If Daycare Is So Expensive Why Are Provider's Having to Struggle?

[Unregistered]

My fees go up, but it doesn't always translate into a "raise" for me personally. Many years my increase barely covers or doesn't even cover the higher food prices, water, electricity, gas, etc. not to mention that I have to buy my own health insurance and the increases on that are astronomical. There is no way to raise my fees enough to cover those increases.
My net income has gone up over the years, but not at the level that other things have or at the stated rates of inflation.

[Leigh]

Holy cow! She must have found a weird pocket of expensive providers..... I've lived in MN my whole life and there are many counties in the state today that don't charge that much today.

When I first got licensed (20+ yrs ago) the standard hourly rate for licensed providers was about .85 to $1.00 an hour. The state assistance program reimbursed approximately .60 an hour.

Today, the state assistance program reimburses something like $2.37 an hour.

Min. wage around here has stayed around $5.25 to $5.75 until 2011 when the first increase in over a decade happened and they raised the min wage to $6.15

We are expected to be at $9.50 by the first of August.
Daycare costs on a similar scale have NOT increased at all.

She was in Fergus Falls at the time.

[Leigh]

We've had FIVE providers that I know of close down in the last 6 weeks. Because they couldn't make a living, but were afraid to raise their rates to a level that would allow them to support themselves. They all felt that their clients would flee. I've had calls from some of those parents who freak out when they hear my rate: "For ONE child?!". Yup. I have straight out told more than one of them that their provider shut down because she couldn't support herself, and that I am in this for the long haul. I MUST charge a rate that allows me to support my family, or I must find a different job that will, just like their providers had to.

[Play Care]

I am so glad this was finally addressed! All the "daycare is so expensive!" posts were driving me nuts. Especially when the cost of day care doesn't mean the WAGE is why the cost is so high.

That said, I don't think parents work because they want STUFF, mostly. All of my clients have at least a BA, but most have advanced degrees. Student loan debt is is a huge factor into why both parents work, at least here.
But truthfully, I would be unwilling to not work if it meant we'd have to scale back. I grew up with a SAHM. We were poor and it ****ed. I want my kids to have music lessons and dance camp and braces and vacations. I also don't want to be completely screwed if something were to happen to DH.

Like someone once said "the good old days weren't always so good, and tomorrow's not as bad as it seems" ::

[mommyneedsadayoff]

http://www.acf.hhs.gov/programs/occ/...ment-fund-ccdf

Child care subsidies help low-income families with children under age 13 pay for child care so that parents can work or participate in training or education activities. Parents typically receive subsidies in the form of vouchers that they can use with a provider of their choice–whether a relative, neighbor, child care center, or after-school program. States have a great deal of flexibility to establish child care subsidy policies to meet their needs. Thus, national data on the characteristics of families served masks a large degree of variation across individual States.

Number served. Approximately 1.41 million children and 852,900 families per month received child care assistance in FY 2014.

Income level. Of the families served in FY 2014, 51 percent were below the Federal Poverty Level (FPL), or $19,790 for a family of three. Twenty-seven percent had incomes between 100 and 150 percent of the FPL, and 11 percent had incomes above 150 percent of FPL. The remaining families had invalid or unreported data (5%) or a child as head of household (5%).

TANF status. Nationally, the average monthly percent of families reporting income from TANF was approximately 14 percent in FY 2014. Most States give families currently receiving, at-risk of receiving, or transitioning off TANF, first priority for child care assistance.

Ages. Subsidies help pay for care for infants and toddlers, preschoolers, as well as school-aged children. For children receiving CCDF subsidies in FY 2014:
34 percent were school-aged (6 years & older)
11 percent were kindergarten-aged (age 5 years)
28 percent were preschoolers (3 & 4 years old)
28 percent were infants and toddlers (younger than 3 years old)

Settings – Type of Care. Because the subsidy program emphasizes parental choice, children are cared for in a wide variety of settings. Nationally, in FY 2014:
72 percent of children receiving subsidies were cared for in a child care center
18 percent were in family child care homes
3 percent were in the child’s own home
6 percent were in a group home
Less than 1 percent had invalid data or did not report any data

Settings – Regulation Status. Nationally, in FY 2014:
86 percent of children receiving subsidies were cared for in regulated settings,
13 percent were settings legally operating without regulation. Of those,
62 percent were served by relatives in child, family, and group homes; and
38 percent were served by non-relatives in child, family, and group homes

Family Copayments. Of those families with reported income in FY 2014, approximately 77 percent paid a copayment. Excluding families with no copayments, child care copayments averaged 7 percent of family income. More than one-third of all States and Territories (21 in FY 2014) served families where the average assessed family copayment was five percent or less of family income.

