A revived economy bringing people back to work is not working out for everyone. Businesses throughout our region and the state report struggles hiring people into entry-level and even experienced jobs. But proposals to cancel some pandemic unemployment benefits, perhaps replacing them with signing bonuses to push people back into the labor force, are not the solution, at least not by themselves. They don’t remove a major barrier between many would-be workers and their jobs: affordable, reliable child care.
As Gov. Charlie Baker and lawmakers negotiate how to carve up $5.4 billion headed to the state from the American Rescue Plan Act, they would do well to consider steps to support child care centers that haven’t reopened, while helping those at partial capacity return to full operation.
The state has already recognized the need. This spring the Department of Early Education and Care announced $30 million in grants to stabilize the balance sheets of child care centers weakened by reduced enrollment. Half of those grants were meant to recruit and keep qualified staff at child care centers, while the other half were intended to help family-based providers. In addition, the department was eyeing another $110 million to stabilize the state’s child care capacity, depending upon legislative approval.
Three months later, child care centers remain in slow recovery mode. The 209,102 licensed child care spots available in Massachusetts on June 6 represented 90% of the state’s capacity prior to the pandemic, according to a Department of Early Education and Care report.
In the North Shore and Merrimack Valley regions, group and school-age care centers have returned to 94% of their pre-pandemic capacity, while family centers are at 85%. The difference works out to 228 child care slots in this region still unavailable since the start of pandemic-related closures — enough to fill several full-size centers.
Center operators face labor market struggles of their own. Many cite the same staffing shortages that plague other industries, preventing them from operating at full capacity. At the end of last year, center-based providers were estimating losses on the order of $6,000 per month, according to the report, while family-based providers were losing an average of $600 per month. Even though the state had expedited the licensing process for center workers, the report noted, “workforce shortages account for the biggest constraint on capacity.”
And workforce shortages in child care centers have a compounding effect across the economy. Without access to reliable, affordable care for their children, workers stay on the sidelines. Those at the lower end of the pay scale find it especially difficult to rationalize the opportunity cost of just getting to their jobs.
Even before the pandemic triggered restrictions that closed child care providers, the state was experiencing a scarcity of child care. Indeed, it was a spoiler on economic growth. The effect has only gotten more dramatic as businesses from restaurants to tourism destinations to delivery services look to quickly scale up their labor forces to recover as much income as possible.
It’s not just a Massachusetts or New Hampshire problem, either. As of last fall, half of the parents who’d not yet returned to work cited child care as a reason, according to research by the U.S. Chamber of Commerce Foundation. To be sure, some of that was addressed as public schools resumed in-person classes, but many families with younger children remain in the lurch.
A report by the foundation noted how lack of child care access factors into long-term career decisions: “Eleven percent of parents have declined a new opportunity, such as a promotion or a new job, in the past three months to provide child care.”
The same dynamics figure into decisions to return to jobs that barely cover the cost of child care, if at all.
In Massachusetts, business groups are leaning into Baker and state leaders to cancel the federal supplemental unemployment benefit that was a blessing to so many out-of-work people at the height of the pandemic before it’s set to expire on its own in September. Their proposal is to steer those $300 weekly benefits into other return-to-work incentives.
Other states that have tried the same approach haven’t necessarily seen people return to the workforce as hoped. That’s because workers’ reticence to return is rooted in other factors. A major one is their struggle to find safe, affordable and reliable places for their children to spend the day.