6 ways to help working parents in Michigan afford child care
On a recent weekday morning, a group of toddlers squealed and chased after soap bubbles in their classroom at a daycare center on the campus of Jackson National Life Insurance Co., near Lansing.
Down the hall, older children worked on identifying the date on a calendar. In one room, toddlers watched their teacher scoop out the slimy insides of a pumpkin and spread them on a tray. In another, kids attempted to act out a play with hand puppets.
Just up the road, many of their parents were settling into a workday at Jackson’s corporate headquarters. The company has offered child care in a standalone building on its main campus and discounted tuition as an employee benefit since the company consolidated its Lansing workforce 17 years ago.
Today, 94 children are enrolled at Jackson’s child development center — operated by Portland, Ore.-based chain KinderCare Education LLC — on a daily basis, according to the company. Nearly 63 percent of them are children of Jackson employees.
Opening a daycare center on a corporate campus is one way some Michigan companies are addressing what they say is a barrier to attracting and keeping good employees: Access to affordable child care.
The private sector is mobilizing on the issue in large part because more companies are viewing child care as a means to keep valuable workers who are more productive and less likely to miss work because they can’t find someone to take care of their kids. Companies that provide child care also say it’s something they can put on the table when recruiting prospective employees, especially younger ones. At the same time, research suggests that providing high-quality child care at younger ages helps improve children’s readiness for school.
Yet child care is often inaccessible to parents, often due to availability (many centers have wait lists) or cost.
The Michigan Association of United Ways, in a 2017 study of the state’s working poor — referred to as “ALICE,” for “asset-limited, income-constrained but employed” — estimated the bare-minimum cost of childcare in 2015 for a two-parent family with an infant and a preschooler was $1,108 per month. Full-time care for an infant in Michigan can cost nearly $10,000 per year on average, according to the Economic Policy Institute.
As many as 40 percent of Michigan’s 3.8 million households don’t earn enough to cover basic necessities, the ALICE study found. At the same time, Michigan business groups have complained for years that they are unable to fill skilled positions in the state.
“If you would have told me five years ago that we would be focused on the issues of child care, transportation and housing, I don’t think I would have believed you,” said Rob Fowler, president and CEO of the Small Business Association of Michigan, a trade group that represents more than 25,000 businesses across the state.
The Grand Rapids Area Chamber of Commerce will host a legislative panel discussion on the topic Monday, in conjunction with Talent 2025, a West Michigan-based business coalition focused on talent development, attraction and retention strategies.
Their goal: Energize business leaders around this issue, catch the attention of policymakers in Lansing and move the needle on collaborative solutions.
“If we get this right, we can do a better job of attracting and retaining the talent that our employers need, and parents benefit a whole lot when they have good places for their kids,” said Andy Johnston, vice president of government and corporate affairs for the Grand Rapids chamber.
“We don’t want to just have a nice meeting,” Johnston said. “One of the things we need to do is rally the business community around it, because there hasn’t been as strong of advocacy on this.”
Katharine Stevens, resident scholar at the American Enterprise Institute ‒ a nonpartisan public policy think tank in Washington ‒ wrote a report in June for the U.S. Chamber of Commerce Foundation that offered business leaders suggested ways to promote the need for high-quality child care.
Stevens, whose project was funded by the W.K. Kellogg Foundation, is scheduled to speak at the Grand Rapids chamber’s event. What follows are some suggestions for helping working parents afford high-quality child care.
Three things employers can do
1. Make child care a business priority
In her report, Stevens encourages business leaders to form coalitions around increasing access to child care, list child care as a legislative priority and pen op-eds as part of an organized media campaign to drum up public financial support and get more businesses engaged in the cause.
“It’s not something the business community can solve alone,” said Stevens, adding that corporate leaders as a group can play a powerful role in helping states rethink how they spend taxpayer dollars geared toward children.
“Bringing that kind of strategic thinking — identifying what’s critical and thinking about how to allocate scarce resources — is something that the business community is really well-suited to do,” she said.
2. Donate money
Companies can direct their philanthropic efforts toward child care in their communities — everything from donating books and materials to contributing to tuition scholarship programs, Stevens said.
