trainings. In many cases, states offer financial assistance for workers who want baseline or additional credentials. These are more direct sources of income and assistance than subsidy bonuses, but they are often one-time payments instead of a steady and reliable paycheck.

Some child-care workers in search of higher wages and professional development have organized unions. Typically, this requires a state law or executive order allowing child-care workers, who are often paid as independent contractors, to form bargaining units. Fourteen states now have collective-bargaining agreements with child-care workers. These agreements have often won union members steady increases to their reimbursement rates, training incentives, and in some cases health insurance.

Faith Arnold, who directs Sun Children Childcare in Bellwood, Illinois, belongs to a Service Employees International Union local. SEIU represents 9,000 center-based workers and 40,000 license-exempt "family, friend, and neighbor" providers in the state. Thanks to the union, Arnold's reimbursement rate has increased from $21 per child per day to between $25 and $28.

Arnold, 52, recently received a bachelor's degree in early childhood education, which she paid for in part with a state grant. She is currently working to raise her center's quality rating. If she reaches this benchmark, she will receive an additional 15 percent. These increased reimbursement and salary levels were the result of an agreement between the union and the state, which provided collective bargaining rights and increased available funds for worker pay.

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While state-based programs and unionization have been crucial to improving wages and creating professional development opportunities for child-care workers, the federal government could dramatically reshape the federal block grant for an even greater effect. The program hasn't been reauthorized by Congress since 1996, and the loose guidelines set 14 years ago are in desperate need of revision.

Helen Blank, director of leadership and public policy at the National Women's Law Center, says the government, at minimum, needs to not just suggest a 75th percentile reimbursement rate but require it. Additionally, any state quality-rating systems must include mechanisms to help teachers get credentials. These essential changes, Blank adds, will take a lot more money.

"It's an under-resourced system," Blank says. "You can't keep [spending] at the same level and expect to have higher wages." Inadequate funding often pits parents -- who are struggling to pay for child care to begin with -- against providers.

Ideally, Blank would like to see approximately $200 billion go into CCDBG over the next five years. That would provide vouchers for 4 million children at up to 200 percent of the poverty level, improve program quality, and boost reimbursement rates. The program served 1.6 million children in 2008 at 150 percent of the poverty level.

One way to increase CCDBG spending is through President Barack Obama's proposed Early Learning Challenge Fund, a 10-year outlay of $10 billion to support state-based approaches to improving early childhood education. It was attached to the health-care reform bill but was dropped when Congress required that legislation to become budget-neutral. House and Senate committees recently passed increases of $700 million and $1 billion, respectively, for CCDBG funding, and the Senate even added $300 million for an Early Learning Challenge Fund. It's a start, but the proposed increases still have to make it through an increasingly partisan Congress.

Louise Stoney, co-director of the Linking Economic Development and Child Care Project at Cornell University, wants the government to overhaul early-childhood spending by creating a framework for quality-rating systems for all programs that receive federal dollars, including CCDBG. This would mean restructuring not only CCDBG but also a program like Head Start so that it was part of the same quality system. The government's role, Stoney says, would be to model a new system and assist states with implementing it in steps. "These can't be separate silos in separate programs," she says.

The Child Care Bureau, which oversees the CCDBG program has been working to develop new quality and reimbursement benchmarks for the program, but Associate Director Shannon Rudisill says they will be voluntary. In particular, the bureau has focused on giving states clearer guidance on how to spend funding on improving quality and how to create consistent quality-rating systems. As for higher wages, Rudisill says that will largely be dependent on finding ways to increase reimbursement rates and offer professional-development opportunities to workers.

A renewed obsession with deficit reduction, however, severely reduces the likelihood that Congress will approve a huge investment despite evidence that shows not only that early childhood education is imperative for future success but also that money spent on child care has a significant multiplier effect in a regional economy. A dollar spent in the child-care sector leads to $2 of increased local economic activity, says Cornell University professor Mildred Warner.

Danielle Ewen, director of child care and early education at the Center for Law and Social Policy (CLASP), a nonprofit advocacy organization in Washington, D.C., offers a list of changes that could make CCDBG an even more powerful program for both providers and children: a new emphasis on provider contracts to guarantee a steady income stream; community-based centers for infant and toddler care that focus on providing a range of social and economic support services; and, of course, much more money.

Child care is substantially underwritten by public dollars. One of the best documented research findings is that high quality early childhood education is one of the best investments a society can make. But the professionalism, pay, and training of early childhood workers is an essential ingredient for success. Government has the power to make a tremendous difference in the lives of child care workers and the young children under their care -- but only if the administration shows more leadership.

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