Child care — the ‘workforce behind the workforce’ — is in crisis in Kentucky

Kentucky lawmakers, concerned that the state has half the workers it needs, cut unemployment benefits to force those who lose jobs to get back to work quicker and set up a program to get ex-inmates directly from prisons into jobs.

But a direct, long-overdue way to beef up the workforce would be to provide affordable and quality child care. 

“The lack of accessible child care already accounts for a loss of over $570 million in lost earnings, business productivity and tax revenue each year in Kentucky,”  according to Rep. Samara Heavrin, R-Leitchfield, co-chair of the bipartisan Early Childhood Education Task Force.

Also, the flow of $763 million in federal pandemic funds for state child care ends in September. The Biden administration plan to restart child-tax credits to parents — a 2021 program that reduced child poverty by half — is unlikely to gain GOP congressional support.

With the federal infusion, the Beshear administration increased income limits for families receiving subsidies, raised payments to providers and suspended co-pays for low-income families. The governor’s office is looking for a way to continue some of this support until the 2024 legislative session.

But Kentucky cannot afford to wait to elevate child care as a top priority.

“Kentucky’s child care sector is like an unstable medical patient,” said Benjamin M. Gies of the Prichard Committee for Academic Excellence. “The patient suffered for years prior to the pandemic, thanks to a failed business model that left over half of all Kentuckians in a child care desert. Federal pandemic relief placed the patient in stable, but still critical, condition.”

The state needs a comprehensive refashioning of all early-childhood education — including what’s offered in schools and in approved homes —into a more seamless system, argue children’s advocates.

Prichard proposes a $1 billion annual investment by 2026 to include funds for child care and preschool assistance, all-day kindergarten, teacher training and school transportation. For example: Washington state’s Fair Start for Kids Act sets $1.1 billion in permanent funding to make child care more affordable.

Last year, the Kentucky legislature approved an innovative Employee Assistance Partnership Program, in which the state matches the contributions businesses and nonprofits make to employee child care. This $15 million, one-year pilot program starts taking employer applications in April.

“We need to encourage more of our businesses here in Kentucky to start looking at offering some type of child care as a benefit to their employees, just as they would insurance or leave time,” said Mandy Simpson of Metro United Way. “Our commonwealth cannot afford to see child care access worsen.”

State economic officials should follow President Biden’s lead in mandating that microchip companies seeking federal incentives must provide quality child care. Access to child care should be part of negotiations over state business incentives.

To understand how dire Kentucky’s situation is, here are some challenges facing children, providers, and families:

The state ranks No. 41 in the nation in the number of three- and four-year olds enrolled in preschool. That’s a fall from No. 28 in 2008. In 2020, only 53% of public-school kindergartners were identified as being ready for the classroom. That does not bode well for the future generations of potential workers.

Prichard, United Way and other advocates produced an August survey of 500 childcare providers, which found that the end of pandemic funding means:

• Over 70 percent will be forced to raise tuition.
• Close to 40 percent would cut staff wages.
• Close to 30 percent would lay off staff.
• Over 20 percent of would permanently close.

In the decade before 2021, the number of providers dropped 46.3%, according to the Kentucky Center for Economic Policy (KCEP). To serve rural areas with few providers, the legislative task force proposes training more people to provide home-based day care. Another proposal suggests zoning-law changes to allow child care centers to open closer to where people work.

Most providers used federal funds to pay staff, according to the survey. Average annual pay for Kentucky child care workers in 2020 was $20,423, which was under the $21,960 poverty line for a family of three. The legislative task force has proposed that the state consider ways to improve pay, training and education.

It’s ironic, Simpson said, that the state is counting on child care workers to help raise families out of poverty “when they are in poverty themselves.”

The state’s reimbursement rate for providers varies based on county, age of the child and provider licensing. The daily rate for full-day infant care can range from $27 to $47. The federal standard is to pay 75% of the market rate. Kentucky, however, pays just 57% of the market rate for infant care in licensed centers, according to a March report by the Center of American Progress.

An estimated 45,000 Kentuckians struggle due to a lack of child care and early education access and affordability, according to a Kentucky Chamber Foundation report. More than 46 percent of parents in a 2020 survey indicated that someone in the family had quit a job, did not take a job, or changed jobs due to child care issues. Of the state’s 525 public preschool programs, only 94 provide full-day services.

Parents without state subsidies pay an average $35.55 per day for full-time toddler care in a mid-to-large-sized licensed center, according to a KECP report. At five days a week, 50 weeks per year, that’s nearly $8,890 — more than the $5,460 annual full-time community-college tuition.

In July, Kentucky increased income limits for families to qualify for state subsidies. Now, a family of four can earn up to $5,504 a month, up from $4,417. Work, job search or enrollment in educational programs remain requirements for the aid.

Other states also have increased income limits. Iowa doubled to $90,000 the amount families could earn and allowed for a gradual transition off aid, rather than an abrupt cutoff.

Overall, Kentucky’s child care situation “can look and feel really bleak,” Simpson said. Yet she is optimistic that key lawmakers and officials understand the issues and proposed ideas. “It’s putting them operational — that’s the challenge,” she said.

Perhaps the care of preschoolers and the financial burden on families really will matter now that state leaders desperately search for workers. As Rep. Heavrin puts it: “Child care is the workforce behind the workforce.”