Child care providers are still closed and Virginia’s labor force is declining. What happens if parents can’t go back to work?
Teachers in masks care for children in the infant room at a daycare run by The Children’s Center, a nonprofit child care program in the Hampton Roads region. (The Children’s Center)
Until the pandemic hit, Cate Garstang said her life was going pretty normally. She gave birth to her son, Andy, in May 2019 and was back to work as an office assistant in Richmond by the end of July. For the next several months, Andy was in daycare while Garstang and her husband worked.
Then came March, and Virginia’s first confirmed cases of COVID-19. “We were watching and waiting, watching and waiting, and kind of starting to get more and more uncomfortable with the situation,” Garstang said. “But our daycare was saying they couldn’t close until the health department told them they needed to close.”
That never happened. Child care providers, in fact, were specifically exempted from Gov. Ralph Northam’s K-12 school closure order. But a few weeks in, with so much still uncertain, she and her husband decided to pull their son out of daycare. Garstang said her company initially told employees they could use remaining vacation and sick time, so that’s what she did, assuming her bosses would finalize a formal work-from-home policy.
“Then, a couple of weeks after that, they sent me an email saying I didn’t qualify for family leave and they couldn’t keep me on,” Garstang said. She’s been home with her son ever since. For the first month and a half, she was actively looking for another job, but eventually — and especially after learning she was pregnant again — Garstang said the family decided they’d try to make it work with her staying at home full-time.
“It’s very, very, very tight and it’s not sustainable for the long-term future,” she said. But finding another daycare during the pandemic — one that was more affordable for the family — seemed just as challenging.
“There were already so few options,” she added. “Everything that we looked at was either full for years out or the prices were astronomical or it was some sketchy person from Facebook who wanted to watch our kid in their house. And now, I know a lot of places have closed, and that makes it even harder to get a spot and even more expensive when you do.”
A labor force in decline
The same challenges Garstang experienced throughout the pandemic have created a crisis in child care, both nationwide and in Virginia, where 2,014 providers have closed as of Sept. 14 and only 868 — 43 percent — have reached out to the state’s Department of Social Services to provide a reopening date, according to spokeswoman Cletisha Lovelace.
Providers across the state say they’ve been hamstrung by a significant decline in enrollment, fueled by a variety of factors that often work in tandem. Some parents, like Garstang, withdrew their children early over safety concerns and later found themselves unable to re-enroll — driven by statewide safety guidelines that instructed providers to cut class sizes. DSS removed group size restrictions from its guidelines earlier this month, but still says that children should be able to maintain six feet of social distancing to share a space.
Along with the new health restrictions, some daycares and preschools have seen newly unemployed parents lose their state-provided child care subsidies, which — with a few limited exceptions — are only available to residents who are actively employed. Many experts say the ongoing obstacles have led the industry to a critical turning point, which could result in permanent closures without significant financial assistance.
“There are a lot of unknowns, but what we can tell from the teachers and the directors and the owners is that people are very uncertain about their ability to withstand the economic hit from COVID,” said Daphna Bassok, an associate professor of education and public policy at the University of Virginia. That, in turn, has led to concerns about what might happen if working parents suddenly find themselves without child care.
Virginia’s labor force had already fallen by 140,339 between February and July — a number that’s separate from the total unemployment rate because it only includes those without a job who are not looking for work, according to Timothy Aylor, a senior economist with the Virginia Employment Commission.
“This decline is actually worse than comparing year-over-year change in the labor force because it had been steadily rising during 2019 and into the beginning of 2020,” he wrote in an email last week, adding that the sudden drop “brings the labor force participation rate” — at 64.4 percent as of July — “down to 2016 levels.”
The VEC couldn’t provide further demographic details about Virginians who dropped out of the workforce during the pandemic. But Emily Griffey, policy director for the child advocacy group Voices for Virginia’s Children, said there’s concern that the decline is driven by parents who are being forced to choose between keeping their jobs and caring for their children.
“The long-term implication is we just won’t have a workforce,” she added. “This is primarily impacting moms, the female workforce, and the low-income workforce who don’t have the ability to work from their homes.”
An outlook that’s only getting more uncertain
Garstang said she’s part of a large Facebook group for local moms, where she’s seen plenty of chatter about facilities closing, raising rates or reducing their hours while keeping tuition the same. Rachel McGuire, who left her job as a behavioral assistant in Richmond to care for her five children during the pandemic, said she’s even heard of facilities that have moved to providing care every other day, presenting another scheduling challenge for working parents.
