Published in Economic Development

Pilot program to address growing biz challenge: child care

BY Sunday, February 28, 2021 04:01pm

pilot program offers a potential solution to a growing issue for both employers and their workers: access to quality, affordable child care.

The MI Tri-Share Child Care Program launching in the coming weeks will offer assistance for child care to lower-wage earners. The effort — spun out of a coalition of interests brought together by the Grand Rapids Area Chamber of Commerce — wants to bring more people into or back to the labor pool and ease a worker shortage that persists across several industries.

Grand Rapids-based Vibrant Futures — the former Kent County Regional 4C (Community Coordinated Child Care) that merged with Camp Fire West Michigan in 2015 — hopes to become one of three “hub facilitators” that would coordinate the MI Tri-Share Child Care Program pilot.

Vibrant Futures CEO Chana Edmond-Verley considers MI Tri-Share “a significant movement in the right direction” to help lower-wage earners with child care so they can work.

“It’s an excellent approach for getting at what is one of the biggest issues, and that is child care,” Edmond-Verley said. “The future of work and the future of our economy is inextricably tied to the future of child care. Employers need workers, workers need child care, and children need quality learning experiences. So we get a three-fer if we can get this right.”

Worker shortage

The Michigan Women’s Commission this month will select three organizations to coordinate the year-long MI Tri-Share pilot in their local market.

Tight labor markets and difficulty finding enough workers has been a persistent issue for many employers for years. The concerns have resurfaced of late — particularly in the manufacturing sector — as the economy recovered from the sharp downturn early in the pandemic.

The talent attraction and retention problem have elevated access to child care and early childhood development to a priority issue for the Grand Rapids Chamber, both in terms of the immediate labor force and in long-term workforce development through nurturing children who will become tomorrow’s workers.

MI Tri-Share Child Care came out of a coalition of business organizations, child care providers, advocacy groups and legislators that the Grand Rapids Chamber assembled in August 2019. After members increasingly raised the issue the last few years, the Grand Rapids Chamber considers the ability for people to access quality, affordable child care as tied to supporting and growing the region’s labor force.

If successful, the model could “be a really great tool that we have in our toolbox” to elevate the labor pool, said Alexa Kramer, director of government affairs for the Grand Rapids Chamber.

“We’ve known for quite some time it’s a barrier to workforce development,” Kramer said. “We know that once parents have a safe, affordable, reliable facility for their kids that they can continue in the workforce, upskill themselves and better provide for their family.”

Budget priority

The state backed the pilot with $1 million allocated in the current fiscal year. Gov. Gretchen Whitmer has proposed allocating another $2.2 million in the 2022 fiscal year for the MI Tri-Share program.

Whitmer has also proposed using $370 million to temporarily increase the income eligibility threshold to receive a state child care subsidy from 150 percent to 200 percent of the federal poverty level, temporarily waive out-of-pocket copays through the 2022 fiscal year, and pay for a 10 percent hourly pay increase for child care providers. The appropriation would come from $78 million in one-time state money and $292 million in federal stimulus funding.

The Grand Rapids Chamber was “thrilled to see a substantial increased investment in our child care industry,” Kramer said.

In a town hall last week hosted by the Grand Rapids Chamber, Whitmer said the additional support for child care is needed to continue the state’s economic recovery. Some people have left the workforce out of need as their children were learning at home, and others “by no choice of their own” were displaced for a job, she said.

“The ability to ramp back up and to get people back to work is contingent on the ability to give those working parents the resources and opportunities that they need to have their kids get some early learning experiences and child care,” Whitmer said. “We’ve been hearing from employers all across the state about how important this is, especially in rural parts of the state.

“We think it is a really wise use of resources and would like to make it a long-term commitment, ultimately.”

Splitting the cost

Under the MI Tri-Share pilot, three “facilitator hubs” — one each in rural, suburban and urban markets — will each receive $300,000. The hubs will serve as an intermediary between employers, families and child care providers, and provide program management.

