Quality Sacrificed in Proprietary Care

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Despite the Congress's rejection of child-care legislation last year, everyone knows that the nation faces a desperate shortage of day care. So why shouldn't some entrepreneurs do something about increasing the supply?

Indeed they are, and with a vengeance.

Four firms--Kinder-Care Industries, La Petite Academy, Children's World, and Gerber's Children's Centers--dominate the proprietary child-care market, owning and operating more than 2,500 centers nationwide. In recent presentations to a potential client, management personnel from two of these chains described the qualifications for their teaching staff as "18 and warm." Whether an individual must be 18 years old and merely alive or friendly and outgoing to boot was unclear.

As more businesses explore the feasibility of employer-supported child care, the attractiveness of contracting with a national chain is increasing. These companies can fulfill all of an employer's child-care needs: site and building plans, construction, marketing, hiring and training of staff, curriculum plans, and parent programs. And they are prepared to deliver their product at or below average cost in the community while still anticipating a substantial profit if occupancy rates are high.

But while proprietary care satisfies the criteria of affordability and financial self-sufficiency, it does so by placing children in large groups with poor staff-child ratios and inadequately trained caregivers.

The qualifications for employment in the major firms are minimal. Some states require a high-school diploma, and some mandate additional qualifications for head teachers.

The chains typically pay their personnel at or near minimum wage, and they experience high turnover rates. They have only nominal training capabilities and little appreciation of children's needs.

For example, Kinder-Care's average salary for caregivers and teachers in the Detroit metropolitan area was $3.87 per hour in 1988. Immediately after being hired, an 18-year-old high-school graduate with no experience or training could have total responsibility for a group of 4 infants or 12 preschoolers. In other states, staff-child ratios are even less favorable.

It is no wonder that Kinder-Care reports a 30 percent annual employee-turnover rate--and Gerber's rate may be even higher. Spokesmen for both companies admit that their competitors for employees are not necessarily other child-care facilities. Rather, they lose staff members to such employers as McDonald's and Burger King, who generally pay better salaries as well as fringe benefits.

Typically, these companies devote less than half of their centers' operating budgets to salaries and benefits. It is not surprising that a recent study by Kathy Modigliani, a researcher at the Bank Street College of Education, showed that child-care workers are the second lowest-paid profession in the nation. We pay more to those who park our cars and tend our animals than to those who care for our children.

In centers that try to ensure high quality by placing their staff at the top of the child-care salary ladder--little more than $16,000 annually--and by providing reasonable benefits and good staff-child ratios, salaries consume at least 70 percent of operating costs. In such a situation, not only is there no profit for the child-care operator, but the weekly cost of care may be much greater than can be borne by the users--the parents of young children--and must often be subsidized.

The chains are able to construct attractive buildings--often in record time and at record low costs because they use the same plans, contractors, and even the same workmen--and they appear to have all the "right" toys and materials on hand. Parents, who are generally unsophisticated consumers of early-childhood education, are often impressed by these facilities and by the standardized "lesson plans" displayed prominently in the classrooms.

But they rarely ask about staff salaries and benefits, or about employee turnover. Nor are they likely to know their state's minimum staff-child ratios or net square-footage allowed per child by specific age group. They will typically find it difficult to evaluate the education and work histories of the employees--assuming they even inquire about them.

While excellent child care is difficult to find, its ingredients are not a mystery. Three key factors characterize outstanding programs: The number of children cared for by each staff member is low; the total number of children in a specific classroom or group is moderate; and the qualifications and training of the caregivers meet high standards.

But these three variables are precisely those aspects of a child-care program that are the most expensive. Proprietary firms have had to hold them in check lest parents be priced out of the group child-care market and their product left without consumers. This concern has resulted in the companies' trading quality for affordability and profitability.

If quality ever mattered, it matters with infants and toddlers. But establishing optimal conditions for children younger than age 2 is especially costly--typically, twice as expensive as for preschoolers.

The national shortage of group care for infants and toddlers can be attributed to these costs. Even the proprietary firms have not solved this problem. When they offer infant care, they do so as a "loss leader" designed to attract potential clients for the older children's programs.

The profit element in itself is not the central issue here. But profit absorbs funds that might otherwise be devoted to improving services--and thus robs children of excellent care and deprives families of the peace of mind that comes with knowing that their child's day-care situation is indeed a satisfactory substitute for the care they would like to be providing themselves.

In a nonprofit system, surplus funds can be used to support improved ratios, group sizes, and staff training. Yet even under these circumstances, the cost of good care exceeds the resources of most families with young children.

Policymakers must recognize that high-quality, affordable child care requires allocation of public resources.

Currently, more than a dozen bills designed to reduce the burden on families of paying for child care are before the Congress.

President Bush has suggested that the Congress authorize a plan that would offer up to $1,000 in child-care tax credits for low-income families. But given the reality that the average cost of child care is more than $3,200 per year, this kind of subsidy would be of little help to low-income families.

The "act for better child-care services" bill--reintroduced this session after having been defeated in committee last year--provides a contrast. The abc would subsidize care for low- and moderate-income families, establish a national advisory committee on child-care standards, and focus attention and funding on improving staff-child ratios, group size, and training. This legislation has the potential to effect systematic change in the infrastructure of early-childhood caregiving.

In such a changed system, "18 and warm" would no longer be sufficient qualifications for providing care to young children; at best, these should be minimum criteria for beginning to be trained as an early-childhood educator.

Vol. 8, Issue 37, Page 36

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