“That was definitely a consideration,” she added. “I guess I could have made something like that work. But part of what I was thinking was, ‘How would I even get child care? How would this even happen?’”
For providers in Virginia, those logistical decisions are driven by an economic outlook that many say is only getting more uncertain. Facilities have been challenged since the beginning of the pandemic, but some of the revenue losses from decreased enrollment and new COVID-related costs such as deep cleaning and additional staffing were offset, at least partially, by federal Paycheck Protection Program loans and grant funding from the state.
In April, Northam announced he was dedicating $70 million in CARES Act funding to child care in Virginia — money that was specifically set aside in the first federal aid package to expand an existing grant program for daycares and preschool. Through April, May and June, co-payments were eliminated for low-income families who received subsidies through the state, and $15 million was devoted to expanding paid absences for state-subsidized providers, who typically don’t get reimbursed for a child’s attendance if that child takes more than 36 absences in a year.
Most of the funding was dedicated to grants for child care centers that were open and followed the state’s safety guidelines. Those grants were extended for another cycle in July, August and September, and, as of Sept. 14, a total of 3,680 payments had been sent to facilities, Lovelace, the state social services spokeswoman, said.
But other benefits, including the eliminated co-pays and increase in paid absences, weren’t extended. That’s especially hit providers who serve low-income students. Maria-Isabel Ballivian, director of the ACCA Child Development Center in Annandale, said some of the children in her program — which was founded to meet child care needs for working families and now provides services to many parents in the Latino community — have already exceeded their paid absences this year because multiple family members have contracted COVID-19, forcing the whole household to quarantine.
Other parents have lost their jobs or had their hours reduced, disqualifying them from the state’s subsidy program or making it difficult for them to afford copays on tuition.
“We have been giving some scholarships and discounts, as much as we can, but we’ve gotten to the point where the amount of liability from parents is growing at a very fast pace,” Ballivian said. “We’ve had to say, ‘If you don’t pay us now, we’re going to have to disenroll your children,’ and so I’m waiting to see what that will do to our budget.”
An even more fundamental problem is that the state has nearly exhausted its grant funding. Lovelace said more than $38 million has been distributed to child care centers and there are “still hundreds of grant applications that have been reviewed and are in process for payment.”
“These anticipated grants have exhausted the CARES federal funds,” she added in an email on Monday. Some providers say they’ve already had their applications denied. Rosalind Cutchins, executive director of The Children’s Center, which operates eight early childhood education locations in Hampton Roads, said she received a second round of grant funding for one of her buildings, but was told to resubmit the application for another. When she did, the Department of Social Services sent an email warning it was reviewing applications on a first-come, first-served basis and “only while funds remain available.”
“While we wish we could award everyone a grant, we have nearly exhausted the federal money we received, and we cannot guarantee that all applications will receive grant funding,” the agency wrote in a Sept. 11 email. Carol Lieske, who runs the Main Street Child Development Center in Fairfax, said DSS lost her application for the first round of grant funding and denied the second after funding ran out.
“And that was the more meaningful funding,” she added. “So, of course we’re struggling because we have about half the number of children we would normally have due to the size restrictions.”
‘I personally feel exhausted’
The ongoing uncertainty has left many providers scared to think about the future. And recent research from the University of Virginia highlights the disproportionate damage that COVID-19 has done to the childcare industry versus K-12 schools, which have received far more in state and federal funding.
Results from a recently published survey of more than 1,600 early educators in Virginia — conducted by Bassok and other researchers at UVA’s EdPolicyWorks program — found that daycare and preschool teachers (almost all of whom were women) were laid off at more than a quarter of childcare centers across the state. More than 35 percent of teachers reported their earnings had declined during the pandemic, and more than 30 percent reported they had worried about running out of money before their next paycheck over the past three months before the survey was distributed in May — double the number of lead K-12 school teachers who reported the same concern.
Bassok said the pandemic is elevating the issue of razor-thin margins within the child care industry, which has historically been funded at far lower levels than public education despite the high costs of delivering quality care. “Part of it is this belief that when children are young, they should be cared for by their families, but that’s not a belief that aligns with how most kids in the United States spend their early years,” she added.
COVID-19 is threatening to break an already fractured system. A study by the Center for American Progress found that providers across the country faced, on average, a 47 percent increase in operating costs during the pandemic even as enrollment declined. For Virginia providers, the list of new requirements can seem endless. Ballivian said her center, which can normally accommodate up to 290 children, had to reduce its capacity to 180 for much of the pandemic — accomplished only by converting all the building’s available space into classrooms.
