New Jersey has long had a high-quality preschool program. In 2019-2020, New Jersey preschool programs enrolled more than 55,000 children.1 While universal preschool for 3- and 4-year-old children started in 31 Abbott districts, 211 school districts from Absecon in Atlantic County to Washington Borough in Warren County now offer preschool.2
This has been great for the school readiness of young children and state evaluations show lasting results through 10th grade (with greater results for children who were in preschool for two years compared to one year).3
At the same time, what once started with a true mixed-delivery model where community-based child care providers, Head Start programs, and public schools shared the responsibility of expanding a high-quality preschool program in 31 school districts has now morphed to largely a preschool program delivered by public schools in many communities.
What this has meant for the parents of infants and toddlers is extraordinarily high prices for child care as community-based programs no longer had 3- and 4-year old children to cross-subsidize the cost of the business model (i.e., it is more expensive to operate infant and toddler care and, therefore, the larger number of preschool-age children who can be in a classroom helps offset the cost of infant and toddler care). Other birth-to-five community-based programs simply closed.
As more school districts have received preschool funding, community-based child care has been impacted. Child care is a business. What makes the business model work is the enrollment of preschool-age children, which offsets the costs of the comparatively higher number of personnel needed to care for infants and toddlers. The staff:child ratios make sense for both safety and early childhood development (e.g., New Jersey’s rules require 1:3 staff/child ratios for infants, 1:10 staff/child ratios for 3-year-old children and 1:12 staff/child ratios for 4-year-old children).4 Because personnel costs are the largest component of child care budgets, it’s easy to see how the removal of 3- and 4-year old children from the business model impacts the economic viability (and cost) of operating a program without preschool-age children.
In New Jersey, 419,062 children under age 6 had working parents (pre-COVID).5 This included 201,607 infants and toddlers with working parents.6 What is known about the current employment situation in New Jersey is that we are on the journey to economic recovery, but it could be a long road. Unemployment is far lower now than it was in the spring of 2020.7 However, at 7.1%, New Jersey’s unemployment rate is still higher than the national average and far higher than 4.1% - the unemployment rate in New Jersey for January of 2020. More than 470,000 individuals have either left the workforce or are currently unemployed.8 For women with young children, a disproportionate share left the workforce to care for children. For example, the Census Bureau Household Pulse survey reflecting September 15-27, 2021 shows that 201,628 parents are not working because they are home caring for children not in school or child care.9 The reality is that investments are needed in both child care and preschool to ensure that parents with young children have access to both.
Many child care programs have struggled over the past 20 months during the public health pandemic. Child enrollment declined as public schools closed, parents stayed home with children, and parents lost jobs or had their hours reduced. Congress and the New Jersey Department of Human Services, Division of Family Development (DFD), offered grants to child care providers to help stabilize the market so that parents who need child care in order to work would still have access to it.
But, then the newest round of preschool expansion grants to school districts occurred. What happened in many cases was that public schools opened new preschool classrooms and child care programs who depended on the enrollment of 3- and 4-year old children for economic viability again were threatened.
One provider in Monmouth County has capacity for 190 children. Prior to the pandemic, she was completely full- in fact, had waiting lists for care. While she never closed during COVID, her enrollment plummeted. Currently, she has 80 children plus another 15 school-age children. What she didn’t anticipate was the exodus of 30 children in September to local elementary school preschool classrooms.
She told us, "I have a high-quality program, I’ve been meeting the needs of working families with young children for nearly 20 years and have worked hard to meet the needs of essential personnel when NJ was in a state of emergency. And, now, I’ve just written to Governor Murphy to tell him that it shouldn’t be that one state agency works to stabilize the child care market and another state agency works to undermine it. It’s just not right."
Pre-COVID, child care in New Jersey had a $4.1 billion economic impact with a jobs impact of more than 67,000 (50,283 within the child care market and an additional 16,815 spillover employment in other industries).10 Plus, the economic impact of supporting the ability of parents statewide to work.
Preschool expansion doesn’t need to devastate the local child care market. It doesn’t have to pit the needs of one set of children against another (e.g., 3- and 4-year old children against infants and toddlers). It need not pit one set of parents against another (e.g., parents who work outside the home against those who work within the home).
We are fortunate to have many high-quality child care programs in New Jersey that could offer preschool classrooms. What is needed is state leadership to ensure coordination between the agency in charge of preschool (the NJ Department of Education) and the agency in charge of child care (the NJ Department of Human Services).
We offer several common sense solutions:
It is possible to expand preschool to meet the developmental needs of children and also the needs of working parents. But, not without community collaboration. Let’s roll up our sleeves and begin the discussion. Real mixed-delivery preschool depends on it.
