Child Care Costs Increasing

Posted in: Subsidy Programs, Michigan
March 3, 2008

Child care can cost hundreds of dollars a month.

For many families, it's a large portion of the family budget.

Debbie Freeland's family is no exception.


She and her husband, Cliff, both work, dropping off their two children, Claire, 1, and Mya, 3, at the Kiddie Campus Learning Center in Port Huron Township four days a week.

Freeland works as an insurance saleswoman and her husband owns a landscaping business. They're expecting a third child in April. They already are shelling out hundreds of dollars a month to place their children in day care.

Additional children mean additional day-care expenses, she said.

"The more I have, the more I pay," she said.

Child-care costs increased 4.3% nationally in 2007, according to the Labor Department, and have been rising at area child-care centers in recent years. The national spike was more than the rate of inflation last year.

For Freeland, cost wasn't the main consideration in deciding where to leave her children.

"Though it's one of our largest bills, it's one of the bills I could never put a price on," she said. She was looking for "someone who shares the same morals and values as I do."

For some families, however, cost can be the deciding factor in determining the location and type of child care. Increasing child-care costs add to the mounting pressure many families face in Michigan's rough economy.

Parents struggling financially can benefit from federal child-care subsidies. The money, administered by the state, enables parents to work or attend school, said Cathie Gossman, education supervisor at the Child Care Center in St. Clair County Community College's M-TEC building, operated by the Economic Opportunity Committee of St. Clair County in Port Huron.

"I think in certain situations, it's very important that the state subsidizes this," she said.

However, for the last 11 years, those subsidies have not increased to match inflation or the cost of care, said Mark Sullivan, executive director of the Michigan 4C Association, a network of early-childhood care and education agencies.

For fiscal year 2008, the state approved a 2% increase in the subsidy. However, it cut the hours of eligible care from 100 to 90 hours every two weeks. Families can qualify for the subsidy based on income and other guidelines. The subsidy varies based on a family's income and size.

About 12 families who attend the EOC's Child Care Center receive subsidized care, Gossman said.

"It's time for the state to raise the amount they pay," she said.

Other child-care centers also are feeling the pinch of the economic slowdown.

The Kiddie Campus Learning Center raised its rates by $3 per week for each age group in 2007 for a couple of reasons: the rising price of heating fuel along with mandatory increases in the minimum wage.

Minimum wage increased from $5.15 to $7.15 last July and will rise to $7.40 this July.

Child-care workers often start out at minimum wage, Sullivan said. An increase of even a few cents in that wage affects budgets.

Wages compose about 80% of the budget at child-care centers, Sullivan said.

Alicia Balaska, preschool and infant teacher at Cornerstone Campus Day Care in Port Huron, said the increase in the minimum wage also drove up her center's costs.

"We'd been above minimum wage, but that was just getting by," she said. "That (change) made it more difficult."

A week of care at Cornerstone costs about $125 for a preschool student and $170 for an infant. Costs for older children generally are less.

"We didn't want to increase the rates so much to make it unbearable to the parents," Balaska said. "It's a lot of money for day care, and we didn't want to throw this at them at once."

Child-care centers also are feeling the impact of unemployment in the region, Jahn said.

When a parent is laid off work, that person often stays home with the kids. That can mean layoffs at child-care centers - or higher prices.

For the past six years, about 1,000 child-care centers in Michigan have closed annually, Sullivan said.

Stricter licensing regulations, higher wages and rising unemployment all may play a factor in the closings.

Although it may be tempting to send children to a relative or neighbor when day-care costs seem overwhelming, parents should remember the important benefits of the service, Gossman said. Her center is accredited by the National Association for the Education of Young Children.

"Children do most of their learning in their first couple of years of life," she said.

If they're just at home, watching TV, "They're not getting the quality of care. They're not getting the educational aspect of (day care)," she said. "We don't just baby-sit here. We do educational activities."


Full article available at the Times Herald.