Mainers have a long tradition of working together to solve tough problems. Right now, we face a significant, but solvable, challenge with child care. Before this public health crisis, the vast majority of families with children under age six had all parents in the workforce. So, while working, they relied on early care and education to support their children’s healthy development with safe, stable nurturing relationships and experiences.
Yet as the pandemic spread across our country and state, businesses closed and stay at home orders went into effect. The impact on the child care community was significant.
In February, Maine had 1,728 open child care programs; as of May 1st that number was down to 907 and on July 1st there were 1,349 open.
For many parents to get back to work, they will need quality child care; even while providers struggle financially to reopen or remain open. Unless we act now, many child care programs parents and children rely on may not be there. Without intervention, it is likely, not just possible, that there will be no child care in many communities across our state. IT’S MORE THAN CHILD CARE – EARLY CHILDHOOD DEVELOPMENT
The current health crisis makes clear how important it is to look to science and research to guide us as we make decisions about our health and well-being. Decades of research in developmental science has shown that the early years are the time when the brain is literally building itself from the ground up, in much the way a house is constructed. When children have positive experiences and relationships—the building blocks of the developing brain—children get off to a good start, establishing a strong foundation for future development. HOW THE CHILD CARE BUSINESS WORKS
Early childhood programs are made up of a mix of public and private entities. They range from larger centers to small programs that operate in homes, and may be structured as sole proprietors, small businesses, or nonprofit organizations. What these different child care models have in common is that they are financed by their customers. According to a recent national survey
of child care providers, 71% were for-profit and 29% were non-profit.
Most child care programs are financed by families who pay for their children to attend. We’ll refer to this as tuition. Tuition pays for staff, rent, and utilities. While states give child care providers subsidies for low-income children, the subsidies generally only amount to 75% of the market rate of a child's tuition.
And these subsidy payments account for only a small percentage of the total number of children served by early educators.
For a program to stay financially afloat, it must be fully enrolled and collecting full tuition from all enrolled families. In fact, there is research
indicating that for programs to meet high-quality standards, they need to serve large numbers of preschool or school age children just to break even (given the higher cost of infant care). And as was noted in a recent article from the Federal Reserve Bank of Minneapolis
, child care is an industry with thin margins that was already struggling before the COVID-19 pandemic. THE COST OF CHILD CARE
The cost of child care, which for an infant is similar in annual cost to sending a student to the University of Maine, is extremely challenging for parents to afford during a time in their lives when they are just beginning their careers and may still be paying student loans. A national survey of over 800 parents by the Bipartisan Policy Center
last fall found that 42% of parents had accrued additional credit card debt in order to pay for child care.
But the high cost of child care does not equate to profitable businesses, well-paid staff, or high-quality experiences for children. According to the Bureau of Labor Statistics
, the average hourly wage for child care workers in Maine is $13.51, which equates to $28,100/year. This causes high turnover rates, which is difficult for child care directors and parents, but in particular for young children, who need consistent relationships with caregivers
during the early brain building years.
In addition to low wages, early care educators and staff rarely receive benefits, like health care and paid time off, in stark contrast to their public school counterparts. The 2018 Maine Child Care Market Rate Study
found that only 43% of child care centers and around 3% of family child care homes offered health benefits to their employees. Paid sick leave was provided by 80% of centers and 49% of family child care homes. The Special Problem of Infant Care
A fundamental flaw in this market-based system is with infants, as they are much more expensive to care for than four-year old children. During infancy, healthy development is facilitated by lots of one-on-one interaction, and so infant care requires low adult-to-child ratios. To provide infant care, programs need more staff, which increases costs. Older children don’t require constant one-on-one interaction, and can learn and play in groups with peers, so adult-to-child ratios are much less restrictive. Programs rely on four-year-old enrollments to remain financially viable, as it is less costly care to provide. WHAT’S HAPPENED TO EARLY CARE AND EDUCATION IN MAINE SINCE COVID-19?