1National Institute for Early Education Research, the State of Preschool 2020, 2021. https://nieer.org/wp-content/uploads/2021/08/YB2020_Full_Report_080521.pdf
2 New Jersey Department of Education, 2021-2022 New Jersey State-Funded District Preschool Programs. https://www.nj.gov/education/ece/psguide/2021-2022%20New%20Jersey%20State%20Funded%20District%20Preschool%20Programs.xlsx
3 Early Childhood Research Quarterly, New Jersey's Abbott preschool program on children's achievement, grade retention, and special education through tenth grade, 2021. https://www.sciencedirect.com/science/article/abs/pii/S0885200621000478
4 New Jersey FY2022-2024 CCDF State Plan. https://www.childcarenj.gov/getattachment/Resources/Reports/stplan_pdf_2022_NJ.pdf?lang=en-US
5 U.S. Census Bureau, Table B23008, Age of Own Children Under 18 Years in Families and Subfamilies by Living Arrangements by Employment Status of Parents, 2019 American Community Survey, 1 Year Estimates. https://data.census.gov/cedsci/table?q=b23008&g=0400000US34&tid=ACSDT1Y2019.B23008&hidePreview=true
6 U.S. Census Bureau, Public Use Microdata, 2019 American Community Survey, 1 Year Estimates. https://data.census.gov/mdat/#/search?ds=ACSPUMS1Y2019&vv=AGEP&cv=ucgid,AGEP_RC1&rv=ESP&wt=PWGTP&g=0400000US34&AGEP_RC1=%7B%22S%22%3A%22Age%20recode%22%2C%22R%22%3A%22AGEP%22%2C%22W%22%3A%22PWGTP%22%2C%22V%22%3A%5B%5B%223%3A99%22%2C%22Not%20Elsewhere%20Classified%22%2C%22X%22%5D%2C%5B%221%3A2%2C00%22%2C%22Infants%20and%20Toddlers%22%5D%5D%7D
7 U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics, New Jersey. https://data.bls.gov/timeseries/LASST340000000000003?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true
9 U.S. Census Bureau, Household Pulse Survey, September 15-27, 2021. Table 3. Educational Attainment for Adults Not Working at Time of Survey, by Main Reason for Not Working and Source Used to Meet Spending Needs. https://www2.census.gov/programs-surveys/demo/tables/hhp/2021/wk38/employ3_week38.xlsx
10 Committee for Economic Development, Child Care in State Economies: 2019 Update. https://www.ced.org/assets/reports/childcareimpact/infographics/revised/New%20Jersey%20Econ%20Impact%20Infographic%201312019.pdf
It's time to talk about the workforce that supports all other workforces: the individuals working in child care (either in child care centers or in home-based child care programs). Throughout the country and also throughout New Jersey, economists are writing about a labor shortage, a tight market where employers face difficulties in hiring employees.1,2
The reasons employers face hiring challenges are complicated. However, as a result, many employers have increased their hourly wages and are offering benefits. For example, ZipRecruiter.Com reports, Walmart in Trenton is paying $15.83 per hour for sales associates.3 Starting pay for Amazon delivery associates in Jersey City begins at $18.50 per hour and includes health insurance and paid time off.4 Amazon delivery warehouse team members in Edison start at $18.75, plus receive a $1,000 signing bonus and an extra $100 on the spot for proof of COVID vaccination.5 And, Panera cashiers statewide receive food discounts, health benefits, 401(k) company match, and paid vacations.6 What's all this have to do with child care? Everything.
The most recent hourly wage data from the U.S. Bureau of Labor Statistics shows that the median wage for child care workers in New Jersey is $13.37 per hour. 7
Child care is a business. For many programs, private-pay parent fees and subsidies paid by the state for low income parents comprise the budget. The largest expense for a child care business is related to personnel costs, which comprise 70-80% of the overall cost of a child care program.8 The remainder of funds are used to pay for fixed costs such as rent or mortgage, utilities, regular maintenance, insurance, food, materials, and other operating costs. Therefore, when wages within community businesses rise, child care programs can't compete. They simply can't pay more because to do so, they would have to charge parents more. Yet, parents already struggle with affording child care. It's just one reason why public education is just that, paid for by the public.
Local jobs paying $15-$18 per hour require employees to be courteous, efficient, and show up reliably to perform job tasks. They don't require specialized training in early childhood development. And, they don't charge these individuals with promoting the safety and healthy development of young children. Child care employers want to hire and retain a qualified workforce. But, unless they can pay more competitive wages, individuals who otherwise want to work with children are lured by jobs where they can be paid more for less responsibility, stress, or training.
Really this is a market failure. The workforce that supports all other workforces is essential to economic recovery. Unless parents have access to child care, they can't go back to work. Currently, throughout the country, there are 7.5 million individuals who responded to the most recent Census Bureau Household Pulse survey (between June 23 and July 5, 2021) that they are not working because they are caring for children not in school or child care. 9 In New Jersey, more than 225,000 individuals said they were home because they were caring for children. 10 Statewide, there are more than 161,000 individuals who have left the workforce (in addition to another 321,343 individuals who are unemployed).11
The pathway to economic recovery in New Jersey relies on child care, which relies on child care workers - individuals who are more than courteous, efficient, and who reliably show up to work. They are front-line professionals who support children, parents, and employers. Child care cannot be done remotely, it is an in-person profession. As a public good that supports economic recovery and expansion, there are solutions to enable child care programs to hire and retain the qualified workforce needed to support healthy child development (and employment of parents).
