Toward a Permanent Workforce Compensation Fund: Notes on Key Sources
Journalists are credited with writing the first draft of history. As a professionally trained historian and budding journalist, I take pride in documenting people, places, things, events and ideas.
Just as honorable, to me, is highlighting the primary sources that will help students of the moment and students of the past understand the complexities of right now. Primary sources are data for historians – they are artifacts produced in the time period one is studying that bear direct relation to the topic under investigation.
The importance of workforce compensation
New York’s parents and children are looking to the state to make sure child care is accessible and well compensated. (Photo: Steve Peraza/Weave News)
The issue most interesting to me at the moment is the absence of a permanent workforce compensation, an absence which scholars and advocates have identified as a clear threat to the accessibility of child care. If child care providers cannot afford to pay living wages to their professional staff, they cannot expand their child care services to meet growing demand. The industry faces a bleak crisis if the wages for professional staff do not increase enough to attract and keep workers in the field.
The constellation I hope to draw is a pathway to a permanent workforce compensation fund that will utilize New York State funding to subsidize child care providers who pay their professional staff wages on par with early childhood education teachers. For more on how and why a child care compensation fund will help New York’s child care industry, please consult this March 2024 Cornell University report.
To highlight the importance of the workforce compensation issues, I am providing some analysis of two documents that everyone interested in child care politics in New York State should consult. These documents illuminate several issues related to the child care industry at this key moment.
Primary Source #1
Source: 2024 Child Care and Development Fund Final Rule Fact Sheet
This fact sheet outlines the amendments to the federal government’s Child Care and Development Fund (CCDF), “which is the primary funding source devoted to supporting families with low incomes afford child care and to increasing the quality of child care for all children.” The CCDF funds are available to each state in the union. The “lead agency” of the state, as pertains to the child care industry, applies for CCDF and receives funding, provided the state takes appropriate steps to follow the “final rule.”
There are three major changes in the final rule aimed to “strengthen CCDF payment practices to child care providers.” In this brief analysis, I will focus on one change. The first amendment to the previous CCDF rule directly impacts the payment that child care providers and professionals receive on the state level: “The rule: (1) required Lead Agencies to pay providers prospectively and based on child enrollment to align with generally accepted payment practices in the private market and better reflect the fixed costs of child care.” This amendment will require states to pay providers based on their enrollment, not by actual attendance.
Just as importantly, the amendment compels the state to provide federal funding in advance of child care services rather than afterward. This amendment obviates the chronic problems created by market-rate costs. Whereas the cost of care is currently defined by the tuition prices (market rates) that households pay, the new rule requires that the states which receive federal funds respond to providers’ cost of care models, which are based on what child care professionals need to provide quality care for the children they have enrolled in their programs. Plus, by making these funds prospectively available, fewer child care professionals will be saddled with unpaid labor and out-of-pocket expenses. Providers will have the opportunity to request subsidization based on enrollment and correlative financial needs as well as receive the funding in time to apply it to their service provision.
I see this amendment to payment practices as a baby step toward a child care compensation fund that pays professional staff on par with early childhood education teachers. It is critical that child care providers receive federal funding at the state level for local businesses based on their enrollment because they must have the resources needed to provide affordable, quality care for the children of parents who pay for child care. Moreover, they must have funding prospectively so they can afford these resources, including trained professional staff, before they open their doors. As lawmakers move toward a permanent workforce compensation fund, the federal government should incorporate language in the final rule to ensure a line expressly for funding professional staff in advance.
Primary Source #2
This report presents several years of research on New York State’s child care system and offers recommendations to the governor on improving child care services in the state.
One might rightfully presume that the single most important task of this coalition of providers, experts, and advocates was to identify obstacles to the availability of child care for households in New York State. It is of singular importance, then, that the report begins by acknowledging that cost and availability of child care are “significant concerns,” but none is as critical as paying the child care professionals who “provide the foundational intellectual, emotional and social development that is necessary for future success.” In fact, low wages for child care professionals have blocked New Yorkers from pursuing child care employment, i.e., low pay has created workforce shortages.
The irony is that New York State has been triumphant in providing households with subsidies that allow more New Yorkers to afford child care. As the report shows, this is at the same time that “workforce shortages threaten to undermine other gains such as the expansion of access to child care assistance.” To address this fundamental obstacle, the task force’s top recommendation was to remedy the instability of the workforce through a workforce compensation fund. NYS’s Child Care Availability Task Force recommended that the state create “a permanent line of funding to support the child care workforce,” to be used specifically “toward increasing the wages of all members of the licensed, registered child care workforce.”
I have had the privilege to speak to and collaborate with members of this task force in various advocacy networks of the NYS child care industry. We have advocated tirelessly to ‘pay the workers’. Child care professional staff is at the core of the child care industry. It’s not enough to make child care affordable; we must also make child care an attractive, well-paying profession for men and women who love to educate and who have compassion for children. For the industry to recover, aspiring child care professionals must enter the field knowing with confidence that they can earn a living working with children. Combining a well paid workforce with affordable child care services will heal New York’s broken child care system. This is exactly what the Child Care Availability Task Force said to Governor Kathy Hochul in their report.
