July 1, 1998
Foreword
Recognizing the critical importance of access to affordable, quality child care, the Austin City Council passed a resolution on February 26, 1998 directing the Austin Child Care Council to develop short- and long-term recommendations to improve the affordability and accessibility of quality child care in Austin. The Child Care Council was further charged with consideringthe appropriate role for municipal government as a strategic partner, employer and developer of public policy.
To carry out the charge, the Austin Child Care Council formed the Affordability/Accessibility Task Force, a small workgroup of Child Care Council members, parents, and community members. The Affordability/Accessibility Task Force researched what other communities have done to address the need for affordable child care that meets the needs of children and families.
Several strategies were used to gather information from parents, child care teachers, center directors, and community members about their needs and solutions. Survey instruments were developed and distributed widely. At the time of this report, approximately 350 parents and 270 child care teachers and directors have provided input regarding their needs and ideas. A public hearing was conducted on April 29, 1998. Information was presented and input requested from the Community Action Network and Austin Employers Collaborative.
Following this research, the Affordability/Accessibility Task Force participated in a two-day facilitated work session with multiple follow-up sessions to generate recommended solutions. The following report and recommendations are the product of this process.
Thanks go to those citizens who offered insights and recommended solutions and to each person who participated on this Task Force spending long hours collecting and analyzing information, researching options and drafting the report. I would like to offer special thanks to the following individuals: Susan Millea who played a major role in drafting the final report, Sue Welch who collected and analyzed the survey data, Dr. Elizabeth Morgan, Jill McRae, Gale Spear, Dr. Patricia Koch, Ronya Kozmetsky and Linda Welsh for their work on the final report.
Rhonda Paver
Chair, Austin Child Care Council
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Introduction
National statistics depicting contemporary American family life reflect the social transformation which has occurred over the past 25 years. Personal income has dropped when corrected for inflation. Most families with children require two incomes. Rising divorce rates have escalated the number of single parent households with children, predominantly headed by women. Women now comprise 46 percent of the labor force. They still earn about 25 percent less than men for comparable work. Sixty percent of mothers of children under age five are employed; seventy-two percent of mothers of school age children work for pay. Twelve million of the twenty-one million children under the age of five spend time in out of home care1.
During this same time period, Austin has emerged as a quintessentially successful American city. The local economy has diversified and continues to expand. The area is a key center for technology research and development, a "technopolis."2 There is considerable entrepreneurial activity. Unemployment is very low, currently less than three percent. Austin is now a city of young families; the school district is growing by as many as 2,000 students per year. We have the capacity to be a model city for the next century.
Gibson, Smilor and Kozmetsky3 identify four factors fundamental to the development of a technopolis. They appear to capture the history of Austin during the past 15 years: scientific pre-eminence in technology-based research, development of new technologies for emerging industries, the attraction of major technology companies, and the creation of home-grown technology companies. They identify collaboration across seven sectors (education; large corporations; emerging companies; federal, state and local governments; and local support groups) as crucial to this type of regional economic development. Collaboration is championed by individual visionaries and influencers who carry out and enact these visions by creating linkages across sectors.
While infrastructure development constitutes the first phase of technopolis development, it is the deeper structure which sustains it. An education and training system for the development of entry-level skilled technology workers is essential. A vibrant and rigorous public-education system is fundamental to the development of that workforce. Access to high quality health and social services is crucial, along with a diversified community able to provide the array of necessary support services which help to maintain a desirable quality of life for the community.
Of these elements, perhaps the most vital is an affordable, accessible array of options for the early education and care of our children. Quality early care undergirds cognitive development and school success. It is the need for proper care and nurturing of our children which cuts across all ethnic, social, and economic sectors and unites our community from the grocery store clerk to the child care worker, university professor, public utility worker, state employee, and high tech engineer. In Austin as in the rest of the country, most mothers of young children are in the paid labor market. We need their contribution. We must also be attentive to who is watching the children.
If Austin is to become a model city, we need to focus on the children.
