1. Introduction

Moving West Virginia's Workforce Forward: Identifying and Addressing Dependent Care Barriers and Opportunities

The dependent care industry is one of the backbones of the nation’s economy. The services provided by this industry are instrumental in allowing people to work or study while knowing that their family members and dependents are cared for. Yet, although indispensable, dependent care is an economically fragile industry [1]. Thin margins, high operational costs, inadequate reimbursement rates, inability to charge higher service fees [2], decades of persistent public underinvestment in these crucial services [3], difficulties in attracting and retaining workers due to low wages, and no benefits coupled with high demands of the work are among the reasons providers struggle to stay in business.

For years, experts and those in the child, adult and senior care industries have warned about the economic fragility of such businesses and the need to reinvent existing business models as well as create a viable and sustainable financing structure, with a mix of private and public funding streams, to help providers stay in the black. The most recent illustration of the financial vulnerability of dependent care businesses is the ongoing economic impact of the COVID-19 crisis on child care providers.

In an effort to slow down the spread of COVID-19, during the first months of the pandemic, only providers caring for children of essential workers [4] were allowed to remain open [5]. Other child care providers were required to remain closed, a decision that inadvertently may lead to the decimation of their already meager finances and, in many cases, permanent closures (See section 1.3 for a more detailed explanation). In the U.S., 50 percent of providers who participated in a National Association for the Education of Young Children (NAEYC) survey [6] reported that they would not be able to survive a closure of more than two weeks, without receiving heavy public subsidies. In West Virginia, 43 percent of respondents said they would not be able to stay in businesses if required to close for any length of time [7].

If COVID is an earthquake for child care, low enrollment once the country reopens is going to be an aftershock. The “system” isn’t strong enough to absorb either. We don’t just need a bailout for child care, we need a whole new way of funding a real, robust system [8].

The pandemic is shedding light not only on the paramount importance of dependent care services in allowing frontline health care and other essential personnel to carry out their important tasks during the crisis, but also on the significant vulnerabilities of such businesses and their finances, which were already in a precarious situation and at risk of closing doors way before the COVID-19 crisis. All in all, one of the early lessons learned from the pandemic is that it is not possible to work and be productive – both from home and outside of the home – without having access to a solid supply of dependent care services.

Additionally, many working parents, especially from low income families, solely rely on the school system for child care. With the uncertainty surrounding the reopening of schools in West Virginia this fall, it will be even more challenging for parents to join or re-enter the labor force [9]. There is a pressing need to support dependent care providers to ensure that the vital services they offer are there for the future. Most importantly, economic recovery from the pandemic will be slowed or hindered if those returning to work are not able to secure dependent care [10].

Yet, as previously mentioned, the dependent care issues outlined in this paper predate the COVID-19 crisis. In great part, these challenges prevent more than half of the state’s population from achieving full economic opportunity and financial stability [11].

With that, this paper (1) addresses the main challenges, constraints, needs and opportunities surrounding the provision of dependent care services in West Virginia, (2) provides a visual of dependent care offerings in at least three pilot regions and (3) offers policy considerations and novel business models ideas that could create an incentive for market entry, help providers stay in business or reopen amid the COVID-19 crisis, support workforce participation and offer job growth opportunities.

Since dependent care issues impact society at large, the responsibility to address such problems does not fall squarely on the shoulders of dependent care providers, working parents, caregivers, employers, organizations or the State. It is our duty to work together to collectively address the need to provide affordable and accessible dependent care services to workers with dependents and develop workable and sustainable solutions. It is also important to keep in mind that adequate business models and improved finances can potentially free dependent care providers to focus on and prioritize other important program outcomes, including improving the quality of care for children, the elderly and adults with disabilities.