The childcare crisis is more than an issue for me. It is my core reason for running for Iowa senate. I’ve been an advocate for state and national childcare policy for 15 years. I have written multiple childcare policy proposals.
Iowa lost 1/3 of our childcare programs in the past five years, which doesn’t include childcare programs lost since July 1, 2021. Since then, there’s been a worker shortage that’s possibly closing more daycares than the pandemic. Unfortunately, the loss of daycares this year will include my center for children with special needs.
The workforce crisis has had a more devastating impact on childcare than other industries. With below-market government subsidies and a disparity between the cost of providing quality care and what childcare consumers can afford to pay, providers are not reimbursed for the true cost of their services. This leaves most childcare centers fighting to survive with extremely narrow profit margins, even at full capacity. Child care is labor-intensive work, and regulations do not allow for reductions in our workforce expenses. The only way centers can break even is to pay our staff poverty wages.
As businesses began to return to normal operations last summer, the demand for workers increased, but for a variety of reasons, including the cost of childcare, many people chose to not return to the workforce. Employers across all industries were forced to raise wages to compete for the limited supply of workers. Childcare centers did not have the ability to raise wages because it would require us to raise rates on families that already can’t afford childcare. Without enough workers, we legally had to turn away children. Decreased enrollment means decreased revenue, so that centers that were barely breaking even are now operating at a loss.
The childcare system is unsustainable without government subsidies. Iowa is using federal funds for grants to open new childcare classrooms. This is not working because those new centers also cannot find staff, so many of the classrooms are sitting empty.
We need to provide enough funding to reduce the financial burden on parents while also offering a living wage to childcare workers. We can fund an expansion of the child development block grant through a payroll tax on all employers. The employers will recoup what they pay many times over when parents can afford to go back to work, increasing company productivity and easing supply chain issues.