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November 6, 2023 at 6:45 a.m. EST
Americans are about to learn what happens when that “softer” infrastructure crumbles, because the last of several pandemic-related child-care subsidy programs, the Child Care Stabilization Grant passed in 2021, expired on Sept. 30.
Census data suggest that, as things are, the child-care industry nationwide has been operating in the red for two straight years. Now, as programs still stressed by the pandemic lose a major source of public funds, many programs around the country are considering closure. When these businesses do shut down, they can send shock waves throughout their local economies. The shuttered child-care business sheds jobs; parents who relied on that business lose care arrangements for their kids, which in turn disrupts parents’ ability to work; and the employers of those parents must then scramble to adjust for lost workforce hours.
While each of those can feel like an individual misfortune, they are all part of a larger system of how our country cares for our young while adults work — or fails to do so. And the ripple effects can be enormous. Here’s one story of what happened downstream when a single day-care center in Wisconsin shut its doors.
Even before the pandemic, child-care provider Leah Zastoupil, who owned and ran Zasty’s Family Child Care out of her home, never exactly had an easy time of it.
Pre-covid, she typically worked 70-hour weeks: 50 hours caring for the kids, plus 20 spent on cooking, cleaning, paperwork and the like.
She loves working with kids, she said, “but it’s a huge burnout profession.”
Razor-thin profit margins have long been the norm. While the costs of K-12 public education are covered by taxes, most parents do not have access to public care for children from birth through age 4 and, if they work, must find a way to cover those hours themselves. Regulations require minimum teacher-to-child ratios, which drive up costs; but providers cannot easily pass on those costs to parents who are already struggling to afford care. The result is that care providers must budget every penny — and operate at full regulated capacity at virtually all times — to stay in the black.
Then along came the pandemic, which blew up that fragile business model.
Throughout the country, parents pulled their kids out of care. Staff members fearing illness also quit, which required providers to further ratchet down enrollment.
Nationwide, an estimated 16,000 child-care providers across 37 states closed their doors entirely between December 2019 and March 2021, according to the national nonprofit Child Care Aware of America.
In Zastoupil’s area — the small town of Milton, Wis., about an hour outside Milwaukee — two day-care organizations closed. Zastoupil kept hers open but had to take on even more hours (for a total of about 90 per week, she estimates) to cover additional cleaning, community coronavirus testing and parental communications.
From 2020 to 2021, in response to these kinds of strains, Congress passed a series of temporary child-care subsidy programs that were administered by states.
It was a lifesaver for organizations such as Zasty’s, which in December 2020 began receiving $1,000 monthly grants. The money helped defray rising costs, particularly for the groceries she bought for children’s meals. The main way she used the funds, though, was to raise the wages of the part-time staff she had recruited during the pandemic, from $14 to $20 per hour. Child-care employers around the country had struggled to retain workers as wages in other sectors rose.
“It’s a difficult job, and you’re often getting peanuts,” Zastoupil said. With the grant money, she could finally offer hourly pay competitive with her local Walmart or Kwik Trip.
But the government subsidy program was temporary. In May, as federal money ran low, Wisconsin cut its monthly grants in half. The last tranche of federal dollars funding the state program was slated to expire on Sept. 30.
Zastoupil knew she couldn’t maintain her employees, and therefore the business, without this subsidy. She could not endure the hours required to run the program entirely by herself. Raising tuition to compensate for lost grant money was not viable, either.
“It comes to a point where you ask if your parents are going to stay home rather than pay for day care, because of their costs being so high,” she said. “For my parents, if you’ve got two kids in day care, that’s already as much as your mortgage.”
Reluctantly, on May 19, she closed her doors for good. She was not alone: Across Wisconsin, 168 child-care businesses, which collectively had a regulated capacity to care for nearly 5,000 kids, closed in the three months following the grant cuts, according to state data collected by Corrine Hendrickson, a child-care provider and advocate of additional funding.
Even though she knew it made financial sense, for Zastoupil, the decision to walk away was hard. She had run this business for 18 years. She loved the kids and still kept in touch with many who had graduated from her program. She had strong bonds with the parents, too.
“There were a lot of tears,” Zastoupil said. “We were all family. I supported and raised their kids for many, many years. I was the only child-care provider for many of these kids. So it was a hard conversation to have with each and every one of them.”
Working parents with few options
When Zasty’s closed, 13 children in the Milton area lost their day-care arrangements. Two of those children were Abby Steinhoff’s sons, now ages 4 and 2.
Steinhoff loved sending her boys to Zasty’s. It was near her husband’s work, and Zastoupil “treated the kids as if they were her own,” Steinhoff said. “They were so happy there.”
Steinhoff also remembered how hard it was to find affordable care before she finally found availability at Zasty’s. “I was very sad when we had to start over,” she said.
When Steinhoff learned that Zasty’s was closing — sometime in early May, she recalls — she immediately began calling other providers. And calling. And calling.
“We have no family nearby who can help in a pinch, no babysitter, nothing,” she said. “It was very stressful.”