Reasons for Care. In FY 2014, 92 percent of families cited either employment or education and training as the reason for needing child care. Another 7 percent cited protective services as reasons for care.

Providers Receiving CCDF Funds. Nationally, in FY 2014, 369,606 child care providers served children receiving CCDF subsidies:
23 percent (86,574) of providers receiving CCDF funds were child care centers; and
77 percent (283,032) of providers receiving CCDF funds were home-based providers.
For 17 of the 56 State and Territory grantees, between 85 and 100 percent of providers were regulated; for another 22, between 50 and 84.9 percent of their providers were regulated. At the opposite end of the spectrum, only 5 grantees (3 states and 2 territories) reported that less than 25 percent of their providers were regulated.


Note: Percentages may not add up to 100% due to rounding.

Thank you for the stats! Looks like most people using childcare assistance go to centers. I would imagine they would receive the most federal or state funding if mney was poured into childcare. They also pay the lowest wages and have very high turnover. Hmmm:confused:

[Thriftylady]

Thank you for the stats! Looks like most people using childcare assistance go to centers. I would imagine they would receive the most federal or state funding if mney was poured into childcare. They also pay the lowest wages and have very high turnover. Hmmm:confused:

Well I know in my county, we have no homes that take state subsidy because the gal that does licensing wants us to follow center regulations. Not the reg, but she is in charge so she does what she does. I wonder if that issue is common? Also I know that here and also when I was in KS, the state pays a higher rate to centers than they do to daycare homes. I am not sure why that is, because I am not convinced the care is any better many times. From what I know of some of the large national centers it really isn't.

[mommyneedsadayoff]

I am so glad this was finally addressed! All the "daycare is so expensive!" posts were driving me nuts. Especially when the cost of day care doesn't mean the WAGE is why the cost is so high.

That said, I don't think parents work because they want STUFF, mostly. All of my clients have at least a BA, but most have advanced degrees. Student loan debt is is a huge factor into why both parents work, at least here.
But truthfully, I would be unwilling to not work if it meant we'd have to scale back. I grew up with a SAHM. We were poor and it ****ed. I want my kids to have music lessons and dance camp and braces and vacations. I also don't want to be completely screwed if something were to happen to DH.

Like someone once said "the good old days weren't always so good, and tomorrow's not as bad as it seems" ::

Just curious and I hope I don't come off offensive, but it sounds like you and your spouse can offer those dance lessons, vacations, ect without being away from your children 50+hours a week.(?) If it came down to hardly seeing your kids just so they can go to music lessons and and go on vacations, would you still do it? My mom was a SAHM and a working mom (daycare center owner), so I was always with her and never had any lessons other than sports camps in the summer and we were definitely not rich, but I just remember that time with her and it is so special to me. I SO don't mean to belittle what you are saying at all, so I hope you know I am only coming from curiosity! I think I may be jaded from dealing with parents who will take any chance they get to be away from their child, but to me, when I reference the good ole days, it has more to do with having kids so you can be a PARENT. Not pay someone else to do it just so you can drive a newer car or use it as an excuse for why you are failing at life. KWIM? Being a parent is not a crutch to use when you need it. It is a privilege! (Again, not you Playcare, and I totally get what you are saying! Hope I didn't offend you!)

[Blackcat31]

Thank you for the stats! Looks like most people using childcare assistance go to centers. I would imagine they would receive the most federal or state funding if mney was poured into childcare. They also pay the lowest wages and have very high turnover. Hmmm:confused:

I noticed that too...

In my state centers do get a higher reimbursement rate for the state assistance program but we also have two different sets of regulations too... we call family care Rule 2 and center care Rule 3. Rule 3 regulations are much stricter.

I also think that most centers charge more per hour/per day simply because the overhead and/or cost of operating is higher.

The centers in my area don't necessarily get any more money poured into them from the government or other area sources so that's one thing that is nice. We (FCC providers) have the same opportunities to apply for grants and funding and our QRIS program rates centers in pretty much the same way they do in-home providers.

[spud912]

Great article, BC!

