The Journal Gazette
Sunday, November 03, 2019 1:00 am

Care cost CONCERNS

Working parents find little relief in Indiana

KAREN FRANCISCO | The Journal Gazette

Amie Sarka knows about child care costs. While she attends school and works 20 hours a week, Sarka and her husband pay $125 a week for their 10-month-old son in a home-based child care program. The $6,500-a-year rate represents a savings from the nearly $10,000 they had paid annually for a center-based child care program.

Sarka said she paid even more for child care when her daughter, now age 8, lived with her mother in Florida while Sarka was stationed in Japan with the Navy.

Melanie Stauss, who pays for full-time care for her 3-year-old, said she's happy her children no longer need costly infant and toddler care.

“I was paying as much for day care as I was for my mortgage,” the Fort Wayne mother of two said in a text message. “It was very significant and tight. I can't wait for my son to be old enough for school.”

A newly released survey by Child Care Aware of America pegs Indiana among the most costly states in the nation for child care for infants and toddlers. An earlier survey by the Economic Policy Institute showed the same.

Infant care at an Indiana child-care center averages $12,390 a year, according to Child Care Aware, a nonprofit group that advocates for child-care affordability, accessibility, development and quality. The annual cost for an infant in a home-based care setting is $6,922. For a married couple with an infant in a child-care center, the cost consumes nearly 15% of their household income, a higher percentage than any of Indiana's neighboring states and one of the highest in the U.S. In Ohio, the figure is 11% In Kentucky, it's 9.4%.

According to the Economic Policy Institute, a typical family in Indiana would have to spend$22,170 annually on child care for an infant and a 4-year-old. 

Why is infant and toddler care so costly here?

“Not because we pay teachers so much,” said John Peirce, an early education consultant and advocate. “I know we don't pay our center-based teachers much.”

Madeleine Baker, chief executive officer of Early Childhood Alliance, said staffing is the greatest expense at the two learning centers the alliance operates in Fort Wayne. Infant care, in particular, is expensive because regulations require one adult caring for no more than four babies. 

“Families who are paying full tuition wonder, 'How could my cost be so high?' ” Baker said. “There's a misconception that centers are making so much money, but the money goes right back into the operational cost – teachers, required furnishings, formula, diapers.”

The overhead costs suppress salaries for early childhood employees.

“We don't pay at the level they should be paid,” Baker said. “As people with education credentials, the scale of compensation has never been up to par. That's a major systemic issue.”

Rebecca Carothers, early childhood education endowed chair/development director at Ivy Tech Community College Northeast, suggested more reasons for the high cost. She noted there are waiting lists for infant and toddler care in Indiana, with the number waiting far outweighing those in care. In addition, the state provides no subsidy. The primary sources of revenue for child care providers come from fees paid by families, federal Child Care and Development Fund subsidies and reimbursements from the federal Child and Adult Care Food Program for nutrition costs.

“No additional state of Indiana subsidies for children under age 4 are available in our state,” Carothers said.

Low teacher salaries at early childhood centers are the result of a tight margin which, in turn, makes it difficult to attract college students. To be a lead teacher in an Indiana center, employees must have at least a Child Development Associate credential, equivalent to9-12 credit hours at a community college, up to a bachelor's degree. Just more than half of the state's early childhood teachers hold an associate's degree or higher.

“The mean hourly wage of a preschool teacher in Indiana (excluding child care workers and special education preschool teachers) is $26,470,” Carothers said in an email. “This is 54% of the mean annual salary ($49,440) of a kindergarten teacher in Indiana. This is a significant difference to a worker who has invested in his or her education and is still making $10-$19 an hour at a local child care center. Many early childhood education students decide to get their (early childhood education) degrees and move on to a track that will lead them to a preschool-third grade teacher position in the school system, where they can earn double the salary.”

Carothers said she has counseled students whose parents are concerned about earnings potential.

“Of course parents and students want to earn a living wage – no matter how dedicated they are to their education and their chosen field of study in early childhood education,” she said.

Business' role

The high cost of child care is not a problem for families alone. When the cost becomes too great, employees leave the workforce to stay home and care for their children.

The owners of Indiana Stamp and Indiana Signworks faced that prospect in the early 2000s when four employees became expectant parents. Faced with the possibility of losing them, the company began offering infant care assistance, paying 33% of the cost of licensed child care up to 12 months. Company President Olivia Warner said the child care provider must be rated at Level 3 or 4 on the state's Paths to Quality child care rating system. She said it was formerly Level 2 care, but she learned the higher rating was needed to ensure the best care.

“Financially, it makes sense,” Warner said. “(The most recent assistance) cost us $1,900 for 12 months of care. For us to hire someone to replace that employee, it would have cost a lot more to hire and train. The minimum is probably about $4,000. I believe it – it takes a lot to hire a new employee.”

But Warner said the infant care subsidy goes beyond helping to recruit and retain workers.

“We're a family business and we're trying to cultivate that family feel,” she said. “It's not just (the employee) who matters – we want you to be comfortable knowing your children are well cared for while you are working.”

Warner will share that message with other employers as a panelist at this week's statewide Early Learning Summit for Economic Development, sponsored by Early Learning Indiana, Northeast Indiana Regional Partnership, Ivy Tech Community College and several major employers. The summit, which is Thursday at Purdue Fort Wayne, will focus on quality early care to support today's workforce and a future workforce.

Keynote speaker Jim Spurlino, president and CEO of an Ohio-based construction materials company, will make the case for investing in high-quality early childhood programs. He's a board member with ReadyNation, a group of business executives who advocate for policies and programs supporting children from birth to young adulthood as a means of strengthening the economy and workforce.

Why it matters

Amie Sarka, the Fort Wayne mother with a 10-month-old son, said her family's child care costs are “manageable” with her part-time hours and her husband's full-time job.

“It would be nice to cut the expense out completely if one of us worked from home,” she wrote. 

Peirce, a former Fort Wayne Community Schools board member, noted the greatest challenge is for families near the poverty line – those struggling to get by. In Allen County, he said, only 8% of infants are enrolled in high-quality programs and just 13% of toddlers are in high-quality care. 

“That's the important role of brain development,” Peirce said. “There's a growing awareness that the ages of birth to 3 are critical. If we go by the research on brain development, that's where we ought to be investing our money.”

It's easy to dismiss the high cost of quality child care if you're not paying the bills. But the affordability crisis affects every Hoosier. Families spending a third of their income on child care aren't spending money elsewhere – not on a down payment for a home, on restaurant meals, new clothes or anything else.

And as Warner notes, employeesfacing the high cost of child care might decide it's best to stay at home and care for their children. The state's workforce loses talent and the state's economy loses those earnings and tax revenue.

Lawmakers favor public assistance tied to education programs and employment, but too often fail to see the barriers – including child care costs – to both.

Assessments of the state's affordability should cover more than the cost of a house. When it comes to child care costs, Indiana doesn't measure up.

Karen Francisco is editorial page editor of The Journal Gazette.

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