New bonus program is too limited to impact child care staff shortage in Virginia, some say

Virginia

RICHMOND, Va. (WRIC)-As the child care industry struggles with staffing shortages, some say a new state program offering bonuses to new hires is too restrictive to have a meaningful impact.  

Virginia’s new “Return to Earn” grant program is giving out stipends to incentivize people to get back to work. Eligible small businesses with less than 100 employees qualify for up to $500 in federal funds per new hire after May 31 if they agree to match the contribution. 

Child care providers are specifically exempt from the match requirement but they still have to pay at least $15 per hour to meet the program’s criteria. Some argue that threshold will effectively disqualify the majority of providers. 

“I don’t think it’s realistic for most child care providers in Virginia,” said Steve Traverso, development director with Friends Association for Children. He is currently trying to fill up to six positions across two Richmond locations. “Not a single position that’s open is earning $15 dollars per hour.” 

One 2019 analysis put Virginia’s median wage for a child care worker at $10.96, a 7 percent increase since 2017. 

Traverso said they recently raised their salaries in response to phase one of Virginia’s minimum wage increase and they are gearing up for phase two in January. Still, he said salaries for entry level positions don’t exceed $12 per hour and a more signficant increase could shift the cost burden to families.

“Quite simply, our pay is not the level that it needs to be to compete with other retail and service industry jobs,” Traverso said. “While other industries can adjust their service rates to make up for the cost increase in labor, we don’t have the ability to do that without doing a disservice to our community and the pandemic has only worsened it.”

Data from the Virginia Department of Social Services from earlier this month showed 589 of the state’s 6,042 childcare programs were reported closed.  That’s way down from the 2,421 reported closures during this time last year.

However, many facilities are still operating well below capacity to accommodate social distancing. Traverso said that decrease in enrollment is straining budgets and causing wait lists to build up across the state.  

Virginia Child Care Association Executive Director Kim Hulcher said a lack of accessible and affordable child care could stunt Virginia’s economic recovery.

“It’s a real issue. Families need child care so that they can go back to work. Right now, we’re just not able to support all of the families that need our services,” Hulcher said. 

Some have blamed ehanced unemployment benefits for the staff shortage. At least 25 Republican governors have now announced plans to discontinue the $300 federal boost before the Sept 6 expiration date set by Congress.

Northam said he has no plans to do that. In fact, he presented the “Return to Earn” bonuses as a different way to incentive people to rejoin the workforce.

Asked why the $15 per hour wage threshold was chosen as a condition of eligibility, Northam’s spokesperson Alena Yarmosky said in a statement:

“Rather than subsidize low and increasingly unsustainable wages, Return to Earn supports those small businesses that are committed to paying their employees enough to provide for their families and put food on the table. Childcare businesses may be uniquely positioned to offer competitive wages at this time given the large number of flexible recovery funds that have been allocated to support them.”

Alena Yarmosky, Gov. Ralph Northam’s Spokesperson

While Hulcher said federal COVID relief has helped counter revenue losses, she said many providers are still in survival mode. Plus, some don’t want to rely on one-time funding to pay for a long-term salary increase to $15 per hour.  

“It’s not funding we can budget for in the future,” Traverso said. “Hope is not a plan.”

Hulcher said more permanent funding commitments using public dollars are urgently needed to give essential workers a livable wage. 

“We need seismic shifts in childcare and we have seismic money coming into the state. We need those two things to meet up to really lift up this industry,” Hulcher said. 

Later this summer, the Virginia General Assembly will convene to decide how providers should be able to spend an additional $488 million in childcare stabilization grant funding allocated in the American Rescue Plan.  To date, Northam’s office said $197 million in direct payments has been distributed to over 4,300 childcare programs.

The Northam Administration has also invested in what they hope will become a sustained funding source to recruit early childhood educators, with over $5 million in additional funds being offered in the current state budget, according to Yarmosky.

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