Hubs will recruit employers to participate in the program that will provide child care assistance to their employees. Each hub must recruit three employers and assist in identifying and recruiting eligible employees who must earn more than 150 percent of the federal poverty level but no more than 250 percent. The Michigan Women’s Commission may grant waivers for higher income eligibility.

Eligible employees at participating companies would have their child care costs split between state funding, their employer, and their own one-third share.

A request for proposals describes MI Tri-Share Child Care as an innovative approach to increasing access to “high quality, affordable child care for working families” that can help employers “retain talent and remove one barrier to employment.”

Through MI Tri-Share, the Grand Rapids Chamber and other partners in the coalition hope to address affordability issues as well.

The coalition has sought to elevate child care providers “as businesses and as a vital part of our economy, while also trying to figure out some innovative solutions that were always there but were kind of highlighted during the pandemic,” Kramer said. 

In Kent County, child care averages $210 per week, per child, according to Vibrant Futures. Child care on average in Muskegon County costs $180 to $185 a week per child.

State support for people who meet income criteria, as well as the financial backing of their employers, can ease the cost issue for some parents who face a tough question of whether the cost — especially for families with multiple children — outweighs having a second income. That consideration is even harder for families who need two incomes to get by.

“If there is a way to make it a little more accessible, we hope that in turn makes the rest of the number-crunching at home make a little bit more sense and gets them into the workforce,” Kramer said.

Funding for MI Tri-Share — if the pilot effort proves the model and it continues — will remain subject to annual legislative approval, though Kramer believes business organizations can make the case for ongoing support.

Employers will also need to engage and offer that benefit to employees who have trouble affording child care. Edmond-Verley at Vibrant Futures believes the model will prove itself to participating employers.

“It’s going to be pretty straightforward to prove value, if employers think it out,” she said. “We know we’re having talent attraction challenges, so this market is ripe for an uptick by employers to think out of the box.”

Disproportionate access

The COVID-19 pandemic not only drove unemployment higher but also led to less participation in the workforce. A recent report from the U.S. Bureau of Labor Statistics showed the nation’s labor participation rate declined from 63 percent to 61 percent between January 2020 and January 2021. The participation rate among women 20 years or older declined in a year from 59.1 percent to 56.9 percent, or 2.3 million women.

The participation rate of men 20 years and older declined in the same period from 71.4 percent to 69.4 percent, or 1.8 million workers.

Those numbers reflect how child care is “still really being seen as a women’s responsibility,” and the access issues affect women more than men, said Carla Moore, chief operations officer at United Methodist Community House Inc. in Grand Rapids.

Better addressing child care access and affordability can bring more women into the workforce and help to drive higher economic growth, said Moore, who sees a need for employers to offer child care assistance in their employee benefits.

“I’ve long said: Employers really need to step back and take a creative look at benefits, and that child care certainly needs to be one of them in some form,” Moore said. “It’s the business world that benefits from the labor and they need to look at ways to support that labor.”

United Methodist Community House provides an array of support services to families, many of whom are at risk or are experiencing homelessness. The organization recently partnered with Family Promise of Grand Rapids to enhance its Child Development Center that’s licensed to provide care to 100 children and presently operates at 50 percent capacity because of the pandemic.

A staff member at Family Promise serves as a family engagement specialist at United Methodist Community House, working with and mentoring families and children at the child care center.

“We understand that in order to really impact the success of children that you have to take a holistic approach and ensure that the family unit itself is stable. That’s going to be the best situation for a child to thrive,” Moore said. “It enhances not only the quality that we are able to provide to our families, but it’s a resource to our families so that they can begin to build and achieve goals that they have for themselves personally.”

United Methodist Community House has been focusing more on child care and expanded its infant and toddler program, Moore said.

Moore cites a 2017 needs assessment of the Grand Rapids market that indicated there were 2,400 children two years old and younger, and just 189 licensed child care slots open within United Methodist Community House’s service area.

“Child care is a huge need,” Moore said, “especially when you start talking about barriers to advancing economically.”

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