Report: San Diego County's child care industry is underfunded, understaffed and underused

San Diego Union-Tribune - 5/2/2022

There are only enough licensed child care spots in San Diego County to cover half the number of young children in the region who come from working families, according to a report released last week by researchers at the University of San Diego.

The spots that are available are unaffordable for many families and typically cost anywhere from $12,900 to $19,500 a year.

Meanwhile, the local child care industry is struggling to survive, with more than three-quarters of child care providers surveyed recently either running a financial loss or just breaking even, the report found.

The fees that providers charge families aren't enough to cover the providers' operating costs, which typically run as high as $38,000 annually per child in California, according to the report.

On top of that, virtually all child care providers reported they are having trouble finding enough qualified workers, a reality that was exacerbated by the COVID-19 pandemic.

"Unfortunately, we weren't completely surprised to see that working parents were struggling to balance the needs of their children and the need to work," said Katie Rast, community impact director for The San Diego Foundation, which sponsored the University of San Diego's research. "We also weren't completely surprised to see that child care providers continue to struggle and only really see a compounded challenge that was brought about by the pandemic."

The report is the first to provide a detailed, up-to-date picture of San Diego's child care industry after two years of the COVID-19 pandemic. It contains data from a survey administered this past winter to about 900 licensed child care providers.

It outlines an industry in crisis that is struggling to stay afloat and has seen hundreds of child care providers shutter their doors in recent years. The lack of affordable and accessible child care has significant implications for children who need quality early learning experiences and for families who need child care so they can work, experts say.

About half of the child care providers surveyed said enrollment is below capacity, which makes it difficult for providers to stay afloat financially because they are taking in less revenue.

But it's not that parents don't need child care. Often it's because parents can't access child care, said Tessa Tinkler, director of research at University of San Diego'sThe Nonprofit Institute and co-author of the report.

"The reality is, for child care to be useful, it needs to be affordable, it needs to be nearby your home or at least your work, and that's not the case for most families," Tinkler said.

The lack of affordable child care is impacting working parents, according to a recent poll, commissioned by The San Diego Foundation, of about 850 parents in San Diego County. About 43 percent of parents polled said they had to shift their regular work schedule to care for their children, Rast said.

The lack of child care also disproportionately impacts working women, according to the poll. A quarter of mothers surveyed said they chose not to work because they lack child care, compared with 9 percent of fathers, and more than half of the women polled had to change their work schedules to care for their children, compared with 30 percent of men.

Then there's the cost.

A San Diego family with a preschooler and infant spends — on average — 40 percent of the median income on child care, according to the USD report.

Families that make less than 85 percent of the annual median income can qualify for a child care subsidy. But because San Diego has a high cost of living and cost of child care, many families don't have incomes low enough to qualify for a subsidy, yet they still can't afford child care.

Even among families with children age 5 and under who do qualify, more than two-thirds are not enrolled in subsidized child care. That's because there aren't enough spots available, and there isn't enough subsidy funding to pay for every family that qualifies, Tinkler said.

Some families aren't enrolling because the kind of child care offered doesn't work for them. For example, families may need part-time care but may only find providers in their area who offer full-time care.

The COVID-19 pandemic has also reduced parent demand for child care, providers reported. More parents are keeping their kids home because of COVID fears, because they can now work from home, or because they are now unemployed.

Providers are also struggling to find qualified workers. More than 90 percent of providers surveyed said they are having trouble hiring enough qualified staff. A big reason, experts said, is that many child care providers can't afford to offer competitive wages and benefits.

Child care workers are some of the lowest-paid employees in the San Diego area, according to the Bureau of Labor Statistics. The median annual wage for child care workers in the region was $29,289 in 2020, which was about $6,000 less than the wage needed for a single adult to meet their basic needs in San Diego County, according to the report.

While most child care centers provide benefits like paid time off and health insurance, virtually no family child care homes provide health or retirement benefits, and less than half provide paid time off, according to the USD report.

"It's a workforce that has suffered being historically underfunded, and yet we see that things are only getting harder for them," Rast said.

Tinkler suggested two solutions that would help the local child care industry.

First, she said, the government needs to provide more funding for child care providers. Specifically, she wants to see the state to provide more funding for child care subsidies.

Secondly, Tinkler and Rast said they hope to see more employers take a larger role in providing child care for their workers. That could include allowing flexible hours so parents can transport their kids to and from child care, providing financial aid for child care as a benefit, or providing child care at the workplace for employees.

This story originally appeared in San Diego Union-Tribune.