One strategy to address the child care worker shortage (as well as recruitment and retention) is called the Child Care WAGE$ program, an education-based salary supplement program that has supported early childhood teachers, directors, and family child care providers since 1998 in other states.12 WAGE$ increases the compensation of the child care workforce through salary supplements based on credentials and levels of education.13 For example, in North Carolina, fifty percent of WAGE$ participants earn less than $13 per hour (47% of teachers, 96% of family child care providers, and 35% of directors).14 More than three-quarters (77%) of WAGE$ participants earn less than $15 per hour.15 Wage supplements are made in 6-month installments and reward individuals for staying on the job.16 The turnover rate for those participating in the WAGE$ program is far lower for those participating in the program than those who are not (12% vs. 21% in 2019).17
In North Carolina in FY2021, 3,089 child care professionals in nearly 1,500 child care programs in 58 counties were participating in the Child Care WAGE$ program.18 Nearly all are women (99%) and 58% reported being a person of color and/or Latinx.19 Beyond North Carolina, Florida, Iowa, Nebraska, and Tennessee are also using the WAGE$ program.
With the supplemental federal funding received by New Jersey for child care over the past year, it could be an opportunity to review the WAGE$ program to determine whether it's a good strategy for New Jersey. For too long, individuals working in child care have been undervalued and underpaid.
It's time to pay the child care workforce for the important work that they do - which is far more than being courteous, efficient, and showing up. Child care is a public good. And, it's connected to economic recovery.
Child Care WAGE$ Program ResultsThe Child Care WAGE$® Program is an evidence-informed, outcome-driven initiative designed to increase the education and retention of the early care and education workforce through increased compensation. Education-based salary supplements tied to the successful completion of commitment periods in the same child care program result in a more stable, better-educated workforce.
The Child Care WAGE$ program is an investment in economic recovery and expansion. It's a workforce investment strategy that supports the workforce supporting all other workforces. The ultimate beneficiaries are not only our children, but also parents, employers and communities. It's a common sense solution to a market failure.
1Wall Street Journal, Why It's So Hard to Fill Jobs in Certain States
2Parts of Mountain West, Plains and New England have three open positions for every unemployed person, May 29, 2021. https://www.wsj.com/articles/why-its-so-hard-to-fill-jobs-in-certain-states-11622280601 NJ 101.5, Pain, labor shortage, likely to be long term in NJ, July 29, 2021. https://nj1015.com/pain-labor-shortage-likely-to-be-long-term-in-nj/?utm_source=tsmclip&utm_medium=referral
3Walmart Sales Associate, Trenton, NJ $15.83 per hour. https://www.ziprecruiter.com/Salaries/Sales-Associate-Walmart-Salary--in-New-Jersey?utm_campaign=google_jobs_salary&utm_source=google_jobs_salary&utm_medium=organic
4Amazon Prime Delivery Associate - Jersey City, $18.50 per hour. https://www.careermatch.com/posting/bug_39047652588?context=merch
5Delivery Warehouse Team Member $1,000 Sign-on Bonus, https://www.google.com/search?q=amazon+delivery+new+jersey&sxsrf=ALeKk03y9-JOtPFl_uuUqmhr82Ff98Kjqg:1628261224342&ei=aEsNYeCqFJGHwbkPtfWoqAo&oq=ziprecruiter+cashiers+in+trenton+nj&gs_lcp=Cgdnd3Mtd2l6EAMyBQghEKsCOgcIABBHELADOgUIIRCgAUoECEEYAFDzDljqFGDuGGgBcAJ4AIABoQGIAZ4DkgEDMy4xmAEAoAEByAEEwAEB&sclient=gws-wiz&uact=5&ibp=htl;jobs&sa=X&ved=2ahUKEwjE1Yzh0ZzyAhWhRjABHfXRBcsQudcGKAJ6BAgGEC4#fpstate=tldetail&htivrt=jobs&htidocid=2I66YmkgJxWS342RAAAAAA%3D%3D
7U.S. Bureau of Labor Statistics, Occupational Employment and Wages, 39-9011 Childcare Workers. https://data.bls.gov/oes/#/occGeo/One%20occupation%20for%20multiple%20geographical%20areas
8U.S. Department of Health and Human Services, National Center on Early Childhood Quality Assurance, Guidance on Estimating and Reporting the Costs of Child Care, 2018.
9U.S. Census Bureau, Household Pulse Survey, Week 33, June 23 - July 5, 2021. Table 3. Educational Attainment for Adults Not Working at Time of Survey, by Main Reason for Not Working and Source Used to Meet Spending Needs
11U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics, New Jersey. https://data.bls.gov/pdq/SurveyOutputServlet https://data.bls.gov/timeseries/LASST340000000000003?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true
12Child Care Services Association, the Child Care WAGE$ Program. https://www.childcareservices.org/programs/wages/
14Child Care Services Association, Child Care WAGE$® Program, Statewide Final Report Fiscal Year 2021. https://www.childcareservices.org/wp-content/uploads/CCSA_WAGE_STATE_2021_Final_Full-Report.pdf