Special Reports

Fees strain parents, but centers still barely paying the bills

Many parents save for more than a decade for their children’s college education. There are scholarships and federal assistance to help young adults and their parents afford that huge investment in their future.

But many parents are surprised to realize that four years in day care generally costs more.

At a time when most parents are early in their careers and have far less earning power, they pay thousands of dollars a year for day care — with no scholarships and, in most cases, no government help.

For many of them, the expense became even harder to shoulder during the recession, as workers lost jobs or hours. That translated into less income for day care providers and fewer hours for day care workers, who are often paid little more than minimum wage and receive few to no benefits.

There are federal programs to help the poorest families. And a 2009 national survey showed Georgia as having the fifth most affordable day care in the country for infants and school-age children, and the eighth most affordable for 4-year-olds.

But a slow economic recovery, new state day care requirements and a poor parental understanding of day care make it likely that the system will continue to experience a shortfall, many early childhood advocates say.

That results in high teacher turnover and poorer quality facilities, materials and supplies for children in care, said Pam Tatum, CEO of the Georgia advocacy organization Quality Care for Children. The agency tries to get children into quality early childhood programs by advising both parents and providers.

“I’ve heard from legislators, ‘Well, kids don’t need the Cadillac (of care),’ ’’ Tatum said. “We’re so far away from a Caddy. A really nice Chevy would be great.”

Costs to parents

Many parents say the cost of day care is comparable to a car payment or, for two children, a house payment. The National Association of Child Care Resource and Referral Agencies found in 2007 that the cost of child care nationally was increasing at more than twice the rate of inflation. In 2009, the cost of keeping an infant in a day care center exceeded families’ average annual food costs.

Parents who call Quality Care for Children’s toll-free hot line for help finding child care usually ask first about cost, Tatum said.

But nationally, parent surveys conducted in 2008 by the resource and referral group found that cost was the third most important factor to parents in choosing child care, after a safe environment and a learning environment. Still, for 22 percent of parents, affordability was their biggest concern.

Infant day care takes up about 8.5 percent of the annual income of the average two-parent family in Georgia, but almost half the income of a two-parent family at the poverty line, according to data compiled by the resource group. The average single mom spends 27 percent of her income on child care for an infant.

Quality Care for Children offers a program that pays for temporary child care for families in crisis, or those who need help but earn too much to be eligible for federal subsidies.

However, demand since the recession became so great that the program can’t serve any more than the 300 children it’s helping now, Tatum said.

“We’ve seen a 30 percent increase in requests for assistance, many from those who have never required any kind of assistance before,” she said.

Although the cost of day care may be a strain for many Georgia families, in 2009 it was still among the nation’s cheapest as a proportion of median income, a study by the NACCRRA found.

“That’s great, but that also tells us we’re not being greedy,” said Carolyn Salvador, executive director of the Georgia Child Care Association, which represents licensed child care providers. “We’re not pushing the envelope on tuition, and we’re not paying our staff that much.”

According to the Child Policy Partnership, a consortium of Georgia academic researchers, the average weekly fee for infants in day care ranges from $70 to $120 a week in home-based day cares and from $80 to $145 at centers.

Georgia is among the states with the largest cost difference between cities and rural areas, according to the NACCRRA. Day care costs about twice as much in Georgia cities.

And Georgia’s state averages are inflated by day care costs in Atlanta, which are much higher than the rest of the state, including other urban areas. The highest priced day care in Macon is basically at the lowest end of the price range in Atlanta.

That means that day care prices outside metro Atlanta are likely comparable to the very lowest in the Southeast, such as those in Mississippi and Alabama, industry insiders say.

“It’s cheap because we have a lot of access, and we aren’t competitive about child care because we don’t view it as important like K-12,” said Stacey Neuharth-Pritchett, president of the nonprofit advocacy and training organization Georgia Association on Young Children.

Salvador said a public education campaign is needed.

“If you go buy a Mercedes, you know it’s a high-quality product, so you expect to pay more,” said Salvador, who used to own a nationally accredited day care center herself. “But parents don’t understand what high-quality child care is, and so they don’t expect to pay more.”

Pay for day care teachers

Although parents may feel fees are high, they don’t translate into high wages for early childhood workers. Payroll is the biggest expense for day care owners, Salvador said.

“You’d probably make more money in fast food than caring for our children,” said Neuharth-Pritchett.

Daralynn Gilliam, who has worked as a teacher in Atlanta-area day cares for 23 years, says the low pay and lack of respect are the major reasons for the turnover.

“The long hours are treacherous,” she wrote in an e-mail. “After running over the entire building to relieve other employees for lunch, cover if they are absent or left with too many kids alone, (then) disrespected and sometimes embarrassed by the manager or owner — this is all coupled with low pay! This is hard on anyone.”

Gilliam said that at her most recent day care job, which she quit last fall, the center owner ordered employees to attract more customers and started withholding paychecks if enrollment dropped beyond a certain point.

In 2008, the average wage for a child care worker in Georgia was just $17,410 a year, according to U.S. Department of Labor data. That wage was 11th-lowest among states.

The Child Policy Partnership reports that the average wage for Georgia’s lead teachers is $10.45 per hour, and other teaching staff earn an average of $7.94 per hour. In family child care homes, the average hourly wage for paid assistant caregivers is $7.09.

Theresa Prestwood, vice president for marketing at Quality Care for Children, said the majority of child care providers don’t receive benefits.

