New Report: Erie County points to Cornell ILR Buffalo Co-Lab analysis on the True Cost of Child Care

A recent study undertaken by the Cornell University ILR School in Buffalo, in partnership with the Live Well Erie Emergency Child Care Task Force, child care providers, and public officials has put a stark focus on the issue of child care in Erie County and the gross disparities that exist between the needs for equitably accessible, quality child care and current funding models. The study, The True Cost of Child Care: Erie County NY, sought to determine the actual cost of quality child care by modality in Erie County and compare those costs to NYS Office of Children and Family Services’ (“OCFS”) “market rate” price of care. The study also compared current costs with true costs if all child care workers were to earn a living wage. Cornell and Erie County will provide the data and analysis to county and state officials for consideration in public policy and budget negotiations in 2022. Lou Jean Fleron, Rusty Weaver, and Cathy Creighton led the study on behalf of the Cornell ILR Buffalo Co-Lab.

In addition to strains on families and caregivers as they search for quality child care, employers are also feeling the squeeze as they lose employees who are unable to find child care and are forced to drop out of the workforce or work fewer hours. Other workers are forced to juggle jobs and child care arrangements that are temporary, unsustainable and often lead to job loss and turnover for employers. Erie County has worked closely with the Buffalo Niagara Partnership on this issue to assess and ameliorate the effect on local employees and businesses.  

The study can be read here .

“Erie County was the first and only county in New York State to use U.S. CARES Act funding to support child care providers during the COVID-19 pandemic, allocating millions in grant funding to directly support childcare providers and adding additional funding to replenish and expand the childcare subsidy to include families earning up to 85% of the NYS median income. We provided a critical lifeline to our community then and we are urging NYS to continue that work now,” said Erie County Executive Mark C. Poloncarz. “This cost of care analysis was completed pursuant to a 2021 NYS Childcare Availability Task Force recommendation to close the gap between the market rate and the actual cost of care, and the data revealed here will heavily underscore the necessity for changes to the child care system statewide to better care for our children. I thank our partners at Cornell University and in the community for their work and look forward to bringing these findings to the Governor’s attention.”

“This Cornell-Erie County study of the True Costs of Child Care in Erie County identifies and quantifies gaps in the current system:  gaps between actual operating costs and NYS subsidy support; gaps between current wages and living wages for child care workers; and equity gaps in access, affordability, and sustainability,” said Lou Jean Fleron of the Cornell University ILR School in Buffalo. “Cornell has played a role in child care reform since the early 2000s and continues to provide actionable research and collaborative assistance aimed at a child care system that meets the needs and promotes equal opportunities for all children and parents, for child care workers as well as the general workforce and employers.  There is no longer any doubt that accessible quality child care is a universal benefit to the economy.  The job now is to reconstruct early child care and education as a public good.  Erie County is a leader in bringing stakeholders together to address the crisis locally and to promote public policies that advance long-term improvement.”        

The study’s findings revealed that in Erie County the number of jobs in child care grew for five years, from 2013-2018, before starting to fall in 2019. The industry’s current workforce numbers from 3,100 to 3,300 when including self-employed. That workforce is the lowest in over a decade, and recorded an 11% loss between 2019 and 2020 as child care workers left the industry for jobs with increasing wages in retail and fast-food. Average annual wages for full-time workers are just over $23,000, with a median hourly wage of just $10.38. Three-quarters of all child care workers earn less than $15/hour, compared to just one-third of all workers in Erie County. Many providers work unpaid hours, especially family and group family providers who report working between 1,000 and 1,200 hours per year for which they are not compensated.

“Several family daycare businesses have closed and continue to close due to low reimbursement rates for subsidized children. For example, I get paid $190.00 weekly for an infant that is in my care from 30-45 hours per week. Many of my parents use public transportation and their children are with me from 9-10 hours a day, 45-50 hours a week. Based on the market rate I get paid between $3.80 to $4.22 an hour,” said Diane Abrams, Director of Toot Toot Day Care. “I pay my staff minimum wage while I work 60- 70 hours a week, paying myself less than minimum wage and often not paying myself in order to pay staff.  Family daycare providers cannot continue providing child care to low income families under the current market rate. We must get paid for enrollment and the cost of care.”    

