Roundtable: Child care as a key to NJ’s economic recovery

Reimagining child care in New Jersey, funding and access

If there has been one truism brought to the fore during the COVID-19 pandemic, it is that child care is critically important.

In almost every sector of life, the need for quality and affordable child care has affected children and their families, businesses and their employees, and the state’s recovery as a whole.

NJ Spotlight News last week hosted a virtual roundtable discussion on the critical role that child care will play in the restart of New Jersey’s economy.

The following are edited excerpts from the discussion:

Economic case for early childhood care

Art Rolnick, Associate Economist, Economics Department, University of Minnesota; former Senior Vice President & Director of Research, Federal Reserve Bank of Minneapolis; Member, ReadyNation Advisory Board:

“Start early. If you start early, much more likely that these children will start healthy and ready for kindergarten. And why is that important? Because, again, the research shows if kids start far behind in kindergarten, on average, they don’t catch up… That’s why we argue it’s the best public investment you can make.

“[In Minnesota] we provided parents with mentors starting prenatal when we could, and a scholarship to go to a high-quality early childhood program. We got incredible results out of that… So we can make the case in Minnesota that we’re going to produce one of the best workforces in the country.”

The state of child care in New Jersey

Winifred Smith-Jenkins, Senior Director, Zadie’s Nurturing Den:

“Pre-pandemic, child care operated on razor-thin margins. Somewhere between 50%-70% of our operating budget went to cover salaries, and there’s no way that we can charge parents the true cost of [the] actual operating expenses… This is extremely challenging, and during the pandemic it’s almost impossible.

“Operating during this pandemic is almost indescribable. Enrollment is down and I think that’s across the board. And personnel and other costs have skyrocketed. I think there is one report that stated that the average cost to operating budgets will go up by about 47%, and it will be even higher for centers that are serving children three to four years old. And for family providers.”

Cecilia Zalkind, President & Chief Executive Officer, Advocates for Children of New Jersey:

“This has been an undervalued and under-supported system for years, and I think the pandemic has highlighted that in a very dramatic way. And it certainly suggested if we don’t do something now, we’re in big trouble looking toward recovery.”

Tim Sullivan, CEO, New Jersey Economic Development Authority:

“Look, if 2020 didn’t hit you in the face with the reminder of how important child care is as an industry and more — and, just as importantly, as a driver of our economy, I don’t know what would… And it’s so critical for our overall workforce to go to work and have safe child care for their kids and have all those early childhood education benefits that have been described.”

Peter T. Rosario, President & CEO, Ocean County YMCA:

“Normally I have about 1,000 children at 20 different schools. At this point, I have about 200 children spread across all sites. Some of those sites may have two or three children in them, but we still have to provide the care you have.

“The fixed costs aren’t going anywhere. So you have that crisis, that fixed costs just in a normal year are tremendous to overcome. And in this year, it’s definitely a challenge. And then you have increased expenses for staffing because you need more staff per child. You need cleaning supplies. So it’s really a triple whammy of urgency that we have. I think there are a lot of providers who are dipping into lines of credit and dipping into other resources just to make ends meet to hold on this winter.”

The immediate needs

Rosario: “We need to be able to fund our fixed costs. We need to make up for enrollment that we don’t have. And so much of the support, it’s wonderful and it’s great, but it’s dependent on parents being enrolled… So if you have a classroom with two or three kids, you need eight or nine to make it stable. And then the third part is continue the funding of PPE, continue workforce funding to help stabilize our workforce and ensure that we can continue paying our workers and bring some of them back, because a lot of them still haven’t come back yet due to a lack of enrollment.”

Smith-Jenkins: “We all now recognize that child care is a collective good, but it needs to be seen and funded as a public good the same way as K-12 is funded. We need higher wages for our employees. They are literally on the front lines. They’re the most undervalued and [under]appreciated. And also they lack the necessary kind of compensation benefits that you would find in more valued industries.”

Zalkind: “One is to pay higher child care rates. Two, to expand eligibility for parents. The state had a very significant program in the fall to provide scholarships, child care scholarships for families at much higher income eligibility levels and the important policy of paying based on enrollment rather than attendance. It sounds like a small issue, but it is critical to the stability of programs. If you are a program that operates with a significant number of children who receive child care subsidies, that is an incredible instability.”

A role for the state?

