DES MOINES, Iowa (WHO13) — Federal childcare stabilization grants are set to expire on Saturday and can further threaten the already struggling childcare industry.
The pandemic brought to light the economic difficulties that the industry faced. As a result, Congress passed the American Rescue Plan. Under this legislation, $24 billion in childcare stabilization funds were provided to states. This funding is set to expire on September 30th.
The Century Foundation conducts independent research on economic justice issues. They released a report that concluded that over 70,000 childcare programs in the country may close following the expiration of this funding. They also found that approximately 3.2 million children could be left without childcare as a result of this.
Their research projects that around 401 childcare programs in Iowa will shut down and over 13,000 children will be left without childcare after these funds expire.
Laura Valle-Gutierrez is a Fellow at the Century Foundation. She is one of the authors of this report. Valle-Gutierrez said that the federal stabilization grants kept childcare programs throughout the nation afloat.
She said, “Even if a child care center is able to stay open without the federal funding, they are going to have to raise their prices or potentially close down to only one classroom because they just don’t have enough early educators for the number of children that they want to be able to serve.”
The Executive Director of the Iowa Association for the Education of Young Children, Jillian Herink, has a different perspective. She said that the main problems within the childcare industry lie in its economic model because they can’t afford to pay their workforce enough.
Herink said, “We’ve been losing 40% of childcare workforce in the past 10 years, and the 10 years before that, and the 10 years before that.”
She said that because of this, the childcare centers that the Century Foundation projected to close, would close anyway. According to Herink, this is nothing new because childcare turnovers and closures have been a problem nationwide and in Iowa.
The Iowa Association for the Education of Young Children just completed an Iowa Child Care Workforce Study with Iowa State University’s I2D2 Division. They had over 4,000 respondents and found that the top solutions that may help keep the workforce stable are increasing wages followed by access to benefits.
“In my estimation, the reality for childcare workers right now is if you want to be in the field of childcare, you’re either making poverty wages, you have a second job, or you have a spouse who is making enough income that you can choose to stay in the field,” Herink said.
Whitney Fink is the Executive Director of the Capitol Park Learning Center. Her center has been open in Downtown Des Moines for over 65 years. She said that she is feeling the pressure.
“We heavily relied on all those grants that came through during COVID. And they’re what kept us open,” Fink said.
She said that while childcare issues were highlighted during the pandemic, their problems didn’t end with the pandemic.
Fink said, “[The pandemic] heightened child care to the point where it was important … but now, nothing changed with childcare. We’re still stuck in that same time, but we’re losing the funding to go and get us out of that.”
She said that some employees make as little as $10 an hour, so it’s difficult to sustain a workforce.
Fink and Herink both said that the implications of a failing childcare industry may be severe. According to them, if childcare centers close, this can cause major economic problems throughout many industries.