On the North Coast, child care often a financial puzzle
Published 11:11 am Tuesday, October 25, 2022
After a full day that included a checkup with a registered nurse, playtime and naps, each child returned home clutching two take-home dinners: one for themself, a second for their mother.
It was 1943, in the midst of World War II, and women were entering the workforce in unprecedented numbers. Someone had to watch their children.
The Kaiser Child Care Center, whose daily routine is published in an online exhibit from the Oregon Secretary of State’s Office, was based in Portland and watched children between the ages of 18 months and 6 years old. Created by officials at the Kaiser shipyards, it relied on newly created federal aid for working mothers and cost families around $85 a week in today’s money.
During its two years of operation, it was one of the most prominent examples of a successful — and cost-effective — child care center in the country.
But when the war ended, so did the additional funding for child care.
When asked if child care ever had a golden era, that short phase 80 years ago is what Eva Manderson thought of first. Though she’s not a historian, the director of Northwest Regional Child Care Resource and Referral said those wartime resources often come up in conversations with other child care experts.
“There was that weight that’s taken off as a parent about ‘what’s happening with my child when they’re sick, or are they getting the care and the education that they need?’ So that moms could go in and be present at work.
“Which I think is the conversation that we’re having now even still, right? Like, employers need workers to come to work and they need them to have reliable child care that allows them to do that,” she said.
Today, employment and access to child care remain linked. It’s a resource most families and employers need, but one increasingly scarce and expensive on the North Coast.
Clatsop County is considered a child care desert for infants and toddlers, meaning there are over three children for every slot available at a child care center, according to a 2019 study from Oregon State University. The gap was further highlighted during the coronavirus pandemic.
For both working families and child care facilities, the shortage comes down to wages.
“Child care is costing more than mortgages,” Manderson said. “So if parents can’t afford, then child care workers make less. If child care workers make more, more parents can’t afford because it’s more expensive. And so it’s this continual tension between what can families pay and how little can child care workers make.”
Unlike most businesses, child care providers on the North Coast can be in high-demand and high-priced, while still failing to turn a profit. It’s a high-stakes financial puzzle, and centers often need additional outside funding to remain open.
County grant
Since 2017, Clatsop County has lost over half of its licensed child care capacity — more than 1,000 slots at licensed care centers, care homes and family homes.
Recently, the first round of a county grant awarded 12 providers a total of $226,500, which is estimated to add 127 slots.
The bulk of the money — $200,000 — came from the federal American Rescue Plan Act, and the remainder from contributions from Providence Seaside Hospital and Columbia Memorial Hospital.
The county has $300,000 of federal stimulus dollars remaining for child care, which will be available in the next two years.
Day cares that accepted the grant are required to take business classes from the Small Business Development Center associate director Jessica Newhall and Manderson. The program is collaborating with the Columbia County Small Business Development Center.
They expect 12 child care providers from Clatsop County to participate and two from Columbia County.
The five-part course aims to guide the centers in creating sustainable business models. In Newhall’s experience, child care businesses are the most challenging to counsel.
“The running of a child care business is extraordinarily complex and there’s many layers to it. It’s not as straightforward as a traditional business, because of the nature of the child care landscape between private and public money,” she said.
Owners face unique industry challenges, including laws and regulations on pricing and staff levels that contribute to a reliance on grants and reimbursements.
Infants and toddlers, for example, are limited to four children per staff member. Infant care is the most costly for businesses, and commonly the first to close to keep a center open.
“In most cases, we very rarely see a significantly profitable child care facility. Licensing and regulations and the very nature of child care, it does not lend itself very easily to be a high-profit business,” Newhall said. “And as a result, a lot of child care facilities rely on subsidization of various aspects of their business.”
Sometimes, though not in recent years, the Small Business Development Center has looked at the numbers and advised centers to close.
“Just because we found that the owners themselves, after doing the dollars and cents, they were making less than minimum wage,” she said. “Part of what our responsibility is is to make sure we are counseling people to be the best resource in the community that they can be.”
Sacrificing incomeSacrificing income to support families in need is a common practice in the child care industry.
In most cases, child care business owners enter the industry because they are parents themselves, or enjoy working with children. Many will watch them for free, at reduced rates or accept late payments when families cannot afford to pay.
“There’s a lot of self-sacrifice in this industry, because of the nature of the business itself, and the nature of caring for children and the compassionate nature of most of these individuals,” Newhall said. “The reality is — nationwide — child care is a broken system. We’ve had so much failed legislation at the federal and state level.”
It’s a sentiment echoed by Dan Gaffney, a leader on the county’s child care task force. He hopes the county grants will demonstrate that funding can be sustainable.
“This is about our entire community, our entire economy. Because if you don’t have reliable employees — who have to take care of their kids, No. 1 first priority — then you can’t provide the services that you want to provide,” he said.
In addition to taking classes at the Small Business Development Center, day cares that receive the county grant will also be provided and trained in using Wonderschool, a software for child care providers that helps with bill management and enrollment.
“One of the things that we want to do is to help them make sure they have a good solid business plan. Because many child care providers get into business, No. 1, because they care about kids. And that’s their passion, and that’s their calling. They don’t necessarily have a good solid business background,” Gaffney said.
Smaller child care centers typically struggle more than larger centers when it comes to financing.
Class size to staff ratio was a major budget consideration at Step Ahead Academy in Gearhart, a new licensed preschool that opened this fall. They’re hoping 18 students with two staff will be the right balance.
“Financially, we realized that the lower number of children that we have, the higher the enrollment tuition would have to be,” said Monika Oldham, the center’s director. “And so we maxed it out to 18.
“So we can still have a small class size where it’ll be 1 to 9 ratio, but yet still keep it in that price bracket that, again, we can have that longevity but yet we still feel like we’re right in that margin of other preschools in the area that we would be competitive,” she said.
The center has applied to the Oregon Department of Human Services’ Employment Related Day Care program, which offers copay options to families depending on size and income. The center also applied to the U.S. Coast Guard’s child care subsidy program.
Pricing, grants and enrollment have been a balancing act for the new preschool.
“We want to have something that is going to work with the community, but yet still give us a chance to make it as a business so we can be there and have that longevity,” she said.
In recent years, more licensed centers have closed than have opened, as of July, there were five fewer certified and registered centers and family centers than in 2017.