“We tried to negotiate benefits for workers, but providers were horrified at the cost,” she said.

Salvador said many centers provide vacation and holiday pay but little else. Members of her association can participate in a medical plan that, unlike most, doesn’t require an owner contribution or a minimum teacher participation.

“One of the largest things we were hearing from our providers was that they’d like to (provide medical benefits) but can’t afford to contribute,” Salvador said.

Another way day cares save money is by cutting teacher hours. It’s common to send teachers home if the number of children in a class drops below the state threshold requiring an additional teacher to be present.

“That’s always one of the unwritten things you do: You constantly ask, ‘How many kids do you have (in the room)?’ Salvador said. “Can you cut hours when kids leave? Then you don’t have to cut an individual.”

Gilliam said she sometimes worked just 10 hours a week at her last job because she’d be sent home after a couple of hours.

Although paying for fewer hours keeps costs down in some respects, it may contribute to higher teacher turnover. That can later increase owners’ costs because they must train new employees, which may become more expensive as educational requirements for day care teachers get tougher.

Georgia is trying to improve the quality of day care, partly by requiring day care lead teachers to earn a child development associate degree by 2012. State assistance is available to basically eliminate that cost initially, but most of the funding won’t be available once the first wave of teachers earns degrees.

On the bright side, the higher educational requirements could help increase teacher pay over time, Salvador said.

But in the short term, many owners say they can’t afford to pay more and they anticipate better educated day care workers will be attracted away by public school jobs, which come with higher pay and generous benefits.

“Quality is expensive. You get a well-meaning person who is good with kids and is paid $8 an hour — if they get more education they want $12 or $15 an hour,” said Julie Moore, executive director of the Bibb County nonprofit Education First.

Day cares struggling financially

Salvador says most day care centers aren’t shutting teachers out of profits. Rather, they aren’t making much profit themselves.

About 600 day care centers in Georgia closed last year, she said. To stay afloat, many of them are either dropping tuition, staying open longer hours or offering part-time care for the first time.

“You’re doing whatever you can to keep the doors open,” she said.

At the same time, the recession has left many owners carrying more bad debt from bounced checks and extended unpaid tuition, Salvador said.

Tatum said Quality Care for Children offered to create a centralized billing service to help day cares. But they weren’t interested because they want to be able to negotiate fees with parents.

“We heard story after story about how programs let kids come for free while their parents were unemployed, or waived late fees or more,” Tatum said. “They drew a line and said, ‘Yeah, this is a business. But ... we’re not the kind of business that kicks kids out.’ ’’

Although strapped themselves, the owners of major day care chains such as Children’s Friend and Child Care Network say they fear raising rates will drive away customers and leave more children in unlicensed care — or no care at all.

Eileen Barney, supervisor for child protective services at the Bibb County Department of Family and Children Services, estimated that a fifth to a quarter of neglect cases involve unsupervised children, often kids left alone while their parents work.

“Centers are closing down, family child care providers are going out of business, and there are increased vacancies in the programs that are still open,” Tatum said. “So where we’re worried about is: Where are the kids going?”

The answer in some cases is probably unlicensed care. Those unregulated caregivers don’t undergo background checks or monitoring.

Tatum said her agency used to help about 80 new Georgia child care providers a month get started. Many of them were home-based day cares serving four to six children. But new starts have dropped to a handful a month, a drop that may be related to the new education requirement, she said.

That could cause problems because when the economy starts to rebound and demand for day care increases, usually those family day cares are the fastest to open up in response, Tatum said.

“Standards are now pretty high for family child care. That’s good for quality, but it makes it difficult to respond to increased demand,” Tatum said. “We’re monitoring that closely.”

Quality Care for Children held focus groups to learn more about what kind of support day cares of all kinds need most.

The agency launched a new network this spring to purchase food and supplies in large quantities at a discount for day care centers that pay a membership fee. It also found a computer program to help day care directors plan menus and order food so they don’t lose money on food waste.

Arguments for public funding

“Programs can’t afford to provide quality and parents can’t afford to pay for it,” Tatum said. “Everywhere you turn in this field, there’s not enough money. To me, what this says is the market-based system for early child care doesn’t work any more than it would if you abolished public education.”

Almost three-quarters of parents surveyed by NACCRRA said they favored providing public funding to make child care more affordable. Sixty-three percent of parents said they were willing to pay an extra $10 a year in taxes to improve child care quality. More than half were willing to pay $50 a year extra in taxes, according to the survey.

NACCRRA advocates that the federal government improve the federal tax code to help families pay for care and underwrite day care “so that all families, not just wealthy families, can afford the cost of quality care.”

Tatum compared providing public support for day care to providing grants for college students.

Prestwood said, “I realized I could save $6,000 by sending my daughter to Georgia Tech instead of day care.”

The average annual cost of tuition and fees for a Georgia family at a four-year state college for the 2009-2010 academic year was $4,968 — about $700 less a year than sending a 4-year-old to day care, and about $1,500 less than a year of day care for an infant, according to data compiled by the National Association of Child Care Resource and Referral Agencies.

“This is an equity issue,” Tatum said. “You want to know why the differences in third grade scores, look at where they were in early child care. If you’re very poor, you have Head Start. If you’re very rich, you can pay for premium. It’s the working families in the middle who get lost.”

To contact writer S. Heather Duncan, call 744-4225.

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