The Business of Child Care

By now, you’ve probably seen dozens, if not hundreds, of headlines about the child care crisis in America. Families are struggling to find quality, affordable care options for their children. It’s a problem that’s trapping families, employers, and child care providers in a troubling equation: parents need to work + employers need a dependable workforce + quality child care is scarce = children’s educational, emotional, & social needs aren’t met.

Quitting Isn’t An Option

In Tennessee, the average cost of child care for an infant is $10,800 a year. That’s 20% of the median household income for a family in Chattanooga-Hamilton County. For a single parent earning minimum wage, it’s 72% of the parent’s income. In households with two parents, having one parent quit the workforce and stay at home with the kids is not an option for most families. In fact, in a 2022 Tennesseans for Quality Early Education (TQEE) survey, 77% of Hamilton County families said they cannot afford not to work.

How Employers Can Help

As we saw with stay-at-home orders during the COVID-19 pandemic, companies and businesses can be flexible. That adaptability should also be afforded to employees who need flexibility when it comes to the basic needs of caring for their children. In The Business Case for Child Care Report by Moms First, 88% of women with children ages 0-5 who were looking for a job said that having flexibility, predictable hours, or child care would make them more likely to choose an employer.

Companies who support the needs of employees with families benefit, too. They help build a continuously thriving economy that enjoys a two-generation benefit of child care:

  • Employees have a better work-home balance, making them happier and more productive
  • Happy employees are loyal employees
  • Strong workforce = improved economy
  • Children age six and under who are in a supported environment develop skills that set them up for success in Kindergarten
  • Children who are successful in early learning and Kindergarten are more likely to be proficient in reading and math at the third-grade level
  • Those children will graduate high school and are likely to go on to college or another post-secondary path, where they will learn skills to help them attain lucrative jobs 

There are other ways companies can support working families as well: 

  • Poll your employees to learn their family care needs
  • Enable a Dependent Care FSA 
  • Provide a child care stipend
  • Offer back-up care, such as babysitters or nannies, if employees experience an unexpected child care closure (websites such as Weecare)

Child Care Teachers Must Be Compensated

The child care industry in Hamilton County is also in a bind. Providers are facing a massive staffing shortage. Child care teachers are overworked and underpaid. Most don’t receive paid time off. If their own children are sick, teachers often don’t have the option of staying home to care for them. That’s why we’re launching the Child Care Dedicated Substitute Teacher Pilot. Ten agencies will be selected to receive a dedicated substitute teacher. The substitute can fill in when a teacher needs to take a wellness or professional development day. On days when centers are fully staffed, substitutes will assist teachers and reduce ratios. 

Another issue facing the child care industry is that the business model simply doesn’t work for many families. A study by the Urban Institute found 41.4% of children under age six in

Tennessee have parents who work nontraditional hours (weekends, early mornings, and evenings). However,  most child care programs operate Monday through Friday and close their doors at 5:30 or 6 p.m. If teachers were adequately compensated, providers could hire more staff and extend their operating hours.

Chattanooga 2.0 will soon release a Funding Stream Analysis that summarizes what it would take to stabilize the local child care system and the innovative ways to get there.

Bottom Line

The lack of adequate child care options affects families and communities in a massive way. In fact, the TQEE study revealed a staggering dollar amount: $94.4M. That’s the amount of lost earnings and revenues to parents, businesses, and taxpayers in Hamilton County in 2022 due to insufficient child care.

Of course, the ones who suffer the most are the children. We know early child care and learning programs are more important than ever if we want our children to thrive. We also know parents need, and should have, a supportive work environment so they don’t have to make difficult decisions about missing work to care for their children or clocking in so they can put food on the table. Families are telling us what they need. It’s up to all of us, businesses, advocates, government leaders, and stakeholders, to ensure they get it.

 

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Jennifer Andrews is Chattanooga 2.0’s Director of Early Childhood Strategies. She is a Bright Start TN fellow and helps drive the work of the Early Matters 2025 Early Childhood Action Plan. Learn more about the plan at www.chatt2.org/brightstart 

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