Some Milwaukee County parents leaving jobs

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Editor’s note: The Legislature’s Republican-controlled Joint Finance Committee voted early morning June 16, 2023 to end funding for Child Care Counts, a program launched during the pandemic that subsidizes child care providers.

Milwaukee County parents pour a larger share of their income into child care than Americans living almost anywhere else, according to a Wisconsin Watch analysis of the National Database of Childcare Prices

The median Milwaukee County household spent 15% to 26% of their income for child care, depending on the type of service, according to the 2018 data Wisconsin Watch analyzed. That’s above the 7% benchmark the federal Department of Health and Human Services recommends.

That disproportionately forces county parents to make tough choices — such as whether to leave careers to stay home with children, risking harm to their finances and the economy.

The U.S. Department of Labor database, updated in May, contains price data by provider type, age of children and county characteristics from 2008 to 2018. When measured as the share of a family’s median income, Milwaukee County ranked among the top 10 most expensive counties for six of eight types of child care listed in the database. It cracked the top five for costly infant and preschool care.

At more than $16,000 per year, median infant care prices in Milwaukee County are higher than in 97.5% of all counties — while household incomes fall squarely in the middle, Monica Vereen, a U.S. Department of Labor spokesperson, said in an email.

Statewide, annual child care costs eclipse the average rent or college in-state tuition. 

That’s when care is available at all. 

Much of Milwaukee’s South Side is considered a “child care desert,” where only one licensed care slot exists for every three young children. More than 8,300 Milwaukee County children lack any available professional care, according to the advocacy group Wisconsin Early Childhood Action Needed, leaving a 13.3% gap between kids and available slots.

Additional child care deserts stretch across Wisconsin, where providers face a financial cliff, advocates warn.

The state’s Child Care Counts program — launched in 2020 with federal COVID-19 relief funding — kept thousands of providers open during the turbulent pandemic. But funds will run dry by January unless lawmakers intervene. 

“This is a crisis on the brink of happening,” said Ruth Schmidt, executive director of the Wisconsin Early Childhood Association. “Some would say we’ve already been in crisis.” 

Democratic Gov. Tony Evers has proposed allocating more than $340 million to Child Care Counts in his 2023-25 budget. The plan’s fate depends on negotiations with Republican lawmakers. 

The Republican-controlled Joint Finance Committee on Thursday plans to consider the Department of Children and Families’ budget, which could include child care subsidies.

Child care costs force sacrifice

Diana Rico is a married mother of four living on Milwaukee’s South Side. As her kids have grown — the oldest is in college and the youngest is 21 months — Rico has moved between jobs and school, but child care costs have sometimes required her to stay home with the kids.

Milwaukee mom Diana Rico, left, poses with family following the high school graduation of her oldest daughter, also named Diana (in graduation gown) in 2022. Also shown are Rico’s son Bryan (to her right), husband Rigo, daughter Katalina (in car seat) and daughter Sheyla. (Courtesy of Diana Rico)

“Raising kids with one income, it’s doable, but it does restrict the quality of life that we can be giving our children,” said Rico, who also serves as an Early Childhood Education Ambassador with Milwaukee Succeeds, which pushes for education equity. She said child care is so expensive that “often it’s not even worth it.”

Rico recalled paying $280 per week for care at one center.

At one point, Rico, who did not finish high school, made a promise to her oldest daughter: She would earn her equivalency degree before her daughter graduated from high school.

Rico delivered. But to cover child care costs while she studied, her husband worked more, diminishing family time. The couple also halted their daughter’s dance lessons and cut their cable subscription, Rico said.

“I was taking things away from them that they enjoyed, something that they can be themselves and build a personality outside of school,” Rico said. “The biggest one was having to take away time from my husband to spend time with us as family.”

Basic needs elusive for many Milwaukee County families

In the Milwaukee suburb of Wauwatosa, Cheyenne Pierce, a single mom and retail worker, lived in perpetual calculation mode as she juggled tasks and stuck to tight budgets. “It adds so much stress to someone’s life when they have to think that way constantly,” she said.

Many Milwaukee County families struggle to meet broader basic needs, with 17% earning less than the poverty level, according to 2021 data from United for ALICE, a research and advocacy program managed by United Way of New Jersey. That’s compared to 11% statewide.

Meanwhile, 27% of Milwaukee County families — and 23% of families statewide — live above the poverty level yet can’t afford basic costs. That is called the ALICE threshold, which stands for “Asset Limited, Income Constrained, Employed.” Those residents typically earn too much to qualify for traditional state aid.

Families of color in Milwaukee County disproportionately fall below the ALICE threshold, as do nearly three in four single mothers and nearly half of single fathers in the county.   

