The down economy hits day care providers

Carolyn with Ishmael at the board
Carolyn Collins has operated her preschool and day care business for the last 25 years. She says she's weathered downturns in the past, but none as bad as this.
MPR Photo/Jess Mador

Carolyn Collins is no stranger to ups and downs in the economy. Her more than two decades in the child care industry have taught her to take the long view of any downturn. But this time, she says, is different.

"I just noticed a couple of weeks ago, wow, my phone hasn't rang," she says.

Last year at this time, all the slots at her accredited day care were full and her phone was ringing with parents looking for space. Now when the phone rings, parents have just one thing on their minds.

"They don't want to know what kinds of programs are you offering, what can you do for my child. They want to know how much does it cost," she says. "Right then and there I know that they are comparative shopping."

Collins, whose day care is in St. Paul, would like to have eight children. She's got five. A few kids recently dropped out because their parents could no longer afford the cost.

Ishmael Powell practices his spelling
Four-year old Ishmael Powell practices his spelling on the board. As the economy continues to decline, day care providers across the state are reporting difficulties filling slots and retaining families. Experts say that, as more providers are forced to close their doors, the ripple effects could be felt even after the economy rebounds.
MPR Photo/Jess Mador

"At this point, it's just like everyone else in the economy - you're going to cheaper, less expensive day care. They are using more family members, next door neighbors. It's kind of the buddy package. I'll get the kids off the bus and you put them on and they go to work," she says.

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That trend is taking money right out of Collins' pocket. Her income is down more than $20,000 this year over the same time last year.

She's not alone. All across the state, providers are reporting trouble keeping children as their parents scale back. Some have lost jobs, or they are choosing to live on one income instead of two to save on child care. Others are piecing together a few days of paid care with family and friends picking up the slack.

The cost of child care has gone up almost 5 percent since last year. In Ramsey County, which is about average for the metro area, it costs more than $200 a week for pre-schoolers. It's almost $100 more a week for infants. And co-pays for subsidized child care have gone up while eligibility has tightened.

"They don't want to know what kinds of programs are you offering, what can you do for my child. They want to know how much does it cost. Right then and there I know that they are comparitive shopping."

Many parents who are keeping their kids in care are having trouble making their payments, according to Michelle Thole, a licensed provider in Brooklyn Park.

"Providers tend to be on the low side of the pay totem pole, so to speak, so that when families get stressed financially lots of times they look at their provider and they say she'll wait for me for a while, she'll keep my kid in care and just not charge me for while," Thole says.

While many providers will try to help parents, Thole warns against helping them at the expense of their own bottom line

Sandy Myers from the non-profit Resources for Child Caring worries that the recession's impact on day care providers could have a negative long term impact on the state as a whole.

"All small businesses are vital to a community but the loss of these small businesses has a ripple effect on school readiness implications for our youngest kids as well as the business economy."

As experienced providers are forced to close their doors during bad times, there will be fewer high quality options available when the economy turns around, Myers says.

For kids who are forced to drop out to help parents make ends meet, Carolyn Collins hopes the lessons she's taught will stick with them.

"You hope you've taught them some skills where, if you're at the neighbor's house, make sure when you're taking your backpack you've got a book in there. You can sit down and read, you have pencils and crayons where you can draw or whatever," she says. "You don't have to be in front of a television all of the time."

Cutting back on child care is a natural, if tough, call, Collins says. And while it has a very real impact on her income, she says she understands the choice. Parents staying home with the kids can be very beneficial. Besides, she says, that's how she was raised.