Ohio’s loss of childcare workers is more than a pandemic problem; it started way earlier

CLEVELAND — While the pandemic shrunk childcare options in a way that still lingers for Ohioans, there has been a downward trend of childcare workers and licensed facilities for a much longer period, according to state and federal data.

Between a combination of low wages, shifting poverty thresholds, changing state reimbursement markers and licensing qualifications, childcare workers and facilities have had to deal with mounting issues while still providing a necessary service.

“If the childcare market could solve this, they already would have,” says Will Petrik, a project director at Policy Matters Ohio. “This complex problem requires state action to make childcare more affordable and accessible for families, recruiting and retaining workers, and reimbursing providers for the cost of care.”

So what is the state of the industry?

A long-declining workforce

Ohio has fewer childcare workers (12,849) than at any time since 1999 (12,330), more than 20 years and multiple recessions ago, according to the latest data from 2021 from the Bureau of Labor Statistics.

At its peak in 2005, there were more than 25,000 childcare workers in Ohio. In 2019, there were 18,710.

The pandemic exacerbated the drop. During 2020, childcare facilities were among the first to change their business model, forced to take in fewer children and use less staff.

By May 2020, the number dropped to 14,040, a 25% reduction in workers. Then in 2021, the number continued to slide to under 13,000.

This ebb and flow somewhat matched Ohio’s overall workforce – either looking for or in a job – decreasing from at least 2004, with each significant drop correlating to an economic recession and then the pandemic, according to a September report from Policy Matters Ohio.

“When the economy is going well, many people are working,” Michelle Bieber, president of the Ohio Association of Child Care Providers, says about how employment dictates childcare needs. “There is a point where we’re not going to need staffing because people are not working.”

Yet, even if fewer people may need less childcare right now, some schools already have wait lists so long that they are already accepting toddlers for the 2024-2025 school year.

Policy also plays a role, particularly in publicly funded childcare for families at or below certain income levels, which allows childcare providers to get reimbursed by the state for serving those kids.

But who qualifies for this is constantly shifting.

“At the beginning of the 2000s, it was up to 185% of the federal poverty level,” Petrik says. “Then it was bumped down to 150% of the federal poverty level. Then, after the Great Recession, which had funding cuts in the fiscal year of 2012, the budget reduced the initial eligibility from 150% of the federal poverty level to 125%.”

Cutting eligibility to 125% of the poverty level in 2012 means that the income cutoff was $23,000 for a family of three. Now, at 142%, parents get their childcare expenses fully covered if they make $31,000 or less.

How does this affect workers? With fewer families qualifying for these programs, less staff is needed to watch over children.

The pandemic and recent inflation also led Gov. Mike DeWine to call for raising the threshold to 160% to in the new state budget. But Ohio would still lag behind the country. Some states, like South Carolina, support families up to 300% of the poverty level, or about $69,000 for a family of three.

If Ohio covers families at 160% of the poverty level, a family of three can make $39,776 to qualify.

Constantly shuttering licensed facilities

With fewer workers come fewer facilities.

Many states, like Ohio, require childcare centers, including those in private homes, to be licensed. To qualify, staff must pass a background check, have a complete record of immunizations, and meet a minimum training requirement.

Ohio issues licenses for three childcare program types – Child Care Centers, Type-A Homes and Type-B Homes.

Child Care Centers are facilities that look after seven or more children simultaneously, depending on the child’s age. There were 360 fewer Child Care Centers in 2022 than in 2014, dropping to 4,370 statewide.

Type-A home providers care for 7-12 children at one time. However, each staff member can only care for up to six children and no more than three children under age 2. There were 24 more of these facilities last year than in 2014, although they make up the slimmest piece of the pie – just 313 statewide.

Type-B home providers care for up to six children at once and no more than three children under age 2. Children under 6 years of age related to the provider, including the provider’s children, and home residents, must be included in the total group size.