Mayor Kirk Watson
Austin is a community committed to preserving a high-quality of life for its citizens. This value is applied to the early education and care of our children as expressed in the Community Action Networks4 vision statement that Austin will be: A community where all children and families have access to a comprehensive system of high quality early education and child care and family support in order to assure that all children have opportunities for successful and productive lives.
Early care and education of children cuts across all sectors of the economy and community.
The vision and the reality of early care in Austin are extremes on a continuum. Nationally, child care needs are being recognized, and here is a need for national policy and investment, but the process of reviewing local needs and researching national trends has led to some alarming conclusions. Simply put, the strength of the Austin economy is intensifying a crisis in local child care. Left unchecked, the crisis could impair the healthy development of our children and impede economic and social development of the community.
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The Local Crisis:
- Virtually all child care centers in the area are reporting extreme difficulty in recruiting and retaining qualified staff and finding substitutes, a result of the expanding local economy.
- Child care is one of the lowest paid occupations in the community, with an average starting wage of $5.78/hour. Child care teachers earn less than fast food workers and grocery store clerks, and often with fewer benefits. The quality and quantity of the labor pool has diminished considerably, endangering the care our children receive.
- There are as many children on the waiting list for the child care support subsidy through CCMS as there are children currently receiving it. Currently that wait lasts up to two years.
- Thirty-six percent of child care staff across the city indicated that they have plans to leave the field, according to preliminary survey results.
- In the four months since the City Council resolution was passed, four centers in the Austin area closed their doors. The primary issues cited were an inability to retain and recruit child care staff, and increases in operating costs which exceed budget. In the past year, 101 providers, including 15 child care centers, have closed their doors5.
- One center, which was included in a City annexation of property, noted an increased cost of $10,000 to meet the Citys regulatory requirements as a result of that annexation.
- There has been a documented negative impact on the ability to attract new businesses to Austin related to the quality, access, and affordability of child care in Austin.
Child care centers that attempt to keep tuition fees down, whether for-profit or non-profit, are being forced increasingly into operating at a deficit, losing staff, and being unable to fill vacant positions with qualified staff.
The skill and stability of the teacher is the cornerstone of quality child care. Affordability, accessibility and the quality of child care in the Austin area are inherently linked. Attempts to address one area affect the other two.
The purpose of this report is to examine the issues affecting access, affordability, and the quality of child care in the Austin area, and to make recommendations for specific actions to improve access and affordability for families while maintaining quality child care.
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The Case for Increased Investment in Child Care
The Austin community recognizes the early care and education of our children as a collective good. The philanthropic community, represented by six local foundations recently jointly sponsored a public forum addressing the issues6. The forum, Early Childhood at Risk: What is the Cost of Neglect? moderated by Mayor Kirk Watson at the Headliners Club on May 26, 1998 provides additional evidence of the emerging importance of this local issue7. Participants included representatives from the academic, business, government, judicial, religious, philanthropic, health and social service, and early childhood sectors of the community. Champions for children are beginning to emerge from beyond the ranks of child development and related professions.
As the analysis of the child care market attests, imperfections in that market exist which establish early care and education of children as an area for public intervention and investment. The existence of federal support reflects a publicly held value in this involvement. This section explores the case for community investment using a question and answer approach.
Why shouldnt parents bear the sole cost of care?
The direct answer is that parents are and should continue to be responsible for the care of their children. Parent fees account for the largest source of revenue for child care. The reality is that the quality of care which fosters good social and intellectual development in children is costly. The true cost of that care was not previously recognized because it was historically contributed by women as non-wage labor. The advent of the child care market is now defining the market value of that care.
Increasingly, child care is becoming financially inaccessible to parents because the cost is beyond their means. In exploring what Austin area families do to meet the early care needs of their children, many themes become apparent, but two of them predominate: There is a strong sense of personal family responsibility for care. Second, the options available for families are a function of family circumstance and income. Though these themes are not surprising, they have implications for understanding the real need in the community and for making decisions to address that need. Because most decision makers in the community will come from a setting of stable family circumstance and at least moderate income, it is vitally important to listen to local expertise, including parents, in order to fully understand the range of needs and solution strategies.
