A sea change for child care

A version of this column originally appeared in Michigan Advance

In less than a week, I will be retiring after more than three decades of working to improve public policy for Michigan children and families. In that time, I have had the honor of working for several of the state’s biggest policy voices for kids, including Michigan’s Children, the Early Childhood Investment Corporation and two separate stints with the Michigan League for Public Policy, serving as the organization’s first Kids Count Director.

I have worked on a number of policies to better support Michigan kids, but over the last 10 years, I have been particularly passionate about child care—both as a service and an industry. And as I take one last look at the policy landscape before my personal role in it changes, I can unequivocally say that the understanding of the importance of child care and commitment to improving it is in the best place it’s ever been.

The past few years, the business community has seen affordable, accessible high-quality child care as a key ingredient to a strong workforce. In turn, with business groups joining the efforts of child advocacy groups like the League and others to expand advocacy and help educate the public and policymakers, we have seen increased bipartisan support for child care. 

And just this week, we saw a culmination of these efforts with increased investment and proposed new policy improvements in child care coming out of the State Capitol.  

With strong bipartisan support, this week the Michigan Legislature passed a 2022 state budget that could be the beginning of an unprecedented transformation in how the state supports child care for Michigan parents, their children and their employers. 

For too long, many parents have been unable to find child care they can afford, while child care businesses have been struggling to stay open and child care workers have been earning just slightly over the minimum wage. The result has been that many Michiganders—disproportionately women—have been forced out of the workforce, and employers are experiencing widespread labor shortages.

In a historic move forward, lawmakers and the governor agreed to invest $1.4 billion in child care beginning in 2022, including: 

• Grants for child care providers. The budget agreement includes $700 million for grants to child care providers to help them keep their doors open. Even prior to the COVID-19 public health crisis, small child care businesses were struggling to stay open, and many are now on the brink of closure. 
• Help for parents trying to find child care they can afford. The agreement includes an increase in the income eligibility threshold for the state’s child care subsidy from 150% of poverty ($39,750 for a family of 4) to 185% of poverty ($49,025), as well as the waiver of parent copays. These changes will provide much-needed child care assistance to thousands more Michigan families. Child care for one infant in Michigan can consume 19% of the income of a family at the state’s median income of $57,054, but is devastating for minimum wage workers—accounting for 55% of annual income.
• Rate increases for child care providers caring for children receiving state subsidies. Lawmakers and the governor agreed to provide $158 million for a permanent 30% rate increase for providers caring for children who receive child care subsidies—ensuring that they can afford to open slots for children from lower-income families—and an additional $222 million for a temporary rate increase. Subsidy rates are substantially below market rates, making it difficult for many providers to accept children with subsidies.
• Strategies to shore up the supply of child care: The agreement includes $100 million for startup grants for providers, including funds for technical assistance and facility improvements, as well as $36.5 million over 3 years to address the dire shortage of child care for the state’s infants and toddlers. The care of infants and toddlers is more hands-on and requires more staff, making it more costly. As a result, only about 2 of every 3 providers offer care for infants and toddlers, and 10 Michigan counties have no licensed child care center slots for these younger children. 
• Bonuses to help ensure that child care businesses can attract and retain child care workers: The agreement includes $30 million to provide bonuses to one of the state’s most underpaid workforces, with median wages of just $11.13 per hour. Low wages are the primary reason for staffing turnover rates as high as 25-30%, with many child care workers finding better wages and benefits in fast food and other traditionally low-wage jobs. 

In the same week that lawmakers agreed to the largest child care investment in the state’s history, a bipartisan group of legislators introduced bills to support child care providers and build the supply of child care. Included in the bills is authorization for new supports for small, home-based child care providers as well as strategies to build the supply of infant and toddler care. 

I just found out that as my last official order of business aside from cleaning out my office, I will have the privilege of attending the governor’s bill signing for the budget, and I can’t think of a better exclamation point on my career. Together, these budget and legislative decisions are good news for Michigan workers, employers, and especially its earliest learners. It is also potentially the beginning of a sea change in how the state supports working parents and the state’s economy.