Eventually, she found a much larger child-care center that could take her boys beginning in June, though at a steeper rate. She had been paying about $280 per week, total, to cover both kids at Zasty’s. At the new facility, their combined tuition is $376 each week, more than 30 percent higher.
Steinhoff also has a baby on the way, due in mid-November, whom she had planned to enroll at Zasty’s. That’s no longer an option.
Enrolling the baby at the new child-care center would be an additional $250 per week — if Steinhoff could successfully secure a slot. She can’t. When she asked, back in June, about enrolling her coming baby, she was told the center wouldn’t have another opening until next June at the earliest. Nowhere else nearby can take all three kids any earlier, either, a reflection of how much care capacity has already been lost in her area.
Steinhoff had planned to take eight weeks’ unpaid maternity leave from her job at a dental practice and then return to work full-time in January. She finds her job as a dental assistant rewarding and loves her colleagues, but, more importantly, her family needs the income. Without care for the baby, that plan became impossible. Her family discussed their remaining options.
She could leave her job to care for the baby until June and hope that her bosses would hire her back. But without her wages, how would they pay for the two older kids’ day care?
She could leave, take the two older children out of day care and care for all three herself. But she would then forfeit the older kids’ slots, and they’d be back on waiting lists themselves when the baby finally got into care.
“I’m stuck either way,” Steinhoff said.
She ultimately came up with a proposal. She would work part time for the first half of next year, splitting the baby’s care with her husband, who could rearrange his schedule running a restaurant to take on the rest of the hours. It would leave little room for error and result in significantly less income at precisely the moment their household expenses were surging. But it was the only way to hold on to child-care slots for all three kids so that both parents could return to work full time. Which their household bills demand they do.
Steinhoff approached her bosses with this proposal.
A business short of staff
Michelle Hacht, the office manager at Steinhoff’s dental practice, was frustrated by the situation but understanding. She’s a mom — and now grandma to a toddler — so she’s familiar with the challenges and costs of arranging child care.
“It’s a real struggle, especially in a smaller town like we are,” Hacht said.
She got to work calculating the impact to the firm of losing half of Steinhoff’s hours.
“For Abby’s case, you know, the doctor normally has, say, 40 patients in a day. But now because she only has one assistant, she can only have 20 patients in a day,” Hacht said. “That’s a huge cost.”
Not to mention that the practice was already down one dental assistant — and for nearly identical reasons. The employee had been unable to find child care for a newborn, despite joining multiple waitlists during her pregnancy. She ended up quitting her job to become a full-time parent.
That was more than a year ago, and the practice has still not found a replacement. Meanwhile, Hacht said, patient demand has been so strong that she’s booking appointments several months out.
Hacht oversees everything from human resources to marketing to bookkeeping. (“I do everything except for playing in people’s mouths,” she said.) Now, she’s performing the role of puzzlemaster, too, trying to reconfigure schedules and training sessions so that all her employees’ availabilities match up and patients get the care and attention they need.
Part of the challenge is that Steinhoff works on the practice’s more specialized procedures. Other available dental assistants on staff do more general dentistry, so they can’t easily cover for Steinhoff without significant additional training — which Steinhoff has also been helping out with in the weeks before giving birth, while managing her own usual workload.
But even if the other assistants get sufficiently trained to compensate for Steinhoff’s reduced hours, that still leaves gaps in the schedule for the general dentistry work. Hacht’s solution? She’s training the front-of-the-office scheduler to become a dental assistant. Of course, doing so adds an additional cost in the short term and means the firm must find a new receptionist.
Hacht thinks it will all work out eventually and said that her primary goal is to keep employees happy so that they stay. (“It’s not easy to get great people,” she said. “We have to keep the ones we have.”) But the training, rearranging and new hiring still impose significant expenses on a relatively tiny business — costs that might remain invisible to policymakers or voters evaluating the impact of a child-care shortage.
The cost of defunding child care
A version of these events is playing out all over Wisconsin, and all over America.
In Madison, Dave Heide, a chef and restaurateur, has had three valuable employees (a chef, an assistant manager and a server) need to go part time because of child-care shortages. One saw their longtime provider close; the others were unable to afford steep tuition increases after those public grants were cut in half.
In Seneca, S.C., Rachael Pifer had to quit her job as a high school math teacher just weeks before the semester began because the only child care still available for her three children would consume her entire paycheck.
“Unfortunately, with the costs of child care and the income teachers make, it just doesn’t work,” she said.
These stories are not unusual, nor even new. But, after a reprieve for many providers and families during the pandemic, they are likely to become more common. Even states that have successfully cobbled together some money to keep a more modest version of the federal child-care grants going a little longer — Wisconsin among them — have been unable to plug the hole created when the federal program expired.
President Biden last month asked Congress for $16 billion in emergency child-care stabilization funds to prevent the entire industry from collapsing. So far, the Republican-controlled House has ignored the request.
It’s a lot to ask for, I suppose. But when you fully account for the invisible downstream costs of not spending it, it starts to look a little more like a bargain.