The theme of family responsibility for the care of children drives parents to perceive difficulties in finding and affording child care as personal issues. Most employed parents tend to "bite the bullet" and experience relief when their child enters school at age five, reducing the out-of-pocket tab for child care. While the family is most affected by the availability, quality and affordability of care, that sense of personal responsibility may prevent parents from recognizing these as community-wide concerns. The current national highlighting of child care issues combined with local staff shortages increase understanding that the availability of high-quality, affordable-care options is important not just to families, but to business and the community as a whole.
The issue of personal family responsibility is further complicated when one considers the impact of the cost of care on families as a percentage of income.
It surprises many to learn that families now actually spend more on the early education and care of their children than they contribute to the public university education of those children8. The cost of early care is borne at the most vulnerable period of the family economic life-cycle, when careers are being established and there has not been an opportunity for long-term savings.
Families now actually spend more on the early care and education of their children than they contribute to the public university education of those children.
Nationally, child care is the fourth largest item in the family budget, following housing, food and taxes9. For those with more than one child in care, that cost becomes the first or second most expensive item in the family budget.
For families with more than one child in care, that cost becomes the first or second most expensive item in the family budget.
Child care is costly and good child care costs more, but not a lot more10. Certainly the costs are minimal compared to the short- and long-term benefits of good care. Economists have determined that nearly 20 percent of the cost of child care continues to be supported by the low wages of child care teachers11. When adjusted for inflation, low child care wages have lost 25 percent of their value over the last 20 years. Teachers cannot afford to continue to underwrite the cost of this care. Educated and trained staff are leaving the field, and there are few to no replacements for them. In Austin, child care teacher turnover averages 35 percent, compared to the 6.6 turnover rate for public school teachers. While high turnover among low-wage earners does not likely affect the quality of fast food, the effect on the development of young children is dramatic.
We had one homeless family in our center with seven children. They were living in their van. The baby, at seven months, could not yet roll over. We worked with him for a period of months in our center and he is now toddling around, developmentally on target. Thats the value of early care.
Agency Director
Child care costs in Travis County have risen nearly 50 percent in the past 5 years creating severe economic pressure for families, according to the Community Action Network. This implies greater anxiety in the work force in general. Lack of child care is a major barrier to employment for low-wage workers. Unavailability of affordable care drives low-wage earners out of the labor market. This exacerbates the need for these workers in service industries in the Austin area. Parents cannot continue to commit in excess of 10-25 percent of their family budgets to child care. This is particularly true when families are not the only ones who benefit from the availability and affordability of good child care.
Parents cannot continue to commit in excess of 10-25 percent of their family budgets to child care.
So, who else benefits?
We all do as a community. Employers benefit in the short term through productivity gains when parents need less time off to care for kids, and when they are less distracted by child care-related anxieties. Reductions in tardiness and absenteeism are measurable. Businesses, particularly those employing lower wage earners, benefit from lower job turnover when child care arrangements are stable. Businesses also benefit in the long term when todays children become tomorrows work- force. To sustain its position as a regional technology center, Austin will continue to need a literate, trained and highly skilled labor pool. That talent pool is particularly needed for entry-level positions which the youth of our community can fill.
The availability of quality child care is integral to a successful workforce development strategy. This is as much a business issue as a social issue.
-Mike Lacour, Director of Human Resources, IBM
The statistics should be enough to make the case for business support for quality child care.
- Austin American Statesman, 5/31/98
In a setting of very low unemployment, such as Austin currently faces, businesses compete for labor. Investing in child care as an employee benefit can provide an effective competitive advantage for employers in attracting and retaining workers. There are multiple options for meeting employees child care needs that range in cost. Implementing these options can support employees directly and the community as a whole.
Investing in child care as an employee benefit can provide an effective competitive advantage for employers in attracting and retaining staff. Beyond serving the direct interest of the corporation, there is a maturing sense that investing in dependent care is a good idea for deeper reasons.
Corporate cultures that embrace progressive dependent-care initiatives recognize that this creates a healthier balance of work and family life for employees. This benefits the employer, employee and the family. Its an investment in the community.
Norma Neal and Susan Pintchovski, Austin Area Employers Collaborative
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Why should local government invest?