Head Start: As states have implemented stay at home policies, the federal and state funding for Head Start has been maintained. The Office of Head Start directed local programs to continue to pay wages and provide benefits for staff unable to report to work during center closures that were necessary to address COVID-19. Public Preschool:
As public schools across the state closed, public preschool programs also closed. Teachers and staff continued to work remotely with children and families and per and Executive Order from the Governor
, hourly employees continued to be paid and receiving benefits.
Contrast the above with the experience of the 1,700 licensed child care entities in Maine, which were deemed "essential" businesses that were encouraged to remain open to ensure other essential workers had access to child care. We should be questioning why we have a private, independent market for child care in some communities, while others benefit from a publicly supported model with access to public preschool. Child care: Due to unemployment, many parents could no longer pay tuition. Many other parents who were able to work from home, made the decision to keep their children home because of health and safety concerns. The result has been that without tuition from their full enrollment, child care programs cannot remain viable. This resulted in 985 of the 1,700 programs temporarily closing at some point during the crisis. As child care providers have reopened, they face new child care licensing guidance that has further increased costs, from increased staff costs to facilitate lower adult to child ratios and the implementation of health and safety protocols. 
Stabilize existing child care
First, we need public investment to stabilize existing child care providers and ensure they do not go out of business. We have heard from too many providers that they cannot sustain ongoing financial losses. They have told us they will not survive if a second wave of the virus requires another complete closure. They need significant and immediate financial assistance. State Investment
As part of the federal CARES Act, the State of Maine received $11 million dollars from the Child Care Development Block Grant to support families of emergency workers and allocate funding to child care providers. Maine’s Department of Health & Human Services provided across the board funding and grant opportunities during the months of June and July. We heard from many providers that while they greatly appreciated the funding, it did not make a dent in the monthly losses they are experiencing. We believe the Governor must immediately allocate a minimum of $20 million
from the remaining CARES Act funding the state received, to stabilize the child care industry, and ensure they can continue the essential service they provide for working parents and young children.
In February, Maine had 1,728 open child care programs; as of May 1st that number was down to 907 and on July 1st there were 1,349 open.
For many parents to get back to work, they will need quality child care; even while providers struggle financially to reopen or remain open. Unless we act now, many child care programs parents and children rely on may not be there. Without intervention, it is likely, not just possible, that there will be no child care in many communities across our state. IT’S MORE THAN CHILD CARE – EARLY CHILDHOOD DEVELOPMENT
The current health crisis makes clear how important it is to look to science and research to guide us as we make decisions about our health and well-being. Decades of research in developmental science has shown that the early years are the time when the brain is literally building itself from the ground up, in much the way a house is constructed. When children have positive experiences and relationships—the building blocks of the developing brain—children get off to a good start, establishing a strong foundation for future development. HOW THE CHILD CARE BUSINESS WORKS
Early childhood programs are made up of a mix of public and private entities. They range from larger centers to small programs that operate in homes, and may be structured as sole proprietors, small businesses, or nonprofit organizations. What these different child care models have in common is that they are financed by their customers. According to a recent national survey
of child care providers, 71% were for-profit and 29% were non-profit.
Most child care programs are financed by families who pay for their children to attend. We’ll refer to this as tuition. Tuition pays for staff, rent, and utilities. While states give child care providers subsidies for low-income children, the subsidies generally only amount to 75% of the market rate of a child's tuition.
And these subsidy payments account for only a small percentage of the total number of children served by early educators.
For a program to stay financially afloat, it must be fully enrolled and collecting full tuition from all enrolled families. In fact, there is research
indicating that for programs to meet high-quality standards, they need to serve large numbers of preschool or school age children just to break even (given the higher cost of infant care). And as was noted in a recent article from the Federal Reserve Bank of Minneapolis
, child care is an industry with thin margins that was already struggling before the COVID-19 pandemic. THE COST OF CHILD CARE
The cost of child care, which for an infant is similar in annual cost to sending a student to the University of Maine, is extremely challenging for parents to afford during a time in their lives when they are just beginning their careers and may still be paying student loans. A national survey of over 800 parents by the Bipartisan Policy Center
last fall found that 42% of parents had accrued additional credit card debt in order to pay for child care.