More than half of all child care workers lack employer health care, compared to one-quarter of the county-wide workforce. Child care workers in Erie County are disproportionately women (88%) and people of color (35%), therefore their low wages and poor benefits exacerbate existing patterns of economic and racial inequality. Given the foundational role that child care work plays in support of the entire workforce system, allowing these dynamics to play out uninterrupted has multiplying, and devastating, effects throughout society and the economy.

“Child care providers in Erie County have been caught in a difficult place for a long time, seeking to provide the best possible care while forced to do so with scant resources. This has resulted in long hours with low pay or sometimes no pay, and care suffers as a result,” said Commissioner of Social Services Marie A. Cannon. “Change at the state level would greatly ease the pressure on the child care industry, making it easier for our community partners to provide the level of quality care that all want to.”

The study utilized a three-pronged methodological approach:

• a professional on-line survey was conducted with all 499 Erie County licensed providers resulting in 234 valid responses, a remarkable 49%, yielding a margin of error of +/-4 %, and a sample well representative by geography and by modality;

• public geographic and economic data were expertly analyzed for understanding the economics and workforce of the local child care industry; and

• four focus groups, composed of eight to twelve providers each, by child care modality, examined nuances of true costs, as well as the challenges and opportunities for improving child care in Erie County

In-depth focus group conversations provided valuable information about the true cost of high-quality child care, focusing particularly on non-personnel costs. The concerns of providers in the focus groups mirrored findings of the survey and also highlighted less obvious, more inequitable, or unreimbursed cost factors. Among the most prominent cost concerns was unpaid working time, as Group and Family Day Care providers report working on average 25 hours a week uncompensated.

Seven out of ten survey respondents indicated that they currently do not make enough money to offer the level and quality of services they wish to provide. That situation is more severe for DSS subsidy recipients: over 80% of subsidized providers report inadequate revenue compared with 50% of providers who do not care for subsidy children, meaning that the facilities serving more financially disempowered children are themselves more financially disempowered. Two-thirds of providers who accept DSS subsidies agree that existing subsidy rates do not cover their current costs of care. Yet, subsidized facilities report higher interest in expansion of services, an important source of unrealized capacity. When asked to rank eight categories of needed investment if they had sufficient funding, higher salaries and better benefits for current staff, additional staff, and capital improvements top the list.

"Child care is an essential workforce support. Two million women remain out of work and millions more could be working if we valued, and subsequently funded, quality child care. Erie County and Cornell's invaluable report illustrates just how impossible the current system is for child care providers. These providers are predominantly female small business owners who choose to serve our most marginalized families. Our economy will not thrive without a better system to support working parents, child care business owners, and child care providers," added Sheri Scavone, CEO, WNY Women's Foundation.

Kimberly Suminski, CEO of Child Care Resource Network, said, “We applaud leaders in County government for taking the initiative to commission a first of its kind study of child care wages and the true cost of providing child care. For too long child care providers have been struggling to maintain their business.  This study identifies the struggles that providers face every day.  Child Care Resource Network has supported this endeavor since its inception.  We are moving in the right direction for increasing sustainable wages for Child Care Providers. Child Care Providers are finally being heard.  We need to improve this broken system.  Our children deserve the best and so do the providers that care for them.”

The Poloncarz administration has sent a letter to NYS Governor Hochul outlining the child care issue in Erie County and urging action in the 2022-23 state budget process. Supported by the data in the study, Erie County will request NYS to increase the state market rate such that it more closely aligns with the actual cost of care, and to increase the total NYS Child Care Block Grant allotment given to social service districts around the state such that they can pay the increased market rate without having to decrease the number of children/families receiving the subsidy.

"Our economy will not fully recover unless we make child care more affordable," said Assemblymember Monica Wallace.  "Access to quality, affordable child care is critical to helping parents get back to work and addressing our current labor shortage.  I want to thank Erie County and Cornell University for producing this study to help us understand why child care is so expensive and what we can do to address these costs.  I look forward to working with my colleagues in the state legislature to find solutions to address this growing child care crisis."

A virtual presentation of the study, hosted by Cornell University, will take place on February 3, 2022 from 1:00pm-2:00pm.

Visit https://bit.ly/3nDTdh7  to register.