Since the start of the pandemic, she’s had to shut down classrooms multiple times after students or staff members contracted COVID-19 — missed days, and revenue, that weren’t reimbursed by the state. There are new costs for personal protective equipment and cleaning supplies, and Ballivian said she’s also had to adjust her programming to accommodate more school-aged children who are no longer attending in-person classes.
“You have to because now all of a sudden you have teachers who were depending on the school care,” added Cutchins, who also added extra classrooms to accommodate older students. “Otherwise, we wouldn’t have the staff to run.”
Ballivian said she had to boost her internet capacity to accommodate students doing online learning, which ended up costing around $6,000. The additional expenses are coupled with additional work for frequently underpaid teachers, who are often asked to shoulder new responsibilities like deep cleaning or serving meals to students in their classroom.
“My teachers come in at 6:45 a.m. to begin cleaning,” Ballivian added. “I personally feel exhausted. I’ve never in my life had to work this many hours. And it doesn’t stop. It’s a constant effort to make things right for everything around you, with the added stress of knowing the decisions we make here can influence the health and wellbeing of everyone around us.”
Many providers across the state have been operating at a deficit. In July, ACCA lost about $38,000 in revenue, according to Ballivian. But both she and Cutchins said nonprofit centers, supported by additional donations from the community, were still having an easier time than most small, private providers — among the hardest-hit by the pandemic.
Cynthia Farris-Lynch, who owns a daycare in Suffolk County, said she had to refinance her house to stay afloat during the nearly five months when only three children were enrolled in her 12-student program. Since July, that number has gradually increased to seven, but the center is still struggling to survive with significantly less revenue. Farris-Lynch said she received around $9,000 from the state during the first round of grant funding, but it was still nowhere near enough to make up the losses.
“I try not to think about the future because it’s terrifying,” she said. “I’m 76 years old and I’ve been doing this for 52 years — this is my livelihood. My husband passed away, so I either make it or I don’t. I just like to think positive and think that the Lord is going to fix all this.”
The future of funding
Right now, it’s unclear when — and whether — additional money will be allocated to help providers. Northam’s spokeswoman, Alena Yarmosky, said the governor’s amended budget includes $19 million to support childcare, but state lawmakers still have to approve the allotment in the ongoing special session. “Given that General Assembly budget negotiations are ongoing, we are waiting to see legislators’ budget proposals before exploring any potential new CARES Act funding,” Yarmosky added in an email on Thursday.
Meanwhile, the financial struggles of the industry and its impact on working parents has become a national conversation, but it’s still uncertain how that might influence any future stimulus packages. The CARES Act included $3.5 billion for child care providers, but Virginia Democratic Sen. Tim Kaine, who successfully advocated for that funding to be included, said there’s bipartisan awareness that the initial allotment wasn’t nearly enough to prop up the industry.
How much more should be given is still an open question. Kaine, with more than two dozen other senators, is advocating for at least $50 billion in additional aid dollars, but said in a Wednesday phone interview that other proposals — including a Republican stimulus package that was widely rejected by congressional Democrats — have called for a more modest $15 billion. Negotiations on a new stimulus bill have been stalled for months, which has made the funding question largely obsolete.
“I’m not happy on the progress on that bill because the Senate — after months of not doing anything — now the Senate GOP is more interested in the Supreme Court than doing anything about COVID,” Kaine said. “But I think it absolutely has to be included because if we want to safely reopen the economy, we’ve gotta have child care. And if there’s not adequate child care for parents, they won’t be able to come back to work.”
McGuire, who left her job as a behavioral assistant in Richmond to care for her children during the pandemic, said the virus has impacted a broad spectrum of child care arrangements. Before Virginia recorded its first cases, she hired a nanny who homeschooled her five children along with his own kids. But as case numbers grew, they decided it would be better to separate the families. Since then, she hasn’t been able to find a replacement.
Concerns over COVID are still a big driver — McGuire said her sister-in-law sent her son back to daycare and had to pull him out again two weeks later after the facility announced a suspected case. But access and affordability are still major questions. McGuire said without a reliable provider, she couldn’t imagine trying to juggle a job and caring for her kids.
“I realized I could try to make this work or I could let it go,” she said. “And honestly, I cried because I loved that job so much. But my husband makes twice as much money as I do. And a lot of times, that’s how it goes.”
“I don’t know if I would say that most women that I know stopped working,” she added. “But it’s this constant question that comes up among moms. Are you going to keep fighting to keep your job, or are you just going to stay home with your kids for a while?”
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