Most parents struggle to pay the market cost of child care. It is an expensive, labor-intensive industry, and the market does not afford many caregivers to have an adequate wage or reasonable benefits.
For the families who resort to welfare, work or school is a requirement — and the cost of care is somewhat subsidized by the state. The working poor are also eligible for a state subsidy, but funding only covers about 17% of those who are qualified. Some programs are directly funded by the state, but they’re struggling because the established rate does not cover their additional operating requirements in many counties.
CCRC’s public policy objective is to support welfare families and the working poor so that they eventually become self-sufficient.
What’s the cost of self-sufficiency in California? According to Kidsdata, a Packard Foundation program, a family with two adults and one preschooler needs to make $55,730 in order to live on its own without support. The state maximum earning eligibility for this family of three to qualify for subsidized child care is $42,216. That’s 70% of the 2007 state median income.
When the Los Angeles city and county minimum wage of $10.50/hour is enacted on July 1, 2016, two adults earning minimum wage and working 40 hours a week for 52 weeks will make $43,680. They’ll be over the maximum earning eligibility by $1,464 a year, or just $28.15 a week. In this family’s case, raising the minimum wage made them ineligible for subsidized child care.
So what are the family’s choices? Both parents can reduce their work hours. One parent can quit their job, or they can choose a family member, friend or neighbor to watch their children.
The increase to minimum wage clearly does not address the full cost to be self-sufficient. The allowable eligibility rate needs to be increased to a point where parents can become self-sufficient before they lose their child care subsidy benefit.
To help families survive without help, CCRC advocates for an increase to the maximum allowable income to 75% or more of the 2015 state median income of $70,231 — or even an increase to the self-sufficiency amount. And to support child care providers in pursuing quality improvement, CCRC calls for an increase to the maximum reimbursement rate so that a subsidy payment gets closer to covering at least the minimum wage.
If you’d like to help, please contact our Director of Government Relations – Donna Sneeringer.