A new set of recommendations was released by the Washington State Child Care Collaborative Task Force, designed to address high costs and a lack of child care capacity.
Washington State’s child care system is experiencing high worker turnover and costs to families. The report recommends that the Legislature design new financing models to subsidize child care. Several previous recommendations from the task force were included in the Fair Start for Kids Act (SB 5237), which was approved by the Legislature last session.
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The need is well documented. The legislative report produced by the task force states that full-time child care for an infant and a child in preschool can cost a two-parent family up to 35% of their annual income. A single parent trying to get child care can face costs up to 150% of their income.
These high costs are largely due to a lack of child care capacity. The COVID-19 pandemic has exacerbated this trend. Before the pandemic, the task force estimated there were roughly 737,000 children under the age of 12 that needed child care in Washington State, but only around 187,500 licensed spaces. On top of this, last year it was estimated that a quarter of child care facilities statewide had closed by Aug. 2020.
Amy Anderson, director of government affairs for the Association of Washington Business and co-chair of the task force, said the pandemic decreased child care slots in the state as restrictions forced providers to accommodate fewer children, and families pulled their children out.
Recruiting and retaining child care workers is a significant issue as well. In a July 2021 survey from the National Association for the Education of Young Children, four out of five providers reported staffing shortages and 78% survey respondents said wages were their biggest challenge when trying to recruit employees.
Often the fees charged to families don’t cover the full cost of care. To survive, child care providers often keep wages low, and the average child care worker in Washington makes less than $15 an hour. This disproportionately impacts women — who make up 94% of the child care workforce in the U.S. — and people of color who account for 50% of child care workers in Washington State, the report states.
It’s a problem that Sen. Claire Wilson (30th-D), who sponsored SB 5237, has been trying to address.
“Clearly, we have got to lift up what this industry does, and what the individuals in this industry do, many [workers] themselves are eligible for assistance, which should never be,” Wilson said.
However, Rep. Bob McCaslin (4th-R), who served on the task force, said in an email statement that he views the DCYF as responsible for putting thousands of child care centers out of business.
“I think giving them more power and money this last session was the wrong thing to do,” McCaslin said of SB 5237.
To address low wages, the task force is recommending two major policy goals: increase the number of child care slots that are funded by Working Connections Child Care (WCCC) subsidies, and increase the subsidy rates and payments to cover the full cost associated with providing child care. Currently, less than one-third of child care spaces are subsidized.
The child care industry wasn’t developed in the way traditional businesses were, Wilson said. In Washington State, lawmakers are trying to figure out how to improve wages for child care workers, while avoiding cost increases to families.
“We cannot run a child care industry on the backs, if you will, of families who can afford care,” Wilson said. “But I dare say most families with resource right now can’t afford or find care.”
One way to offset this is by raising subsidy rates which the state pays to child care providers.
This July, the Department of Children, Youth, and Families (DCYF) increased WCCC subsidies to providers from 65% to 85% of what child care costs on the private market, in line with the Fair Start for Kids Act. Child care providers rely on a mix of full-rate and subsidized families to keep the doors open, and raising the subsidy rate could encourage more affordable slots.
“From the business perspective of providing child care, you’re now being reimbursed 85 cents on the dollar,” Anderson said. “… That does allow you to open up more slots for families that are eligible.”
DCYF also provided more than $60 million in grants to child care providers last year to help stabilize the industry, and is following that up with another $50 million this year. Further, it will eventually distribute nearly $400 million in grants from the federal American Rescue Plan Act.
The Legislature included $30 million in the 2021-23 operating budget for health care insurance premium assistance for child care employees.
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