Minnesota set to start spending $316M to boost child care wages

Children sit in a circle and sing a song at a child care center
Monique Stumon watches as children at School-Readiness Learning Academy in Minneapolis sing a good morning song on Sept. 19.
Kyra Miles | MPR News

Updated: Oct. 23, 10:20 a.m. | Posted: Oct. 17, 12:11 p.m.

From now until Oct. 25, child care providers across Minnesota can apply for monthly payments to help increase worker wages.

The Great Start Compensation Support Program began as pandemic relief for child care workers to help sustain their businesses so families could continue to access child care. Now, that funding is permanent to help get child care workers closer to a livable wage.

The average wage for a child care worker in Minnesota is $14 per hour, one of the lowest for jobs that require a high school diploma. Lawmakers hope the compensation program will attract and retain workers and ease the statewide child care shortage.

Minnesota was one of the first states to allocate state funding to support and stabilize child care providers and centers in 2020, now it is one of the first states to offer direct support to help increase wages.

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“Minnesota’s economy doesn’t work without child care providers,” Gov. Tim Walz said in a statement Monday. “Without the dedicated care they provide, parents can’t work and children miss early learning opportunities critical to brain development.”

The state will spend $316 million to fund the program over the first two years and $130 million each year after as part of a $1.3 billion package of child care investments signed into law last legislative session, Walz said.

“What we’re trying to do overall, with this being a step in that process, is to get people to to be able to support themselves and live with dignity and be able to have a livable wage,” said Rep. Dave Pinto, DFL-St. Paul, who helped develop the program and finalize the permanent funding.

He told MPR News it’s important this program continues to get public support as the first step in getting child care workers closer to a livable wage.

“We’re talking about very, very low wages, very few of these jobs get benefits,” Pinto said. “There’s a long way to go. So we invested what we could, as of this spring. It’s gonna increase wages by by a small amount.”

Under the program, child care centers must use the funds to increase compensation through higher wages, bonuses or increased benefits. Family child care providers have more flexibility to use the funds for other financial needs. 

The state has reached out by email to more than 8,000 child care providers with application links to the program, said Tikki Brown, assistant commissioner of children and family services at the Minnesota Department of Human Services.

The application was designed to be simple to get money out as quickly as possible to providers “because we know they need it,” Brown added.

Once approved, providers will have to fill out a form every month for payments to ensure their need is accurately matched as the program continues.

“We recognize, because of low wages, that child care programs are really struggling to both hire and retain workers,” Brown said. Officials hope the compensation support program provides “one big giant step forward to really help address some of the access issues that we know are prevalent all across the state. Child care is critical.”

To qualify for payments providers must be licensed, certified, or registered and be in good standing with the Department of Human Service or their tribe.

Correction (Oct. 23, 2023): This story has been updated to correctly quote a source and to clarify the latest parameters of the new program.