Despite legislative efforts, child care workforce challenges persist 

New initiative will target children of child care workers

Celeste Thingvold, superintendent of Bowbells K-12 school system in the northwest corner of the state, faces potential blowback once the main child care facility in town closes in a few weeks.

The only other day care provider in Bowbells is expecting a baby later this summer, potentially leaving the community without many options in the fall.

The uncertainty is impacting her ability to manage staff and finalize contracts with at least three of her teachers.

“That puts all of my teachers in a bind, because they obviously can’t come to work if they don’t have child care, and if I have to find a sub, and that impacts education,” Thingvold said.

“I have teachers that say, if they don’t have child care, they’re not going to be able to sign a contract,” she said.

The situation is forcing a search for potential solutions. One avenue Thingvold is exploring is opening a daycare herself, but without workers, that may not be a possibility.

“I just need to find employees, and I know that’s the challenge, because that’s why the other facility is closing,” Thingvold said.

It has become a familiar, widespread refrain for child care facilities across the state and country. Recruiting and retaining staff is difficult when the number of workers is limited and the ability to pay competitive wages is constrained.

Nationally, child care worker wages have increased by an inflation-adjusted 27% since 2019, which has also increased the cost of child care passed along to parents.

That increased cost has led more parents to leave the workforce, compounding the worker shortage.

Another problem is even though wages have increased for child care workers, they’ve increased around the same rate – or even more slowly – than many other previously lower wage industries competing for workers.

“We’ve lost quality candidates,” said Mohamed Hussein, vice president of Jasmin Child Care and Preschool in Fargo. The school shifted to nonprofit status after initially starting as a for-profit business in 2015.

Hussein relays the story of driving by area restaurants and seeing starting wages at $18.

“That’s for a dishwasher,” he said. “It kind of gets me thinking … am I in the wrong industry?”

That wages are higher for jobs less demanding and requiring less responsibility than child care aides and teachers looking after the well being of children has begun to rub some the wrong way.

Champions of Childcare is a group started by concerned parents in Fargo to bring attention to the child care workforce crisis while also celebrating the workers themselves.

“I don’t consider them babysitters, they’re teaching our kids,” said Chelsey Knutson, a spokesperson for the campaign. “They don’t get the respect they deserve and don’t get celebrated as much, so we wanted to be able to do that with this.”

The campaign includes highlighting Fargo child care workers on the group’s social media accounts and speaking out to area media about the contributions they make.

“You know, this is a hard job.” Knutson said. “If you can’t compete with other companies in town, it’s hard to find and keep workers.”

State funds flowing, but uptake slow

In April 2023, Gov. Doug Burgum signed a $66 million child care package put forward by the Legislature to address some of the challenges providers face, but it did nothing for wages and workforce.

A total of $22 million goes toward expanding the existing Child Care Assistance Program, which is mostly federally funded, in order to increase the number of families who qualify to have their child care covered.

So far, that hasn’t brought the number of families covered up.

As of the most recent data from March 2024, 2,607 families and 4,185 children were covered that month, down from August 2023 highs, when 3,143 families and 5,263 children were covered.

When announced, the funding package was said to help increase the number of families covered by up to 6,460 by the end of the 2023-2025 biennium.

One issue providers brought up was some families did not want to apply for assistance because they did not want to appear to be getting government aid.

A total of 77 facility improvement grants have also been awarded and another 126 applications are under review, according to Kay Larson, early childhood director at the Department of Health and Human Services (DHHS).

“I think these things can all take pressure off,” Larson said. “Perhaps the quality improvement grants might be something that somebody could use in combination with other things to help with wages.”

Another $15 million is also available through Grow Childcare grants for new or expanding providers to increase capacity for infants and toddlers in several counties across the state where available child care options are low.

So far, five applications have been submitted, and one pre-license application for a new child care program in Williams County has been awarded, according to Larson.

Funding of $5 million was also earmarked toward increasing the number of families participating in the N.D. Working Parents Child Care Relief Program, which incentivizes businesses to cover some child care expenses of employees with infants and toddlers under 36 months of age.

Currently, only 43 employers across the state have opted into the program, with only 271 parents receiving a match to their employer’s child care benefit.

Larson said that only around half of those 43 businesses have parents actively participating. She cited the slow uptake is related to issues of employers not knowing the full household income of an employee, as well as other businesses that are still determining their benefit structures.

Of those businesses that have opted in, most are providing a $300 benefit per month, with the state matching that, Larson said.

Direct worker benefits being rolled out

One new initiative being launched in June that will directly impact workers is the Child Care Workforce Benefit.

This program will offer free tuition for child care staff working 25 or more hours per week, with coverage coming under the Child Care Assistance Program.

From June 1, child care workers with children will be able to enroll through a self-service portal set up by the DHHS.

“I think we’re going to be able to engage some new people in the workforce, but also keep some people who have young kids,” Larson said. “The average child care wage is $11.80 an hour, with no benefits, or, you know, you’re lucky if you get benefits.”

Michele Gee, economic assistance policy director at the department, said providers often reduce child care rates for employees already, so the new initiative should help sustain employment and existing provider programs.

“We’ll be able to support the child care costs for their employee, rather than having them reduce the cost themselves,” Gee said.

Steps fail to address ground truths

Xanna Burg, director of Kids Count North Dakota, a nonprofit group that compiles data on children and family well being in the state, said legislative aid did little to help providers with elemental concerns around workforce and wages.

From her vantage point, the conversation among the Legislature last session focused more on how to expand child care for working families.

“Really the conversation on the ground is like, how do we keep what we have open, and wages and benefits are a big part of that,” Burg said.

According to her read on state data, there’s been a slight drop in the overall number of providers but not an equivalent drop in capacity. She said this reflects a loss of home providers who serve fewer kids, with larger centers potentially absorbing or even increasing capacity.

Analysis of the most recent data by Kids Count North Dakota indicates current child care capacity only meets 81 percent of the needs in the state. Costs for parents range from nearly $10,000 per year for infant care to close to $9,000 for children between the ages of 3 and 5.

Hussein of Jasmin Child Care said he hopes legislators will look further into supplementing child care worker wages and health benefits, and if those were addressed, it would take a lot of pressure off existing and new child care centers that hope to open.

“This needs concrete meaningful investment from the state,” Hussein said.

Beth Wolff, a representative of North Dakota Child Care Professionals Inc. and a child care operator in Oakes with her daughter, sees the pressures other providers face across the state. Food, energy, insurance and other costs have continued to rise, she added, meaning rates at the center have increased.

“It’s hard to find staff, it’s hard to keep staff,” Wolff said. “We’ve had fantastic staff, and I’d love to be able to pay them $20 an hour, you know, and I can’t even pay them $15 an hour. Staffing is a huge, huge issue.”

Wolff provided one anecdote that summed up her hiring situation well. One staff member, knowing how difficult finding replacement staff is, gave her nine months’ notice she was leaving. Only five people applied and only two of those interviewed.

“One wanted $20 an hour, and another was going to have a baby in June and wanted 12 weeks paid time off, and we were like, ‘We can’t do that, we don’t even get those kinds of benefits,’” Wolff said.

When asked whether the state should help supplement wages or benefits, Wolff said she is not in favor of more government involvement in her operation, and thinks red tape and regulation have increased costs over the 40 years she’s been involved in child care.

“We don’t want the government in our business more than they already are,” she said, adding tax incentives for private child care facilities would help reduce burdens and those savings could potentially be passed on to employees.