The Unintended Consequences of a $15 Wage on Child Care

Universal pre-K could help, but costs are still likely to go up for working parents.

Ask Jessie Conta whether child-care workers should be paid more, and the answer is, “Of course!” The Greenwood mom, a genetic counselor at Seattle Children’s, has nothing but admiration for the “endless patience, kindness, and love” shown her baby and toddler at the Interlake Child Care & Learning Center. “Hi, Jessie. How was your day?” they’ll say cheerfully at pick-up time, despite being surrounded by kids inevitably melting down, restless to go home. If the roles were reversed, says Conta, she’d “totally be losing it.”

She knows that Interlake teachers’ average wage—between $13 and $14 an hour, according to executive director Carol Goss—means they can’t afford some of the simple things Conta takes for granted.

Yet, when mulling over the powerful Seattle movement to raise the minimum wage to $15 an hour, Conta has some concerns. If tuition rose to cover the increase, she’d be in a tight spot. She and her husband, a housing contractor, already pay $2,200 a month—more than $26,000 a year—for child care. That’s more than their mortgage payments—and their baby goes to the center only two days a week. “I’m lucky that I’m home on Fridays and I have parents nearby,” she says. She knows that other parents pay upward of $3,000 a month.

“Some parents pay more for child care than for college,” observes Kristin Rowe-Finkbeiner, the Isssaquah-based CEO of the national advocacy group Moms Rising. “It?s a crisis”—one fueled by the United States’ position as one of the few wealthy Western countries that lacks substantial public subsidies for child care.

Herein lies a potential unintended consequence of the $15-wage movement. Will it exacerbate the excruciating conundrum faced by all but the richest of working parents?

“That’s a great question,” says David Rolf, president of SEIU 775 and the co-chair of a minimum-wage advisory committee convened by the mayor. “That’s something we’ll have to take a look at.” Rolf points to another City Hall initiative, centered on universal preschool, that might serendipitously help provide a solution. If so, it’s but a partial one.

There is little question that without a change in the way child care is financed, a wage hike will result in higher fees for parents. Consider a survey conducted last year by the Child Care Directors Association of Greater Seattle. An unanimous 100 percent said they had at least some teachers who make less than $15 an hour. Twenty-five percent of respondents said all their teachers earn less than that.

Child-care centers are unlike the wealthy fast-food corporations that the minimum-wage movement rails against. They “run pretty lean,” says Johnny Otto, an association board member and executive director of Small Faces Child Development Center in Crown Hill. Most, he says, spend between 85 and 90 percent of their revenue on salaries. If salaries are required to go up, he says there would be only two choices: cutting staff or raising tuition. And state regulations regarding staff/child ratios prevent many centers from cutting staff.

Otto says he and his board do see the benefits of raising the minimum wage. “You’re going to see teachers who stick around longer,” he says. Given the current low wages, turnover in the industry is so high that he says parents will tell you their kids have had “two, three, four teachers in a single year.”

Plus, Otto predicts that higher wages will attract better-trained teachers, and give those without degrees the means to go back to school. “It’s going to be great for the quality of preschool and its professionalism,” he says.

But he also recognizes that there would be a cost. Running the numbers, he calculates that Small Faces, which charges $1,255 a month for full-time care, would have to raise its fees by 15 percent. That’s less than other centers would, he says, because the center owns its building and derives extra income from renting out surplus space.

Goss, of Interlake Child Care, says that if a $15 minimum wage were enacted, she’d have to consider cutting some of the benefits offered her unionized teachers, including health insurance and tuition for community-college classes in early childhood education. Still, she thinks it is likely she would have to raise fees, although she doesn’t know by how much. Recognizing that the Wallingford center serves parents who “are struggling to pay some of the highest bills they’ll ever have,” and who in some cases have put off home ownership to do so, she worries about pricing the center beyond what the market will bear.

The economics of child-care centers are tricky, adds Otto. When rents went up during the housing boom, a number of centers closed, he says. When the bust came along and rents flattened, parents lost their jobs and took their kids out of child care. More centers closed. Between 2006 and 2013, according to the state Department of Early Learning, Seattle lost 2,600 child-care spots for preschoolers, a 14 percent drop. Hence the waiting lists of more than a year at many centers, making child care not only exorbitantly expensive but also harder than ever to find.

Rolf argues that the potential impact on child care—as well as on a range of social services, like caring for the mentally ill, that have little extra money for pay raises—should not keep the city from raising the minimum wage. “We’re doing something wrong if the only way to provide these services is by creating an impoverished workforce. If it’s important work, we’re going to have to figure out a way to pay for it.”

Rowe-Finkbeiner expresses a similar point of view. While saying she’s not familiar enough with the local $15-wage effort to take a stand, she stresses: “It’s critically important not to pit child-care workers against parents. We need to have child-care workers make a livable wage, and we need more [public] investments in child care.”

She sees momentum toward that goal, citing, for instance, a Congressional bill that would expand tax credits for child-care costs. But as University of Massachusetts at Amherst sociologist Joya Misra points out, there has been antipathy in this country to creating the kind of broader public system that is common in Europe, where child care is often viewed as essential as K-12 education. “It’s just such a bizarre situation,” Misra says of the American idea that child care is “just something you’re responsible for,” as if children were “pets” existing for the “pleasure of parents” rather than productive citizens in the making.

This attitude persists, Misra says, despite research abroad showing that affordable, widely available child care “is the solution to so many things,” including high poverty rates, income inequality, and unemployment among women.

To the extent that this issue has been addressed politically, much of the talk has focused on subsidies for high-quality preschool, framing the debate in terms of education rather than child care. That’s certainly true locally.

“I’m not prepared to talk about child care,” says Tim Burgess, who as chair of Seattle City Council’s education and governance committee is leading the city’s push for universal preschool. Just back from a tour of publicly subsidized preschools in Boston and New Jersey, he says his focus is on creating a system for 3- and 4-year-olds that will offer “six or six and a half hours” a day of play-based learning designed to enhance kindergarten readiness.

As Rolf suggests, this might nevertheless help families struggling to pay child-care costs. Burgess says his proposal, expected to go before voters this November in the form of a referendum seeking tax money, would likely be free for families making under 200 percent of the federal poverty line ($47,000 for a family of four) and priced according to a sliding scale for others.

The limited preschool hours would, however, mean that many families would need wrap-around care. And it wouldn’t address care at all for children under 3, which at most centers is the most expensive of all.

So there’s more figuring out to do. And one can’t help but wonder when—or if—the city will get around to it. Considering both local and national movements to raise the minimum wage, Misra suggests the time is now. “I honestly don’t believe we can have a conversation about the minimum wage without having a conversation about finding ways to subsidize child care,” she says. “They need to happen at the same time.”

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