Even before the coronavirus struck child care businesses struggled to stay viable. Now, in the midst of the pandemic, many have closed or are on the brink of closure according to Suzanne Pearl, the Minnesota director of First Children’s Finance.
Pearl shared this message with the House Early Childhood Finance and Policy Division Thursday during a remote informational hearing on the impact of the COVID-19 pandemic on early child care and learning. No action was taken
“It should be clear to everybody by now that child care is the backbone of our response to the pandemic. Every other vital sector, health care, groceries, utilities, they all depend on that,” said Rep. Dave Pinto (DFL-St. Paul), the division chair.
Over the past month, Pearl said she has heard from hundreds of providers who are worried about whether they can, or even should, stay in business. Those who have remained open report huge drops in enrollment, often to as low as 20% to 25%. While providers often require families to pay when their kids are taken of care out due to illness, many are struggling to enforce those policies, resulting in a loss of revenue.
In addition to dwindling enrollment and revenue, providers are having difficulty finding affordable cleaning supplies, are concerned about their health and safety, and are finding it difficult to keep workers.
“The current situation has really brought to light that child care workers who have been laid off and access unemployment insurance are often being paid more not to work than they were at their jobs,” Pearl said.
Karen DeVos, owner and director of Little Learners Early Childhood Education Center, reiterated these concerns, saying that as a business she would be better off closing. On the other hand, she has felt compelled to stay open as long as possible.
“It is our responsibility to give back to a community that has given us so much. These essential employees need us, the children that we care for need something that feels normal,” she said.
But DeVos also cautioned that without some additional help she will not be able to stay open.
State lawmakers have already taken some steps to ease the strain. As part of their COVID-19 response legislation, nearly $30 million was appropriated to fund emergency grants for licensed child care providers serving essential workers during the public health emergency.
By the application deadline, there were 6,000 applicants. The funding will support approximately 1,200, according to Ann McCully, executive director of Child Care Aware of Minnesota, which is administering the program.
Looking ahead, Pearl said there’s more that needs to be done, including providing flexible capital in the form of grants, loans and forgivable loans strategically targeted around the state where the need is greatest. Providers also need help to strategically deploy that capital to put it to the best use during the economic crisis.
Rep. Mary Franson (R-Alexandria) said she empathized with providers but noted many industries are struggling as the result of the pandemic and social distancing orders.
“They are not the only industry that is in dire straits right now, that is on the brink of closing,” she said. “We do have businesses that are actually permanently closing, they will never open up. We have individuals who will not have a job when the economy does open up, so it’s not just child care providers.”