Some Indiana child care workers find a living wage is out of reach

Kelly Dawn Jones never thought she’d have to turn her workplace into her home.

Jones founded Love Your Child’s Care 13 years ago. It’s a home-based child care center run out of a small house in southeast Indianapolis. She typically has anywhere from five to 12 kids, from infants to age 11.

The spacious backyard has a colorful assortment of child-sized plastic chairs, a miniature swing set and toy cars. Inside, the 7-by-10 foot dining room functions as a classroom, napping space, and occasionally, a space where Jones teaches yoga.

It’s a tight squeeze. But when the apartment complex she and her two kids lived in caught fire last year, she said they had no choice but to move into the one-bedroom house where she works. Jones sleeps on a futon in the living room, and her children, ages 10 and 15, share the bedroom.

“It's very stressful for all of us because there is absolutely no private space for us,” Jones said. “But we make it work because we’re scrappy like that.”

Like most child care providers, Jones said she gets by on poverty-level wages. Jones said her annual income fluctuates, but in recent years has sat at around $26,000. The average wage for child care providers in the U.S. in May 2021 was $11.43 an hour, according to the U.S. Bureau of Labor Statistics. The BLS defines a child care worker as someone who attends to children at schools, businesses, private households and child care institutions.

Indiana’s child care workers track with the national average, with an hourly wage of $11.64 and an average annual income of $24,210.

“Most of us are literally just planning on retiring in poverty,” Jones said. “And if there's some Social Security for us, maybe we'll have that. But most of us will be impoverished forever.”

Only 15 percent of child care workers receive health insurance, compared to about half of all workers in other occupations. About 1 in 10 child care workers are covered by a pension plan, compared with 39 percent of workers in other occupations, according to a report from the left-leaning think tank Economic Policy Institute.

The challenge of subsidies and strict standards

One big obstacle to making a living wage as a child care provider, Jones said, is the federally mandated cap on the amount of tuition she’s allowed to be reimbursed for care provided to families that receive federal child care subsidies.

The Child Care and Development Fund provides child care subsidies to families making less than 127 percent of the federal poverty level. The federal program sets limits to the co-payments that families receiving subsidies can be charged; those limits are based on family income, family size, years on the program and the federal poverty level.

Jones said those limits — which are meant to protect families seeking child care from paying more than they can afford — also make it impossible for child care workers to make a living wage. Strict state-enforced rules and regulations for child care providers cut down profits even more, she said. 

BriTanya Bays is an organizer with Childcare Changemakers, a national activist group of parents and educators. She owns an in-home child care business in Abilene, Texas.

Bays said in-home providers don’t receive as much federal funding or reimbursement as larger child care centers or ministries. Home-based providers aren’t able to take in as many kids as larger centers, and staffing shortages create additional challenges in increasing capacity.

When federal money isn’t equitably distributed, it’s difficult for all providers to meet the same strict standards, Bays said. In order for providers to keep their license, they must provide regimented and nutritious meals and a quality education environment.

“They're trying to push a school setting without school funding,” Bays said.

Reimbursements are set based on market rates for an eight-hour work shift. But Bays said the state told her to offer a 12-hour window of child care services to families, without an increase in compensation. She said splitting the reimbursement over 12 hours dramatically lowers her hourly wage.

“So I would have to have 10 children here to be able to make close to minimum wage,” Bays said. “And I'm only licensed to have 12 children. So I'd have to stuff my program just to make minimum wage.”

She said she recently decided to not accept children whose families receive federal subsidies because it was costing her too much.

“I was going in the negatives,” Bays said. “It was a lose-lose situation, all the way around.”

Bays and other child care providers say low wages and poor working conditions deter people from entering and staying in the child care workforce.

The Department of Health and Human Services, the federal agency that operates the Child Care and Development Fund, did not respond to email messages from WFYI seeking comment on the program.

Child care shortages hurt the economy

Since the start of the pandemic, more than 15,000 providers in the U.S. have closed their doors, according to research from the child care advocacy network Child Care Aware of America. In 2021, more than 30 percent of Indiana’s child care providers said they were considering quitting or closing down their businesses within the next year, according to a report from the National Association for the Education of Young Children.

That’s bad for the economy. A 2018 report found Indiana loses over $1 billion every year due to the state’s lack of affordable child care.

Lack of access to affordable early care causes many parents to cut back on their working hours or leave the workforce entirely. That’s a financial hit to both families and businesses — employee absenteeism costs businesses an estimated $12 billion every year, according to a report commissioned by the Council for a Strong America.

That’s why many advocates advise workplaces to sponsor their employees’ child care. Early Learning Indiana, a nonprofit based in Indianapolis, partners with employers to help meet the child care needs of their staff.

Maureen Weber, president and CEO of Early Learning Indiana, said she hopes her organization's support bridges some gaps in access. But long-term solutions will have to include policy changes that incentivize more people to work as child care providers.

“Two things are true at the same time,” Weber said. “We aren't charging enough to be able to afford the workforce that we really need to carry out this work, and we're charging more than families can afford.”

Child care providers like Kelly Dawn Jones in Indianapolis say they need the federal government to take action and raise the reimbursements for child care providers, so that they can make a living wage and afford to pay their staff more.

It’s particularly important right now, she said, when workplaces like fast food, retail and other lower-barrier employment are offering higher wages to address their own staffing shortages.

“To have quality child care, you have to have quality staff,” Jones said. “You cannot get quality staff for less than $20 an hour today.”

Contact WFYI economic equity reporter Sydney Dauphinais at sdauphinais@wfyi.org. Follow on Twitter: @syddauphinais.