Since 2014, Type-B homes experienced a continual drop in licensed facilities by the state. In 2014, the state had 5,368 licensed Type-B Homes. By 2022, this number dropped to 2,286, or to less than half of the total from eight years earlier, according to Ohio Department of Jobs and Family Services data.

A significant number of the drops in 2014 and 2015 were due to a change in how ODJFS classified Type-B homes, causing some providers to choose not to renew their license under the new rules, or purging facilities that no longer qualified, according to an ODJFS representative.

Then there was a pandemic.

Some businesses have made it this far thanks to federal funding like the Early Head Start-Child Care Partnership and relying on Small Business Administration loans aimed at helping businesses of all types survive during the pandemic.

A survey of childcare workers in 2020 found that 63% said they would have to close permanently if temporary closings lasted longer than a month and without additional help.

Gov. DeWine in December 2021 announced $150 million in childcare grants and another $650 million in March 2022.

Who works with our children?

Childcare workers skew predominately female. In Ohio, 94.2% of workers are female, according to census estimates.

Workers fall along Ohio’s race and ethnicity line, with 72.2% of childcare workers being white and 14.9% Black.

Typically, a specific license or degree is not needed for childcare workers, with a high school diploma or equivalent being enough. However, childcare workers in Head Start and Early Head Start programs must meet specific education and certification requirements, which vary by work setting and job title.

Some fields of higher education, such as psychology, education, and family and consumer sciences, could be helpful. However, Bieber says that when shrinking job availability or wage numbers are publicized, enrollment in such programs goes down.

The highest share of childcare workers in Ohio has a high school diploma. This is followed by one or more years of college credit but no degree, a bachelor’s degree, or an associate’s degree.

The median pay for childcare workers nationally as of May 2021 was $27,490 per year, or $13.22 per hour, according to the BLS. The lowest-paid 10% earned less than $8.91, and the highest 10% made more than $17.99.

The highest-paid childcare workers are those in elementary and secondary schools at $14.35. This is followed by religious, grant-making, civic, professional, or similar organizations at $12.93. The lowest are those in other child daycare services at $11.43.

The largest share of childcare workers in the nation works in child daycare services, at 27%. This is followed by self-employed workers (26%), those who work in private households (21%), elementary and secondary schools (8%) and religious, grant-making, civic, professional and similar organizations (6%).

The state reimburses providers based on data collected from market rate surveys, which are tied to the poverty level thresholds. However, Petrik says the rates are based on minimum wage and a system that is not successful in recruiting or retaining workers.

The Center of American Progress released a report in March that looked at market rates throughout the county. The federal recommendation is that states use the 75th percentile of market prices. Ohio offers the 25th percentile for every category, around $230 a week, often tying for the lowest in the country.

Of course, location also plays a part in it.

“Every portion of the state of Ohio has different wages,” says Bieber. “So your rural area will pay differently than your city.”

Bieber says that childcare employers must pay staff more than minimum wage to stay competitive. For her businesses in Toledo, she intentionally compensates her workers more than they would find at a grocery store or food service position.

“When it comes to wages, I have to meet the marketplace,” she says. “If a bagger at Kroger is making $18 an hour and they just have to worry about not putting the eggs on top of the bread, whereas I have teachers that are caring for other people’s children and have that type of responsibility, it puts us in a very weird place.”

Typical responsibilities include supervising and monitoring the safety of children, ensuring that children have enough physical activity, rest, and playtime, and bringing potential problems to the attention of parents or guardians.

Petrik says Policy Matters Ohio recently called for a $20-an-hour minimum for childcare professionals in the new state budget.

Despite the recent decrease in childcare workers, the Bureau of Labor Statistics expects a 6% increase in the workforce over the next decade, which is the average job growth in the United States and would add 61,600 jobs nationwide.

But that falls short of the projected 170,100 openings for childcare workers yearly over the next decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or retire and not necessarily increase the existing workforce.