Low wages push child care workers from industry

Child care providers and educators also struggle to make ends meet, leaving centers statewide hard-pressed to retain workers.  

Constrained by razor thin profit margins and broken economics, Milwaukee providers pay teachers only $13 an hour on average, below the county’s living wage for one adult with no children. Few centers offer benefits, and nearly half of workers receive public food or health assistance, according to the University of Wisconsin-Madison Institute for Research on Poverty.

The median Wisconsin child care worker must spend 59% of their earnings to put their own child in infant care, the Economic Policy Institute found

But pricey tuition and low wages don’t translate into big profits for providers. That’s because they must maintain low staff-to-child ratios to meet safety requirements — spreading revenue across many workers.

Briana Stanford, a South Side Milwaukee mother of two, said she earned too little as a child care provider to live, even with government aid. She left her job and now stays home with her children.

“Pulling myself from the workforce was probably the hardest thing I’ve ever done,” she said. “I like to make my own money, and I like to work.”

Toshiba Adams is an adjunct professor at UW-Milwaukee and chairs Milwaukee Area Technical College’s child development program. She couldn’t afford quality child care when her son was born in 1997. So she and her mother started a center on Milwaukee’s Northwest Side. But she couldn’t survive on her low salary, prompting her to dissolve the business in 2006 and move into a full-time role at MATC.

Yimma Davila-Castro, owner of Yimma’s Bright Beginnings Daycare on Milwaukee’s South Side, says her salary is “whatever is left over” after she pays the center’s bills.

“Which is, many times, not that much,” Davila-Castro said.

Child care staffing shortages persist 

Two-thirds of Wisconsin early childhood educators surveyed last December by the National Association for the Education of Young Children reported staffing shortages. Nearly a third considered leaving their job or closing their child care home. The top thing that would prompt them to stay: competitive wages.

“You go to work at McDonalds, name any restaurant, you’re going to get paid more than we can pay,” Davila-Castro said.

Milwaukee mother and journalist Ashley Smart sees the staffing turnover first hand as her daughter’s favorite teachers come and go.

“We showed up one day, and there were all these new people,” Smart said. “We were like, we don’t know who these people are.”

The Wisconsin Policy Forum found that centers paying higher salaries tend to receive higher ratings on YoungStar, Wisconsin’s five-star rating system for providers.

But in deeply segregated Milwaukee, many providers in predominantly Black and brown communities are stuck at two- or three-star ratings because they lack equitable access to money, Adams said. 

“Children are suffering,” she added. “A lot of people are suffering based on these inequitable structures.”

Wisconsin child care funding: an unbalanced stool 

Investing in child care pays off in the long run, a range of studies show

University of Chicago and University of Southern California researchers, for instance, found that high quality early childhood programs can deliver annual returns of 13% per child on upfront costs when considering outcomes in education, health, employment and behavior. 

But, Adams said: “You can’t run a high-quality program without high-quality money.”

Schmidt of the Wisconsin Early Childhood Association calls for a “three-legged stool” approach to investment that includes contributions from government, businesses and parents. 

“Right now it’s one leg, it’s parents,” Schmidt said. “It’s just going to fumble, it’s going to teeter, it’s not going to be solid.”

Outside of the child care industry, some businesses offer employees stipends or flexible spending accounts, allowing them to withhold pre-tax dollars for child care expenses. Some pay child care centers a stipend for priority access to care slots. Additionally, the Wisconsin Department of Children and Families’ “Partner Up!” grants help businesses cover costs associated with supporting employee child care needs.

But the third leg of the stool, government funding, remains key to stabilizing the industry, advocates say.

Legislature weighs Child Care Counts funding

As Wisconsin’s child care sector suffered during the pandemic, advocates viewed the Child Care Counts launch as an acknowledgement of the industry’s importance to the economy and  wellbeing.

Stabilization payments totaling nearly $379 million have helped 3,300 statewide providers remain open, preserving 22,000 child care jobs, the Wisconsin DCF estimates

The funding allowed Davila-Castro to give bonuses to her teachers, cover utilities and provide financial relief to her customers. She also purchased high-quality teaching materials, which she said helped boost the firm’s YoungStar rating to five stars.

More than a quarter of Wisconsin providers said they would have closed without the grants, survey data show, and 60% expected to raise tuition if stabilization payments end. 

Evers’ $340 million Child Care Counts funding proposal survived an early Republican culling of 500-plus budget items. And it could move closer to law during Thursday’s Joint Finance Committee meeting.  

“We need revenue coming into our child care industry,” Schmidt said. “Without it, they will have to raise their rates. And that is going to hit working families.”

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