[Play Care]

Just curious and I hope I don't come off offensive, but it sounds like you and your spouse can offer those dance lessons, vacations, ect without being away from your children 50+hours a week.(?) If it came down to hardly seeing your kids just so they can go to music lessons and and go on vacations, would you still do it? My mom was a SAHM and a working mom (daycare center owner), so I was always with her and never had any lessons other than sports camps in the summer and we were definitely not rich, but I just remember that time with her and it is so special to me. I SO don't mean to belittle what you are saying at all, so I hope you know I am only coming from curiosity! I think I may be jaded from dealing with parents who will take any chance they get to be away from their child, but to me, when I reference the good ole days, it has more to do with having kids so you can be a PARENT. Not pay someone else to do it just so you can drive a newer car or use it as an excuse for why you are failing at life. KWIM? Being a parent is not a crutch to use when you need it. It is a privilege! (Again, not you Playcare, and I totally get what you are saying! Hope I didn't offend you!)

Not at all!

While we are able to do so, it's sheer good luck. I make a decent salary from day care, and have mostly teacher kids so more time off and shorter days than the average provider. I've said from the get go that if I couldn't make ends meet doing day care, then it would be time to move on. This might mean getting a job where I was away 50+ hours a week though I would try hard to avoid that. But for moms who have years of training, and thousands in student loans, they may not have the choice to leave a good paying job for pt or consulting, etc etc

But I definitely think the clientele you have forms your opinion. Mine are the kind who leave work and come get their kids, who keep kids home on days off, who try to minimize day care time. I think my shorter hours discourage the day care "dumpers."

Growing up, my mom was a SAHM of the "old school" train of thought. The "go play" type of SAHM. So while I do have some memories of fun times, mostly I remember a lot of boredom and being left to our own devices. While some bloggers suggest this was a "magical" 80's childhood, I disagree.
My mom will say that we did a lot, if it was free. but that depended on if she was in the mood, had the money for gas, etc etc When my sisters needed braces, we didn't have the money. Or the phone would get shut off have to contribute from our piggy banks.
Forget about dance or piano, etc.
I also recall when I was a tween/teen a lot of my parents friends started divorcing. Women who had been SAHM's were suddenly left penniless and unable to get decent jobs.

I don't think kids should have to sacrifice for mom the be able to stay home.

[Cat Herder]

Well I know in my county, we have no homes that take state subsidy because the gal that does licensing wants us to follow center regulations. Not the reg, but she is in charge so she does what she does. I wonder if that issue is common?

I have the same problem.

The State keeps sending "satisfaction surveys" with yes or no options, but words the questions in such a way as to keep you from telling them the problem.

I just delete them now. They have taken up enough of my free time.

[Thriftylady]

I have the same problem.

The State keeps sending "satisfaction surveys" with yes or no options, but words the questions in such a way as to keep you from telling them the problem.

I just delete them now. They have taken up enough of my free time.

Hmm sounds like they are required to do this, but don't really want to hear there are any problems.

[Unregistered]

Very well written!!!!

Awesome response!!!

I am glad someone finally put it in an article. Gets tiring seeing all the "daycare is too expensive" articles. I do, however, disagree with the summation, that states should pour more money into childcare. I don't think that will work.

The article said that regulations are there to protect children, but can be costly tot he daycare. But are they all really there to protect kids? If so, wouldn't they be the same state to state? In some states, you can't even watch one child not related to you without asking the state for a license, but in others, you can have 6+. I am not an advocate for more government, so take this with a grain of salt, but I think the market could adjust itself with less or at least more consistent regulations. For example, I am most experienced with infant care. In my state, I can only watch 4 kids under 24 months. If I was able to watch 5, which is my comfort zone, I would make almost $10k more per year. (Five is the most I can carry if there were a fire...amazing how many kids you can tuck under an arm if needed). It literally is the difference between qualifying for assistance and not qualifying when it comes to my income. Of course, that is just a small example, but I feel like if they put more importance on our jobs, parents would feed off that and not just the high cost of daycare. I am not sure how state funds get doled out, but I just look at schools. Teachers are underpaid, schools have been given billions in federal/state money, and teachers are still underpaid and quality of education has not improved. :confused: I just see the same happening for daycares. The money will be sparingly passed down, but a large part of it would probably be wasted and go to the salaries of the people they hire to oversee it.

[Blackcat31]

Very interesting info!

http://www.ed.gov/news/press-releases/fact-sheet-troubling-pay-gap-early-childhood-teachers

[Pestle]

It's so simple. I've been a parent who pays for care and now a care provider. This is a stupid question to ask.

Dear parents,
How much do you want to pay for day care per month?
How much money do you want to make per month?
Now imagine that you left your job and took mine.
And quit complaining.