The Austin community as a whole has benefited tremendously from recent economic growth, but that benefit has not been evenly distributed. Large disparities in income exist which correlate with local geography and ethnicity. Access to quality education beginning in the early years is crucial to full social and economic participation in our community. The quality of early care is the most important contributor to the educational readiness and achievement of children. An investment in the early care and educational access for all Austin children may truly be the most efficient and effective investment to be made in Austins future quality of life.
An investment in the early care and educational access for all Austin children may truly be the most efficient and effective investment to be made in Austins future quality of life.
The benefit derived from investing in the early care of at-risk children has been studied in a classic piece of longitudinal research called the Perry Preschool Project. In the study, 123 African-American children born in poverty and at high risk of failing in school were tracked into adulthood. At ages three and four the children were randomly assigned to two groups. One group received high-quality preschool. The other group received no preschool program. The results of the two groups as they reached ages 19 and 27 speak resoundingly of the value of early intervention.
Figure 1 12
Impact of Preschool Programs on Children Later in Life: Age 19 Findings
Figure 2 13
Impact of Preschool Programs on Children Later in Life: Age 27 Results
The correlation between good early childhood care and achievement of young adults is clearly shown. Money invested in early care and education will result in measurable savings in other areas. The benefits to the community are tangible, as the research reflects: reduced need for special education; fewer arrests and reduced costs due to crime; reduced costs to the justice system for prosecution and incarceration of criminals; reductions in welfare costs; more stable families based on increased marriages and fewer out-of-wedlock births; home ownership; and a better educated, more productive workforce.
Public investment in child care can also lead to leveraged resources. The Austin community could enhance its share of federal draw-down of funds by investing in improved quality of care. Local philanthropies seem poised to support investment collectively, if they perceive the development of community collaboration around issues affecting young children. This collaboration does more than just increase funds, it has a synergistic effect.
Bringing funders together to collectively address the needs of our youngest children does more than just increase the available monetary resource, it engenders creativity, collaboration and passion.
Marion Tolbert Coleman, Ph.D., Hogg Foundation for Mental Health
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Why not just increase availability of care why invest in quality?
The outcomes generated above are based on family-centered early care, not merely custodial care. They are long-term and have high-dollar value. They reflect improved lives, especially for children who start life at a disadvantage. Unfortunately, child care in most centers in the U.S. is poor to mediocre, with 40 percent of infants and toddlers in care of poor quality, making them vulnerable to illness and accidents, and lacking in consistent nurturing relationships14.
Quality of early care is related to specific variables. We know that higher quality relates to higher staff/child ratios, more staff education, and administrator experience. Lower quality and poorer outcomes for children were linked to lower standards of care and lower wages for staff. The results of the Perry Preschool Project reflect long-term outcomes for children. Important child outcomes are observed early on. Children in higher-quality child care had better language and pre-math skills, and more advanced social skills than those in lower-quality programs. They also had more positive self-perceptions. Higher-quality programs had an even stronger impact on the language ability of minority children, and on the self-perception of children whose mothers had less education15. Children who receive high quality early care are better prepared to succeed in school, an attribute recognized by AISD public school teachers.
Fully 87 percent of child care in Austin/Travis County is in facilities which just meet the minimum state licensing standards. Programs that comply with additional standards beyond those minimum standards required for licensing provide higher-quality care. Examples of such programs are those that are accredited and those that have designated vendor status. According to the Community Action Network, only about one in eight child care slots in Austin/Travis County is in an NAEYC-accredited, National Association for Family Child Care- (NAFCC) accredited or CCMS-designated vendor facility. Fully 87 percent of local child care slots are in homes and centers which just meet the minimum state licensing standards. This does not account for the large numbers of children in informal and unregulated care situations. The perception that child care in the Austin area is hard to obtain and of poor, minimum, quality has resulted in documented difficulty in attracting corporations to the community.
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How much is currently invested in child care?
Nationally, parent fees provide the primary revenue source for child care, followed by federal and state spending. The largest federal contributions come in the form of the Child and Dependent Care Tax Credit ($2.8 billion), and the Head Start program ($3.5 billion). Most state spending is motivated by capitalizing on the opportunity for federal draw-down of funds through a state match.
