A $15 minimum wage would also raise childcare prices
A new report by EPI is calling for a $15 minimum wage in order to help childcare workers, but that would also raise childcare costs for parents.
When Arik Forsman was elected city council member of Duluth in August 2018, he took upon himself one big challenge; he was going to solve the childcare crisis in Duluth. Coincidentally, at the time local businesses were pushing for more childcare slots. Lack of childcare slots was preventing companies from hiring candidates. Additionally, Forsman had also faced his own shares of childcare issues, which made this a perfect project for him to undertake. Duluth, like most cities in Minnesota, suffers from a shortage of affordable high-quality childcare.
Previously, after a 2012 investigative report by the Star Tribune revealed overcrowding in family childcare centers, the Minnesota Legislature made some changes to stiffen regulation enforcement. However, these changes proved overly burdensome to some in-home providers who started exiting the market. Additionally, this made it hard to attract new in-home providers considering the heavy regulation for a business that was hardly profitable.
So, to appeal to a different type of provider, Forsman sponsored an ordinance that loosened zoning laws to allow daycares to operate in mixed-use business districts. This ordinance was intended to make it easier for businesses (especially manufacturing) to set up childcare facilities for their workers. But even interesting businesses were finding it hard to make it work.
As reported by the Washington Post;
You almost have to be a philanthropist to do this,” said Laura Weintraub, who runs Aimclear with her husband, Marty. “We just aren’t sure how we can deal with all the regulations, all the staffing, and still pay the child-care workers a living wage.”
And even for businesses that had enough capital and were willing to expand their childcare facilities, one issue remained. They could not find qualified workers willing to do the arduous job for much lower wages. People made more money working in foodservice where no training was required.
When a non-profit group investigated in 2019, they found that the area needed 10 more childcare slots than they had needed the year before. In short, the zoning changes had not been enough to entice businesses. The bottom line is that for an industry that is hardly profitable, childcare is overregulated. This makes it hard to encourage new providers, especially family childcare providers.