Sullivan: “We want to do more to support the sector as an industry, obviously, for all the reasons that have been described on this panel. But we want to figure out what are the systemic solutions, what are the kind of business enterprise discussions and programs that could be helpful, because in some ways, the child care sector is not dissimilar from lots of other relatively small business.”

Carole Johnson, Commissioner of New Jersey Department of Human Services:

“Practically overnight, we opened up emergency child care that we fully subsidized for essential workers. Child care centers were willing to raise their hand and say, ‘yes, we’ll be emergency child care sites’ at a time when a lot wasn’t known about the pandemic… That is how health care workers got to work. That is how grocery stores stayed open — because child care was willing to do what they needed to do to make sure that … children were in safe environments.

“The unfortunate news is that the tuition assistance we’ve been able to do, the supplemental to subsidies we’ve been able to do, the way we’ve been able to pay based on enrollment, all of those things are contingent on federal resources.

“And so it is a critical time for us. It is a critical time for the centers. We have tried to pull every lever possible throughout the last nine months to be able to find money everywhere we could to support the centers.”

A role for business?

Sullivan: “We’re also trying to build into what we do [with corporate tax credits] as a core economic development. When we’re building a new building, can we stretch those dollars to make sure let’s build a child care center in that building, whether that’s a housing development or an office complex or whatever else?”

Johnson: “There is devastating data from the Census Bureau about the impact of the pandemic on working women, like women who have stepped back from the workforce because they need to be home with their children who are remote-learning. And there isn’t necessarily an easy or safe alternative for them. I think that business leaders see that and recognize that. And while there are many, many challenges on their plates as well, I am heartened by the business leaders who have raised their voice on child care.”

Zalkind: “I think we have a lot of work to do with the business community. There are concerns about the cost of doing business in New Jersey, but I think that’s an excuse. And I think that the pandemic has showed us how important child care is to business, to not just to families. We did a poll a number of years ago about business support for child care, for preschool. And most business leaders responded that they support early childhood [care] — it creates a workforce that they can rely on, that comes to work, that is not absent, that they can retain. And this is the time to put that into action, to include it in a benefit package.

“I have to say, I was very heartened by Mr. Sullivan’s comment about tax credits because I wondered: Our state has used tax credits to bring business to New Jersey. In doing that, why not make child care  … as an incentive for programs, for businesses to come to New Jersey and benefit from tax credits. I think it’s time we do that.”

Smith-Jenkins: “You know, a significant number of the workforce are disproportionately women of color and immigrants.

“We need to create pathways to higher education, thus creating pathways to more economic mobility for families. Without creating these changes, we’re not getting the workforce out of the cycle of poverty. And I think that that is a huge problem because we’re doing a disservice to the teachers and the children in that classroom if we don’t do that.

“New Jersey has actually done this already with the Abbott [school equity] program for 3- and 4-year-olds; so they have a blueprint. I think that we could challenge New Jersey to try to do it for ages zero to three.”

Future of child care in NJ

Johnson: “My vision for the future of child care is that it is not unlike health care… where no one can move to the next level of government without being asked about what their plan is for health care. How are they going to get health care to more Americans? How are they going to get affordable access to health care? My vision is we get to a place for child care [where that same question is asked]. What is your plan? How are you going to get there? What are the actionable steps so that all New Jerseyans can access affordable, high-quality health care and child care.”

Rosario: “Equity drives economics; I think we have to really develop that mindset. I think so much of these conversations start with, ‘Well, how are we going to pay for it? What are we going to do? Can we really do it?’ But … you can’t have good economics if you don’t have equitable access to child care.”

Smith-Jenkins: “The reality is that humans make the most gains in the first five years of life … So if I had to leave the audience with one thing, I would say, let’s reimagine the way we collectively educate and care for children zero to five and fund it as a public good the same way we fund K-12.”

 

Opening remarks:

Art Rolnick, Associate Economist, Economics Department, University of Minnesota; former Senior Vice President & Director of Research, Federal Reserve Bank of Minneapolis; Member, ReadyNation Advisory Board

 

Panelists:

Carole Johnson, Commissioner, New Jersey Department of Human Services

Peter T. Rosario, President & CEO, Ocean County YMCA

Winifred Smith-Jenkins, Senior Director, Zadie’s Nurturing Den

Tim Sullivan, CEO, New Jersey Economic Development Authority

Cecilia Zalkind, President & Chief Executive Officer, Advocates for Children of New Jersey

 

Moderator:

John Mooney, NJ Spotlight News Executive Director & Founding Editor

 

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