3.2. Dependent Care Challenges

Dependent care services are often in short supply [78], expensive and out of reach for working families and caregivers. Dependent care professionals, including child care workers and personal care aides, have a difficult time in making ends meet and staying in the profession, mainly due to poverty-level wages and the high demands of such occupations. Dependent care providers, in turn, operate with thin margins and face many challenges in staying open, mainly due to the high operational costs associated with staff salaries and compliance with rigorous regulations, including unfunded mandates. The sections below offer an overview of the main challenges West Virginia dependent care providers face to stay in business.

Child Care Providers

The conventional business model used by child care businesses is unsustainable. Child care providers often break even financially or operate at a loss (or on razor thin margins), and in highly regulated industries. Providers have difficulties staying in business largely due to high operational costs, artificially depressed fees, insufficient reimbursement rates and challenges in attracting and retaining workers. Salaries are the number one expense driving the cost of services and account for between 56 percent and 68 percent of child care program expenses [79]. Expenses related to compliance with regulatory requirements are the second key drivers of child care costs [80].

Child care providers are usually women-owned small businesses and staffed by a diverse workforce that is 93 percent female – 45.3 percent of workers are Asian, Black or Latino [81]. Child care workers make approximately $20,000 a year with no job-based benefits [82]. In the U.S., only about 15 percent of child care workers have health insurance through their employers and 9.6 percent are covered by an employer-sponsored pension plan [83]. Low wages partially explain the high turnover rates in the field as well as high poverty rates and economic insecurity among child care workers [84]. According to the Economic Policy Institute (2015), 36.7 percent of child care workers live in families with incomes below twice the poverty level, in contrast with 21.1 percent of workers in other occupations. High turnover rates also increase the cost of services, due to the constant need of hiring and training new employees.

Another challenge faced by child care providers that impacts staff retention is the special care required by Neonatal Abstinence Syndrome (NAS) babies. Although the staff-child ratios in West Virginia, or the number of children a qualified staff or substitute is permitted to supervise, are in line with most neighboring states [85], the state regulatory agency fails to consider the effect of NAS babies on such ratios. NAS babies usually require a one-to-one ratio because they need extensive care almost continually [86]. Furthermore, caring for NAS babies requires specialized training, which is often out of reach for child care workers. According to a provider in Hardy County, the center is not able to send their employees to either Charleston or Morgantown to get such training because they do not have enough staff to cover absences. These factors contribute to increased stress in the profession and the ensuing high staff turnover, which is already in short supply.

In spite of that, according to the Bureau of Labor Statistics, employment of child care center and preschool directors is projected to grow 7 percent from 2018 to 2028, faster than the average for all occupations [87]. Although these employment projections reflect pre-COVID-19 figures, it is reasonable to infer that once the labor market stabilizes, demand for such professionals should increase. In actuality, employment rates will not rebound unless workers have access to dependent care services. 

The Cost of Child Care in West Virginia

Even though what providers charge is usually not enough to cover the true cost of providing care to infants, toddlers and preschoolers, paying for child care is often out of reach for working families [88]. Child care providers are not able to charge higher service fees due to families’ inability to pay. Providers instead charge what families can afford and what the local market can support [89]. Annual child care costs are higher than the average annual costs of in-state college tuition in 33 states and Washington D.C., including West Virginia – it surpasses 7 percent of an annual household income, which is the U.S. Department Health and Human Services definition of affordable child care [90]. Figure 1 shows the estimated cost of child care for each state and D.C. as a percentage of median household income. The map is subdivided in five percentage brackets. According to New America’s Care Index, West Virginia and Mississippi have the highest child care costs. 

Figure 1. Cost of Care as Percentage of Median Household Income [91]

 

See Figure 1a for a breakdown of this map in list format.

Several groups have attempted to put together accurate estimates of how much West Virginia families pay, on average, for child care. According to Child Care Aware (2019), the annual cost of center-based infant care in the Mountain State is $8,029, whereas fa milies that rely on family child care homes [92] pay on average $6,159 [93] . Based on their calculations, married parents of two children living at the poverty line need to allocate 59.6 percent of their household income to pay for center-based child care, assuming that they are able to find a nearby provider and secure slots for their children [94] .

The Economic Policy Institute (2019), in turn, estimates that the cost of infant care in West Virginia is $8,736 per year, $1,117 more than the annual in-state tuition for four-year public college [95]. According to EPI’s assessment, a minimum wage worker would need to work from January until June just to pay for child care for one infant, which amounts to approximately 48 percent of their income [96].

According to the Center for American Progress (2018), working parents who would like to enroll their infants in center-based child care programs that meet higher quality standards would need to spend $1,960 per month, or $23,520 per year, to pay for such services [97]. Programs that meet the minimum licensing standards cost families roughly $14,760 per year [98]. Based on RegionTrack (2019) estimates, the cost of center-based infant care in West Virginia is $8,528 per year, whereas the cost of family home-based child care is $6,663 [99]. If we consider the state’s median household income ($44,921 as of 2018 [100]), a family would need to allocate about 20 percent of their annual income just to pay for center-base infant care for one child. Nevertheless, most families – especially single parents – do not make nearly that much money.