Michigan helps families with child care costs less than almost any state.
Leaders from across Michigan have been meeting for six months in search of solutions to the complex policy issue, increasingly acknowledged to be an educational and economic drag on the state.
The group, hosted by the Grand Rapids Chamber of Commerce and made up of business, political and education leaders, hasn’t coalesced around a single fix, but several members told Bridge Magazine they anticipate some policy reforms in 2020.
Those efforts, according to members of the group, could range from boosting the income caps to allow more families to qualify for child care subsidies, to increasing the payments to providers, to public-private partnerships to assist workers find affordable, high-quality child care.
“At a time of divided government, this is an example of something that can be accomplished, even in an election year,” said group member Brian Calley, former lieutenant governor under Rick Snyder and current president of the Small Business Association of Michigan.
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The staggering cost of child care is one of the biggest economic burdens facing Michigan families. The cost can delay home ownership, force children into cheaper, lower-quality child care, and keep some parents out of the workforce as the expenses can neutralize job earnings, according to a 2016 report for the Michigan Department of Education on child care access and affordability.
Child care for an infant or toddler can cost upward of $300 a week at a high-quality center. Four years of child care can cost Michigan families as much as tuition at the University of Michigan.
Those costs also hobble businesses looking to attract or retain workers for low- or moderate-pay jobs.
“We’ve known for a long time that child care access and affordability are a barrier to entrance to the workforce,” said Alexa Kramer, director of government affairs at the Grand Rapids chamber. Addressing those issues “is a great attraction and retention tool.”
Michigan lags most states in helping families afford child care.
Families must have a household income below 130 percent of the federal poverty line to qualify for child care assistance, which equates to $27,729 a year. A couple both earning minimum wage at full-time jobs would earn too much to qualify; one bread-earner would need to make under $13.33 an hour to qualify.
Only five states have lower income eligibility limits for child care assistance. Indiana at 124 percent of the federal poverty line and Ohio at 127 percent are two of them. Four states (Vermont, Alaska, Maine and Maryland) help pay child care costs of families earning more than double the Michigan aid cutoff.
And those who do qualify for subsidies often have trouble finding child care openings, because the state doesn’t reimburse providers at a rate that makes it worthwhile for their bottom lines, said Dawn Bell, director of the Early Childhood Investment Corp., a Michigan-based nonprofit that advocates on early childhood issues.
The average U.S. child care worker earned $23,760 in 2017. Ads for child care workers in the Lansing area offer salaries as low as $9.65 an hour, similar or less than what’s earned at fast-food restaurants.
“We know individuals who are working to get onto waiting lists before they are even pregnant,” Bell said. “We know parents who are falling through the cracks because they earn just too much to get into a program, or the supply is so low, they feel like they won the lottery when they get a spot.
“What we need in 2020 is a big conversation and bold action on child care,” Bell said. “But this is not an issue we can solve by waving a magic wand. The solutions are complex.”
Indeed, the five consortium members who spoke to Bridge offered a variety of policy overhauls.
Talent 2025, a West Michigan-based business coalition focused on finding and developing talent, has been advocating for more investment in child care for several years, and is a member of the child care consortium led by the Grand Rapids Chamber. President Kevin Stotts said the group wants the state to increase funding so that more families qualify for child care subsidies.
Bell warned that increasing the income eligibility cap without also boosting provider pay will only increase waiting lists for care. Increase provider pay would mean additional tax dollars.
But public money alone isn’t going to solve the issue, said Rep. Greg VanWoerkom, R-Norton Shores, who is a member of the child care consortium.
“A lot of this is a funding issue, but we have to find additional dollars[(beyond state funding],” Van Woerkom said. “From our perspective, we see this as a workforce development issue. I know a lot of employers who want to help their employees, who see this as a barrier to entry, who’d be willing to help [with funding]. It’s a matter of finding a mechanism to do that.”
Former Lt. Gov. Calley and Kramer of the Grand Rapids Chamber said the consortium hopes to work with Republican legislative leaders and Democrat Gov. Gretchen Whitmer to create a pilot child care program funded by dollars from the state, businesses and families.
Group members “have rallied behind the idea of tri-share program to address accessibility and affordability,” Kramer said.
With a push from business leaders and a rise in new, young legislators – many of whom have backgrounds in education – the “stars have aligned” for meaningful child care reform, Kramer said.
“This is a topic that no matter where you are on the political spectrum, you know it’s an issue worth solving,” Kramer said. “It’s very bipartisan.”
“I’m optimistic,” Talent 2025’s Stotts said. “Last year, we didn’t make progress because of all the competing issues. But it seems as though more and more Republicans, and those in leadership in both parties, see the challenges of child care, both the cost of child care and lack of availability in urban areas and rural areas.”
Rep. VanWoerkom agreed. “I think this is going to be an issue we’re going to talk a lot about this year,” he said.