SIOUX FALLS, S.D. (KELO) — The numbers for child care in Sioux Falls and South Dakota doesn’t look great. That includes some money numbers.
There are more children of working parents who need child care than slots available, according to multiple studies including the new study from the Augustana Research Institute.
Also, open spots may not be affordable for a segment of working parents.
If a parent can’t find child care for a child or can’t afford available childcare, they may not be able to work which has a negative impact on the state and national economy.
A study called “Expensive and Inaccessible: Childcare in Sioux Falls, South Dakota,” examined the child care landscape in Sioux Falls. The study was commissioned by the Sioux Falls Childcare Collaborative and completed as a Beacom Research Fellows Report from the Augustana Research Institute.
The study says that 11,386 children under the age of six in Sioux Falls all have working parents. There are 9,723 childcare slots available, according to the study’s sources. So, 2,000 children don’t have available child care.
The study on the Sioux Falls environment and other research shows that the child care system was struggling before the pandemic and now, needs even more attention.
The COVID-19 pandemic caused a decline in some available child care spaces but data shows that spaces were changing in South Dakota before 2020.
The total number of estimated providers declined by 16% including a 30% drop in registered providers from 2012 to 2018, according to Early Learner South Dakota. But, the capacity has remained at about 30,000 slots.
The estimated number of providers is higher than the licensed number because South Dakota allows for an in-home child care provider to have up to 12 children without registering with the state.
Child care centers may have expanded to account for the slots remaining the same. At the same time, the state has had an increase in the number of children under 4 and a steady participation of 74% to 75% of parents in the workforce.
The Sioux Falls study said 58% of all surveyed providers had a waiting list for children 3 to 5.
Although the study focused on Sioux Falls shows a gap of 2,000 in available childcare slots, the need is spread around the state.
The Minneapolis Federal Reserve District which includes South Dakota, says that there are two children for every licensed child care slot. In Day County, for example, there were an estimated 28.8 children under 6 for every licensed day care slot.
For some parents, it’s difficult to find a child care opening while others may not be able to afford it.
U.S. Department of Health and Human Services (HHS), child care is affordable if it costs no more than 7% of a family’s income.
According to the Economic Policy Institute, 28.5% of South Dakota families can afford infant care. Infant care for one child would cost 10.2% of the median family income in the state, according to EPI.
Studies have noted the decline in the estimated number and licensed number of in-home or family child care sites. Those sites historically have lower hourly childcare fees than childcare centers. If the number of family child care sites is declining and the number of child care slots is replacing them, the cost for childcare is increasing. Again, child care centers are not creating new slots but rather, replacing slots that were once offered by family or in home providers.
How much do parents pay for childcare?
The market rate fee in non-urban areas of the state in 2019 for any child in in-home care was $2.50 per hour, according to a 2019 survey by the South Dakota Department of Human Services. The study said the market rate fee for child care center care was $3 for 0-5 and $3.25 for six and older.
The fees are higher in Pennington, Minnehaha and Lincoln Counties as well as in counties such as Brookings which are designated urban areas. A parent pays $4.20 for a child under three in Minnehaha and Lincoln Counties. It’s $3.95 in Pennington County.
The in-home fee is $3.10 in Lincoln and Minnehaha Counties. It’s $3 in Pennington and $2.65 in Brookings County.
In general child care for an infant and a 4-year-old in the state is $12,860 a year, according to the EPI.
The Augustana/childcare collaborative study for Sioux Falls said the average child care cost for one child is almost $10,000 a year.
If the parents are low-income earners or a single parent, paying for child care may be out of reach.
The average worker in Sioux Falls makes $39,000 a year and would not be able to afford child care, according to the Augustana/childcare collaborative study.
According to the U.S. Census, 11.9% of South Dakotans live in poverty. The percentage is higher for children.
Fifteen percent of the state’s children live in poverty, according to Kids Count of the Annie E. Casey Foundation. Twenty-one percent of the state’s children living in a household with a high housing burden which can make child care even more unaffordable.
About 44% of South Dakota children under the age of six live in a household with an income below 200% of the federal poverty guidelines, according to the Minneapolis Federal Reserve report Scanning the early childhood development landscape in South Dakota. For a single parent with one child, that threshold is about $34,000, the report said.
What’s the childcare risk?
If a working parent can’t find child care or can’t pay for childcare, they can’t work.
Bloomberg City Lab and the U.S. Chamber of Commerce said shortages of child care and the inability to access it causes employee turnover.
A U.S. Chamber of Commerce report examined child care issues in Iowa. The report surveyed 331 working parents with children five and under. The report released on Feb. 28, 2020, said more than half the parents reported missing work because of childcare issues.
The chamber report estimated that Iowa loses $935 million annually because of child care breakdowns.
Breakdowns lead to absenteeism, turnover, people delaying training and leaving the workforce all together.
About 68.5% of the state’s adult age workforce was working in 2019. In 2015, 77.6% of women age 16 and over with children under the age of six were in the labor force, according to several organizations.
Rural Minnesota is experiencing problems similar to Iowa, Sioux Falls and South Dakota, according to the Center for Rural Policy and Development in Minnesota. The organization said on Feb. 18, that while rural Minnesota continues to have job openings and new jobs, without enough child care slots, it will be difficult for areas to attract needed workers.
Child care can be expensive but providers aren’t making big money
The Sioux Falls study said that the average child care worker makes $22,000 a year. The low wage also contributes to turnover.
Child care worker’s families are more likely to live in poverty than other families.
A child care-worker who earns the median income would need to spend 32.2% of the annual pay on child care, according to the EPI.
While state and federal subsidies help some childcares, most do not make a large profit, according to multiple studies.
According to DaycareBusinessBoss.com the average daycare reports making $37,000 a year while others report $20,000 a year.
The Center for American Progress said most of the fees paid for child care go toward staffing.