Building an Economy that Works for Everyone

Fixing the childcare market failure

With both parents working outside the home in most households, affordable, high-quality childcare is critical to promoting a climate that is healthy for our businesses and families.

But according to a recent KING 5 TV report, more parents than ever in King County are desperately searching for childcare and getting nowhere:

The problem: “more children and fewer facilities.”

More kids and fewer facilities aren’t the problem. They are outward indicators – symptoms – of a childcare market that isn’t working properly, for either parents or their childcare providers.

After all, if the market were functioning, increased demand (which has been building for years) would tend to improve pay and working conditions for workers, as employers competed to recruit additional staff. Instead, watching cars pays better than watching kids, and the job is still one of the hardest you’ll every try.

Alternatively, pay and working conditions would stay low but childcare center owners, flush with cash, would be opening new childcare centers as fast as they could. But that’s not happening either, as evidenced by the KING 5 report.

So, what’s up with the high fees and lack of availability?

According to Nina Auerbach of Child Care Resources (who is featured in the story):

…the state’s effort to improve the quality of childcare with stricter regulations has made it harder and more expensive to run a licensed facility, especially for infant care. A decent, licensed facility can cost parents well over a thousand dollars a month.

Think about that cost vs. quality setup for a moment.

No parent wants low-quality care for their children, even if it’s cheap — and especially if it’s expensive. Likewise, a completely unregulated childcare industry would seem to be asking for trouble.

These are infants and young children we’re talking about here, so it seems likely there are some liability, insurance and other costs at play here, which merit more exploration in another post.

Regardless, high-quality is really the bottom line for parents, and that costs money – too much money, in fact, for parents to do it on their own. So the logical question is: How are we going to help parents afford it, or, how can we lower the costs of childcare without decreasing quality?

A number of European countries have answered the first half of the question by subsidizing child care to the point where all families can afford it. Paid family leave is also part of that solution. The U.S. is now one of only five countries out of 173 – along with Lesotho, Liberia, Swaziland, and Papua New Guinea – that does not guarantee some form of paid maternity leave.

Closer to home, the collective bargaining agreement floated in the Washington legislature last year, if passed, would allow all childcare center employees (including directors) to vote whether to create one statewide union for teachers and directors.

That would allow them to negotiate with the state for increased resources – like health insurance, increased subsidies, and funding for training and education – that would bring more people into the childcare worker profession.

Finally, Washington’s Quality Rating and Improvement System (QRIS) could provide parents across the state with an easy way to compare one childcare facility with another — but only if a statewide roll-out is paired with (or preceded by) the aforementioned state subsidies or other resources. There’s not much point in rating something if there is no realistic avenue for improving that rating.

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