Labor shortage and inflation pinch Philadelphia child care providers

Many Philadelphia child care providers are short-staffed and struggling to fill positions as rising inflation eats into their revenues.

Driving the news: Day care facilities are losing a battle for workers to companies that are raising entry-level wages beyond $15 an hour — such as Target, Walmart and Amazon — and offering jobs that are less stressful and labor-intensive.

• The hike comes as inflation is at its highest in 40 years, which is driving up the costs of utilities, cleaning supplies, food for children, rents and transportation for both providers and employees.

Why it matters: Day care providers are a lifeline for parents to remain in the workforce, but rising tuitions are pricing some families out.

• Half of all child care worker families are estimated to participate in at least one public income support program in Pennsylvania, according to a 2018 study.

State of play: The state had a net loss of more than 380 child development and early learning centers from February 2020 through last month, Tyrone Scott, director of government and external affairs for First Up, tells Axios.

• Philly has an estimated 1,563 certified child care providers as of February, a drop of 79 compared to two years ago, according to data from the Pennsylvania Child Care Association (PCCA).

Zoom in: While some providers have raised rates, many others are hesitant to pass on higher costs to parents, resulting in a cutback of class sizes and services, Scott said.

• Competition among day care facilities for students is fierce, and higher tuition may push parents — who are more price-conscious than ever before — to seek out cheaper options.
• "It's less of a price issue that's going to hit people. You're not going to be able to find a place for your kid to go," Scott said.

By the numbers: The annual mean salary for child care workers in the Philadelphia region was $25,410, as of May 2020. That's slightly higher than the state average of $24,070, according to the U.S. Bureau of Labor Statistics.

• Many child care workers don't have access to health care benefits through their employers and rely on state and federal assistance, like food stamps, said Diane Barber, PCCA's executive director.

Meanwhile, the estimated weekly median cost of child care in the state was $290 per child, with costs ranging from $148-$627, according to a 2020 Pennsylvania State University study of 30 licensed child care providers.

• The average annual cost of care for an infant in 2019 was $11,560 in a child care center and $8,712 in a family care home, according to the nonpartisan Committee for Economic Development.

What they're saying: Zakiyyah Boone, interim CEO of Wonderspring Early Education, said the nonprofit has been boosting its benefits and providing raises and signing bonuses up to $2,000. But the efforts haven't worked to attract new employees.

• "We're seeing literally an exodus of early childhood educators because there is more money and less headache if they worked" other jobs, like at Target, she said.

Wonderspring, which has programs in and outside of the city, has increased tuition by 10% for the current school year to bring entry-level wages to $13 an hour, but that's pushed some parents to leave.

• "It does not help us if no one can afford to pay it, and they all leave," she said.

The big takeaway: Child care providers say they need the state and federal governments to subsidize costs, or parents will face mounting costs and facilities will shut down.

• "If we're not doing anything to subsidize the cost of child care, somebody has to pay for it, or else child care programs are going to go out of business because parents can't pay," Barber said.