Solving Minnesota’s childcare crisis requires regulatory reform

On Monday, the commissioners of the Department of Employment and Economic Development (DEED), Steve Grover, and the Department of Human Services (DHS), Jodi Harpstead, engaged in a roundtable discussion with the Minnesota Children’s Cabinet, as well as childcare advocates and providers, to find helpful strategies to improve access to affordable, high-quality childcare. But yet again, the focus of this discussion was on government funding.

“We are about 80,000 slots short in the state of Minnesota for child care right now, and it is one of the Governor’s and Lt. Governor’s big goals for their administration to drastically increase the number of slots we have in Minnesota so kids and their families have more access to child care,” said DEED Commissioner Steve Grove. “DEED has made this a big area of focus through our Child Care Economic Development Grant Program and a big part of our ask for this legislative session is more money for that grant program.” 

DEED also announced last week that the Small Business Development Centers at DEED will partner with First Children’s Finance to provide statewide assistance to help child care businesses.

This is in line with other recent efforts to expand funding for childcare.

In D.C., the federal American Rescue Plan included $550 million to give Minnesota’s child care challenges a hearty, welcome, one-time boost.

And in St. Paul, lawmakers are considering two bills with $14 million total to help providers stay in business, to want to be in business, and even to open new spaces in shuttered storefronts and elsewhere. The latter marks a business-model shift from individual in-home child care efforts to larger, more efficient, and better equipped child care centers.

Regulatory reform is key

Public funding would not address the childcare crisis. This is because it would not address the root cause of the crisis — government overregulation.

Research has extensively shown that low pay for childcare workers and high childcare costs, issues that this round table focused on, are a direct result of overregulation. Forcing providers to spend more money on compliance activities leaves little revenue for paying childcare workers. These higher costs are also passed down to parents through high tuition.

Strict staff-to-child care ratios, as well as group sizes, are not only expensive, but they serve little, if any, purpose when it comes to quality child care. The same is true for stringent hiring qualifications.

It is high time Minnesota leaders started focusing on the root cause of the childcare crisis — overregulation — instead of throwing more money at the problem.