Figure 3 16
Major Revenue Sources for Child Care in the U.S.
Another way of looking at the issue is in terms of the potential return for the investment. In the case of early care the potential return is very high because it is the most crucial period of human growth and development. The rate of brain development (and opportunity for positive impact) along with federal spending patterns in health, education and welfare are represented in contrast to the age of federal program beneficiaries in the diagram below. The diagram reveals a critical mismatch between opportunity and investment in this country17.
The Mismatch Between Opportunity and Investment
Other communities have begun to invest in child care with successful results. Some states have apportioned part of the state income tax to support early child care. On a national level there is impetus for the President and Congressional leaders to "Put their leadership behind their [pro-children] rhetoric" by supporting legislation that would reserve some revenues from any future national tobacco settlement for child care18.
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How do we improve access and affordability of care in Austin?
First and foremost there is a need to develop collaboration across sectors of the local community. Interest in collaboration exists. The costs of quality child care are considerable and will not be adequately addressed unless the community as a whole embraces the issue. The participation of the business community is essential. Service providers, local government and philanthropic groups cannot succeed unless the business community shares significantly in the commitment. Participants must perceive that working together will provide the best outcomes for all.
The participation of the business community is essential. Service providers, local government and philanthropic groups cannot succeed unless the business community shares significantly in the commitment.
Using a model similar to that which succeeded in building Austin as a regional center for technology innovation, Champions for Children are needed. These are visionaries businesses and people who understand the importance of early care and education to sustaining economic growth and can work across sectors to bring the possibility of community-wide access to affordable, quality care to fruition. The City could designate a Blue-Ribbon Panel of supporters as spokespersons who can carry the message of this vision in a way that will yield results in terms of significant dollar investment.
Businesses will likely not participate unless doing so creates value for them. That value is measured as a return on their investment. In the current employment environment, investing in child care can be a means of competing effectively for talented workers. This is a short-term return, as are reduced absenteeism and tardiness, and increased productivity of employees as a result of stable quality-care arrangements.
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Building Successful Solutions: A Model
Four essential elements evident in effective strategies for improving equitable access to affordable high-quality child care are identified below. An action model including process and product outcomes is included in the appendix.
1) Establish principles of equity and fairness.
2) Target measurable outcomes and monitor progress in areas of access, affordability, funding flexibility, and improved quality.
3) Emphasize multi-sector collaboration.
4) Use the wisdom of experience drawn from successful initiatives in other communities.
Establish principles of equity and fairness in child care reform:
- Public support for child care will be available to all families as an investment in the future of all children.
- Lower-income families will be given more assistance for child care than higher-income families.
- The financing system will encourage parental choice.
- The needs of children of all ages and abilities will be considered.
- The finance system will include regulatory requirements to assure quality.
Target the following as measurable outcomes and develop methods of evaluation:
- Greater funding flexibility.
- Improved access.
- Increased affordability.
- Improved quality.
Emphasize multi-sector collaboration, including:
- Local, state, federal government.
- Corporations and non-profit businesses.
- Religious community.
- Philanthropic organizations.
- Health and social services.
- School districts.
- Academic community.
Use the wisdom of experience drawn from other communities:
- Integrate child care into larger issues.
- Analyze and use a politically feasible approach.
- Develop long-term thinking with multiple approaches.
- Leverage resources.
- Base decisions on community assessment.
- Tailor solutions to local need.
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Recommendations
It is recommended that the City of Austin work to establish the infrastructure needed to support affordable, accessible, high-quality early education and care for all children in the Austin community. The following steps are recommended as a means to that end. Primary recommendations engage the City as a partner in a collaborative community effort and address the roles of the City as a policy maker and as an employer.
To improve the accessibility and affordability of child care in the City of Austin, the City, as a leading partner in community efforts, will undertake the following strategies and initiatives:
- The City of Austin will establish and provide seed funding for a Community Child Care Fund. The City will make an initial, substantial contribution ($1 million) and collaborate with additional partners from other sectors (private foundations, corporations, others) to build a significant fund.
