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Report: Child care remains roadblock for Delaware workforce

Katie Tabeling

Teacher Alyson Melson cleans toys at Kidz Ink IV in Bear in 2020. Child care in Delaware is struggling to attract employees, which in turn limits how many classrooms can remain open.| DBT PHOTO BY JACOB OWENS

WILMINGTON — As Delaware workers continue to return and leave the workforce, the Delaware State Chamber of Commerce held a panel on Tuesday from business, policy and education leaders about how child care plays a critical role in the economy.

Last month, the Federal Reserve Bank of Philadelphia and the Rodel Foundation issued a report that shows that half of child care centers in the state are turning families away due to staffing shortages and underinvestments. But it’s not just a matter of increasing the supply to meet the demand, Rodel Senior Vice President Madeleine Bayard said.

“They are going to be hiring from the same workforce that some parents [who own businesses] are trying to hire from,” Bayard said. “Just building more facilities is not going to solve the problem of what needs to be invested in child care. We need to think broader and more creatively.”

The Fed had partnered with the Delaware Department of Education, Rodel and the DSCC to research child care access in the First State as part of its Economic Growth and Mobility Project. Its findings show that there is a shortage in licensed care, namely that there are roughly 18,780 more children than all available slots in facilities in the state. Capacity in Kent and Sussex counties is one-fifth the amount available in New Castle County.

With most child care centers facing a staffing shortage, about 73% point to the low wages as a reason why they cannot retain staff or attract new employees. The pipeline of keeping college-educated early childhood educators in Delaware is also declining.

“We’re starting to see child care centers closing their rooms because of a lack of qualified staff in the field itself,” said Caitlin Gleason, the associate secretary for early childhood support in the state Department of Education. “We recognize wages are very low … we are grappling with policies that would incentivize professionals in our field.”

On the other side of the equation, families in Delaware are spending about 20% of the median household income. About 71% of children under the age of 5 have both parents in the workforce in the state, but 2.3 million women nationwide have left the workforce since the beginning of the pandemic.

“As you can imagine, families are weighing the decision between returning to the labor market and the increasing costs of child care — and they’re finding it may be less expensive for someone to not return to the market,” said Ashley Putnam, the director of the Fed’s Economic Growth and Mobility Project. “That’s resulting in critical issues for businesses because they’re trying to find workers in recovery.”

The state offers purchase of care, or a state subsidy for child care that assists low-income parents who are working or in school. Families who earn 185% of the federal poverty limit qualify – about $4,087 a month in gross income for a family of four – but there is no guarantee that a child will be enrolled in the program. With more kids than there are spots in programs, waitlists are long. Some child care facilities offer a small selection of slots for purchase of care, while others offer more.

Karen Hartz, the director of early childhood services at the Latin American Community Center, pointed out that with wage adjustments and minimum wage increasing, many families are priced out of purchase of care. But still, those families may not be able to afford private tuition rates.

“The problem is that the point where families are cut off isn’t necessarily the point where families can afford to pay the full rate of child care tuition. To fix the system, we need to increase the number of families who are eligible to get that support and to increase the [purchase of care] rate so that facilities can pay a living wage to staff,” Hartz said. “No one wants to go into a career when you’re making $10 an hour with an associate or bachelor’s degree.”

In Delaware, there must be at least one staff member for every four children under 12 months old. The ratio goes up to six children per staff member, if the children are between ages 1 and 2. About 1,000 fewer infants are being served in child care centers in Delaware because of the economics of the purchase of care and the struggle in hiring more staff to care for them.

“It’s much harder to care for 12 infants in a room, because the staff-to-child ratio is much lower than that, it’s less profitable for a business to have an infant room versus opening a pre-K room,” Gleason said. “That ratio makes a huge difference in how these businesses think of the bottom line.”

Ben Gray, the regional manager for hotel operator EOS Hospitality in Rehoboth and Bethany Beach, has been seeing the child care crisis play out in real time. He estimated that between 10% and 20% of his 180 employees don’t show up to work because they don’t have child care. A supervisor he recently hired — and just moved her family to the First State — can’t get her children in a local daycare until 2024.

“One of the top questions we’ve been getting from candidates in interviews was about providing child care, and in my entire 10-year career, that question has never been asked to me,” Gray said. “People are asking if they can bring their kids, and they can’t. I’ve seen colleagues have to shut down inventory because they didn’t have enough housekeepers. One center just started closing [an hour earlier,] and that’s huge to people working in the hospitality sector.”

Looking to the future, state officials are considering how to expand the early childhood assistance program in school districts, with additional funding to target 3- and 4-year-olds, Gleason said.

State officials are also reportedly exploring workforce cohort models for higher education, as well as other partnerships. The first may be at Delaware State University, where Gov. John Carney has allocated $10.6 million in American Rescue Plan Act (ARPA) funds to build a new Early Childhood Innovation Center on campus.

“We are thinking about scholarships, and our partners will be rethinking the way we offer credentials for the child care professionals in this state,” she said. “We’re definitely looking at more of the innovative recruitment tactics.”

Bayard encouraged business leaders to advocate for child care with state officials and elected leaders, even taking time to testify on potential bills or reaching out to advocates in county chambers or economic development offices.

She also noted that other states started to explore the idea of child care providers receiving tax credits to open up additional slots for purchase of care families. A similar tax credit could also be offered for child care providers.

“There’s a state [pay] schedule where if you work for years or get another degree, you could earn a higher wage. But in child care, if you move up a credential, workers are getting something between 8% and 12% refundable tax credit,” Bayard said. “That’s been a way for some states to invest in folks.”

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