Thought Leaders: Childcare educators can’t make less, families can’t pay more

Early childhood educators (often called child care providers) cannot make less money and families cannot pay more for childcare. Yet, everyone depends on someone who depends on childcare. And every industry, from manufacturing to retail, is impacted by childcare issues.

What’s at the core of the childcare crisis?

Early childhood educators make an average of $16-$19 an hour. The poverty rate for early childhood educators in Colorado is 15.1 percent, and this segment is in the bottom 2% of lowest paid occupations in the country. Given this, it’s no surprise that 70% of local child care program directors have difficulty finding qualified staff.

Many of our early educators are parents. According to the Massachusetts Institute of Technology (MIT), a single parent of two children needs to make $58/hr to afford to live in Larimer County. A two-parent household with BOTH parents working (and 2 children in the home) each need a minimum of $31/hour to afford to live in Larimer County. This hourly rate is only a basic self-sufficiency wage, which means what is needed to afford housing, food and basic necessities.

As you can see, the gap between an early childhood educator’s hourly rate and the liveable wage is astronomical. So why is there such a huge disparity, yet families are feeling the crunch of childcare costs more than ever (in fact, childcare costs are outpacing inflation)?

The reason is rooted in the child care sector as a whole. Revenue in a child care program primarily comes in one form: parent fees and tuition. A family with two children, paying a hypothetical figure of $200/week per child, is contributing $1,600 of revenue to that program per month. A program that can house, say, 100 children, is then bringing in $160,000 a month to the child care center. Whoa, that seems like a lot of money, right? But wait–we are not considering the rules and regulations that guide child care. To ensure quality and safety, the state sets a minimum number of teachers and aides per classroom based on age. Then there are administrative staff, cleaning, cooks, food, materials and toys, maintenance for the building and outdoor play areas, etc. That $160k doesn’t cover all of their monthly expenses, let alone a living wage for the educators and other staff in a childcare center.

The only way to raise revenue is to increase family tuition rates. Therein lies the rub. If programs were to raise tuition to be able to raise the rates of pay for their educators, families would suffer. The Center for American Progress, a bipartisan policy institute, estimates that if child care centers were to raise the tuition rate to afford to pay a living wage for their educators, they would need to raise the rates by a whopping 42%. For our hypothetical family above, that equates to another $688 a month ($8,256/year), which is far from sustainable for the average American family. Child care continues to be a classic market failure, and early childhood educators are paying the price with unsustainably low wages.

For decades, childcare has been considered a personal issue. Yet it affects everyone in every single industry. Cost of living, cost of childcare, lack of childcare availability, low pay for the early childhood workforce, an increase in population, and inadequate state and federal funding are all contributing to childcare being a market failure across the nation and here in Northern Colorado.

If you want to learn more about the need and options for solving our childcare crisis, contact your local early childhood council or follow LarimerThrivebyFive.org.