- The Child Care Fund will be the collection and distribution point for funding direct child care for eligible families and child care quality improvement efforts, via a Coordinating Board which has oversight and monitoring responsibilities. COA funds and other funds generated will be used to leverage federal/state/corporate/foundation dollars.
- The Mayor and City Council will establish a Blue-Ribbon Committee of community leaders who will be vocal, effective advocates for investment in the vision of affordable, accessible, quality care for all Austin children, an issue fundamental to the long-term quality of life in our community.
- Implementation of a planned-giving campaign will provide an endowment fund, with renewable income generated from the endowment used to support ongoing local investment in child care.
The City will act as a model employer, integrating internal policies which support families and exploring a range of strategies to improve employees ability to parent their children:
- Expand the understanding and use of existing programs such as Flextra, flex-time, jobsharing, child-care vouchers, and summer camps.
- Develop supervisor training to educate City supervisors about the Citys family-friendly policies and programs,including sensitization to nursing mothers, child care, school-age care, and special needs and ill-child issues for parents.
- Monitor the economic impact of child-care issues to the City as an employer (e.g. the costs of lost productivity, staff turnover, training) and encourage other employers to do the same. Maintain fiscal responsibility as a public employer by correlating the costs of direct investment in employee child-care benefits with the cost savings as a result of reduced absenteeism, turnover, etc.
- Provide paid parental leave for parents at the birth or adoption of a child, or for medical necessity
- Provide direct child-care benefits for employees families whose gross family income is less than 80 percent of the local median income.
- Explore the possibility of on-site or near-site child care for City employees
- Actively participate in the Austin Employers Collaborative.
As Policy Maker, the City will explore and establish mechanisms to reduce operating costs to child care providers, while maintaining quality standards, allowing redirection of center resources to supplement staff wages and benefits. For example:
A) Cost offsets could include:
- The use of tax abatements for locally owned, accredited child care programs.
- Reducing or eliminating city property taxes paid by non-profit child care programs or their lessors.
- Reducing or eliminating city fees charged to child care programs such as food service permits, building permits and zoning fees, garbage/water/waste water/drainage fees, utility costs.
B) Improve neighborhood access to child care centers by:
- Altering zoning and building codes to allow child care centers and registered family child care homes to be in and convenient to neighborhoods, especially where transportation is a barrier.
- Requiring developers of new or restored office space and housing developments to include space for child care facilities or to contribute a designated fee to the Child Care Fund per square feet of space.
C) Use incentives:
- Through the bid evaluation process, encourage contractors and sub-contractors to provide child care benefits for their employees.
D) Lobby:
- COA lobbyists could work on legislation that affects child care at the local level.
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References
1 Childrens Defense Fund
2 Gibson, D.& Rogers, E. (1994). R & D Collaboration on Trial: the story of MCC. Boston. Harvard University Press.
3 Ibid. pp.100-103.
4 Community Guide, 1997. Community Action Network.
5 Austin Families, Inc. personal communication 6/12/98.
6 Funders included the Hogg Foundation for Mental Health, Lola Wright Foundation, RGKFoundation, Shield-Ayers Foundation, the Trull Foundation, and Expanding Horizons
7 Austin American Statesman, May 27, 1998.
8 Child care costs more than college
9 National Association for the Education of Young Children. 1992. Where your child care dollars go. Washington, D.C.: NAEYC # 545, $.50.
10 Cost, Quality and Child Outcomes in Child Care Centers: Key Findings and Recommendations. (1995). Special Research Report. Young Children. pp. 40-44.
11 Ibid., p. 42.
12 Perry Pre-School Project, age 19 findings, from Community Action Network.
13 High/Scope Educational Research Foundation: Perry Preschool Project Significant Benefits, age 27 results.
14 Cost, Quality and Child Outcomes
15 Ibid.
16 Mitchell, A. & Stoney, L. 1997. Financing Child Care in the United States. The Ewing Marion Kaufman Foundation. The Pew Charitable Trusts, p.3.
17 Civitas child trauma programs. Baylor College of Medicine. Houston, Texas.
18 Austin American Statesman Child care cost can top college, study cautions. 5/30/98 p. A4.
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