Ready for School, a data-driven community initiative that focuses on improving early childhood outcomes in parts of Ottawa and Allegan counties, created a financial aid program for tuition-based programs.
Since 2011, more than $1.2 million has been invested into preschool scholarships — mostly from individuals and small family foundations, but also from corporations — in Holland and Zeeland in Ottawa County and Hamilton in Allegan County, said Donna Lowry, president and CEO of Ready for School. Average scholarships are about $500 per semester, or $1,000 a year, Lowry said.
3. Start a child care center on the corporate campus
It’s an expensive undertaking, but Stevens calls it leading by example in her report.
At Jackson National Life, the idea behind the child care center was to create a company culture that promotes work-life balance, said Dana Rapier, a vice president in the office of the chief operating officer and interim chief human resources officer at Jackson.
“It’s trying to reduce the stress so that when workers come to work, they are happy, they’re engaged,” said Rapier, who said Jackson uses onsite child care as a recruiting tool. “Business has an opportunity to figure that out.”
Onsite child care has worked so well for Detroit businessman Dan Gilbert’s employees at Quicken Loans Inc., that Gilbert’s family of companies is considering expanding not only the existing daycare center on the second floor of the former Compuware Corp. headquarters building downtown, but also to other Gilbert-owned developments in the city, said Andrew Leber, vice president of hospitality for real estate arm Bedrock LLC.
Bedrock inherited the child care center operated by Watertown, Mass.-based chain Bright Horizons Family Solutions when it and Detroit-based Meridian Health bought the building, now dubbed One Campus Martius, in 2014.
“We find that that’s going to be an incredible offering to attract not only great tenants, but also to offer an amenity to our team,” Leber said. “If we can help you in that fashion, I think that’s a partnership that an employer and an employee see (as) valuable.”
Neither Jackson nor Bedrock would disclose how much they spend on their facilities.
Three things Lansing can do
State Sen. Peter MacGregor, R-Rockford, will be a panelist during the Grand Rapids chamber’s event. He said he is open to discussing the issue in Lansing, though he is still learning about possible solutions on how the state can, or should, help.
“I’m sure there’s going to be policy proposed. I’m sure there’s going to be appropriations needed,” MacGregor said. “It’s a learning process for me, too.”
1. Make more families eligible for child care subsidies.
Michigan subsidizes child care for its poorest families, but the program — known as Child Development and Care, or CDC — has some of the tightest income requirements in the nation, leaving many lower-income families unable to qualify for aid.
“When employees earn just a little bit more money, they’re falling off this cliff” of being able to qualify for the subsidy, said Nancy Lindman, public policy director for the Michigan Association of United Ways, which published the ALICE report.
“There’s a real opportunity for us in Michigan to do better in terms of our child care subsidies,” Lindman said. “It would stabilize ALICE households in the workforce.”
2. Increase the reimbursement rate to child care providers
Michigan also is close to last among states in the amount it reimburses child care providers for care, based on a child’s age.
Most of the costs to run a center-based child care facility are related to staff, said Stephen Kramer, president of Bright Horizons, which operates child care centers across the U.S. and in a few other countries. A shortage of infant care, he said, is partly based on this problem because more employees are required to care for babies on a per-child basis than are needed for, say, 3-year-olds.
“We have always believed that in order to make that affordable to families, there needs to be a third-party support,” Kramer said. “That can come through government, that can come through employers, but the idea that a family can pay the full amount of tuition is a lot for families.”
3. Streamline regulation
Multiple state agencies are tasked with regulating some aspects of child care, said Kevin Stotts, president of Grand Rapids-based coalition Talent 2025.
The application process could be simpler for families to qualify for the state subsidy program, he said. Steps also could be taken to simplify the regulatory process for providers, though Stotts did not yet have specific ideas about how.
Licensing requirements and other regulations appear to have created a supply and demand problem in accessing child care, said Fowler, of SBAM.
“Have we tightened it down so much that it isn’t a workable business model?” he said. “At some point, you have to be able to make money as a child care provider or nobody’s going to do it. That’s what needs to be looked at.”
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