On July 1, the minimum wage in New Jersey is set to increase from $8.85 to $10 an hour. It’s a victory for many workers in the state, but the child care industry fears the approaching deadline could result in a crisis situation.
“It is wonderful that the minimum wage was increased, but it has to come with an increased state investment,” said Cecilia Zalkind, president and CEO of Advocates for Children of New Jersey.
To qualify for child care subsidies under the federal child care development block grant program, a New Jersey family of four, for example, has to make $51,500 or less a year and be working or in school.
“They then have a voucher that they can take to a child care program where the state reimburses the program for the care of that child,” said Zalkind.
Advocates for Children of New Jersey explains children 13 and under, or about 50,000 kids, are eligible to receive the subsidies. Three thousand child care centers accept those subsidies.
“Under the current formula it takes nine kids to pay three staff, leaving the other four kid’s subsidies to cover everything else like rent, insurance,” said Winifred Smith-Jenkins, the director of Zadie’s Early Childhood Center in East Orange.
“Once that minimum wage is increased and programs must increase the salary of their staff, it’s going to increase their costs with no corresponding increase in the subsidy assistance they get from the state,” said Zalkind.
“They have to keep the adult to child ratio, so cutting staff is very, very difficult. And it’s not like they can pass the cost on to the consumers. The consumers in this case are parents, and when you have families that are eligible for subsidies, they’re low-income families, they cannot afford to make up this difference,” said Advocates for Children of New Jersey Senior Policy Analyst Cynthia Rice.
Centers across the state are concerned that means they’re at risk of having to close their doors. Candace Raymond, the director of a child care center in Union City, says she’s going to want to raise the salaries of longtime staff to balance the new wages of newer employees.
“The quality of my business depends on them, but I can’t compete,” Raymond said.
Advocates for Children of New Jersey estimates funding for child care subsidies has to increase by $19 million to cover the additional cost due to the increase in wages.
“Our families rely on us so they can work and provide for their children,” said Heidi Zaentz, the director of Monmouth Day Care in Red Bank. “90% of those families are on government assistance.”
The organization has a petition with more than 1,100 names on it that they plan on handing to Gov. Phil Murphy, Senate President Steve Sweeney and Assembly Speaker Craig Coughlin Thursday. They say that 75% of the names on the list will be directly impacted by what happens on July 1.