But the high cost of child care does not equate to profitable businesses, well-paid staff, or high-quality experiences for children. According to the Bureau of Labor Statistics
, the average hourly wage for child care workers in Maine is $13.51, which equates to $28,100/year. This causes high turnover rates, which is difficult for child care directors and parents, but in particular for young children, who need consistent relationships with caregivers
during the early brain building years.In addition to low wages, early care educators and staff rarely receive benefits, like health care and paid time off, in stark contrast to their public school counterparts. The 2018 Maine Child Care Market Rate Study
found that only 43% of child care centers and around 3% of family child care homes offered health benefits to their employees. Paid sick leave was provided by 80% of centers and 49% of family child care homes. The Special Problem of Infant Care
A fundamental flaw in this market-based system is with infants, as they are much more expensive to care for than four-year old children. During infancy, healthy development is facilitated by lots of one-on-one interaction, and so infant care requires low adult-to-child ratios. To provide infant care, programs need more staff, which increases costs. Older children don’t require constant one-on-one interaction, and can learn and play in groups with peers, so adult-to-child ratios are much less restrictive. Programs rely on four-year-old enrollments to remain financially viable, as it is less costly care to provide. WHAT’S HAPPENED TO EARLY CARE AND EDUCATION IN MAINE SINCE COVID-19?
Head Start: As states have implemented stay at home policies, the federal and state funding for Head Start has been maintained. The Office of Head Start directed local programs to continue to pay wages and provide benefits for staff unable to report to work during center closures that were necessary to address COVID-19. Public Preschool:
As public schools across the state closed, public preschool programs also closed. Teachers and staff continued to work remotely with children and families and per and Executive Order from the Governor
, hourly employees continued to be paid and receiving benefits.
Contrast the above with the experience of the 1,700 licensed child care entities in Maine, which were deemed "essential" businesses that were encouraged to remain open to ensure other essential workers had access to child care. We should be questioning why we have a private, independent market for child care in some communities, while others benefit from a publicly supported model with access to public preschool. Child care: Due to unemployment, many parents could no longer pay tuition. Many other parents who were able to work from home, made the decision to keep their children home because of health and safety concerns. The result has been that without tuition from their full enrollment, child care programs cannot remain viable. This resulted in 985 of the 1,700 programs temporarily closing at some point during the crisis. As child care providers have reopened, they face new child care licensing guidance that has further increased costs, from increased staff costs to facilitate lower adult to child ratios and the implementation of health and safety protocols. Lower Revenue from Tuition Payments + Higher Costs = Disaster for Child Care
WHAT NEEDS TO HAPPEN NOW? We must provide experiences in early care and education that build sturdy foundations for children's development, support working parents, pay educators a livable wage and keep early education viable. Stabilize existing child care
First, we need public investment to stabilize existing child care providers and ensure they do not go out of business. We have heard from too many providers that they cannot sustain ongoing financial losses. They have told us they will not survive if a second wave of the virus requires another complete closure. They need significant and immediate financial assistance. State Investment
As part of the federal CARES Act, the State of Maine received $11 million dollars from the Child Care Development Block Grant to support families of emergency workers and allocate funding to child care providers. Maine’s Department of Health & Human Services provided across the board funding and grant opportunities during the months of June and July. We heard from many providers that while they greatly appreciated the funding, it did not make a dent in the monthly losses they are experiencing. We believe the Governor must immediately allocate a minimum of $20 million
from the remaining CARES Act funding the state received, to stabilize the child care industry, and ensure they can continue the essential service they provide for working parents and young children.