The Journal. - Child Care Is on the Ballot in One Texas County

Episode Date: November 1, 2024

For decades, activists and lawmakers have tried to change the way child care works in the U.S. But they haven’t had much success. More recently, a fight has been brewing at the local level. This Tuesday, several places around the country will vote on whether to subsidize childcare. WSJ’s Harriet Torry explains what that could mean for one county in Texas. Further Reading: -Are American Taxpayers Ready to Foot the Bill for Child Care?  -Child Care, Rent, Insurance: Where Inflation Hits Hardest Now  Further Listening: -How Employer-Funded Child Care Can Work  Learn more about your ad choices. Visit megaphone.fm/adchoices

Here in the US, if you have children, or even if you don't, you probably know that daycare is really expensive. How on earth are y'all avoiding daycare? I had somebody tell me $550 a week for a kid. Are you insane? Daycare is so high right now that me and my husband had to make the decision to take my son out of daycare for the summer. If you add in my third, it's going to come to about $6,800 a month for daycare.

That's only from nine to two a day. I need the freaking raise and a big one to be able to afford this. How would you describe the state of early childcare in the US right now? Well, one of the people who I spoke to described childcare as a broken business model because childcare is extremely expensive for parents to pay. At the same time, childcare does not make a lot of money. And the reason for that is because it is so labor intensive and they have to pay staff. You know, you can't get an algorithm to put a toddler down for a nap or change a diaper remotely.

You need people to be in person. My name is Harriet Torrey and I cover the U.S. economy. So why are you writing about child care? I think it's an overlooked aspect of the U.S. economy because so many people struggle with childcare. This is not something new that the economy is suddenly facing. And this is something that really underpins the

U.S. economy in so many ways. People need reliable childcare in order to participate in the labor force. For decades, there have been attempts to change the way child care works in the U.S. Activists have called for reforms, and there have been bills introduced in Congress. But it's still really hard to find affordable child care. So more recently, some community groups and lawmakers have taken the fight to the state and local level. In this year's election, several places around the country have child care measures on the ballot.

And one of those places is in Texas. This November, it will be up to Travis County voters to decide whether or not to approve a proposal aimed at making child care more affordable. making child care more affordable. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Friday, November 1st. Coming up on the show, what subsidized child care could mean for one county in Texas. The real danger is in your hand when you're behind the wheel. Distracted driving is what's really scary and even deadly. Eyes forward, don't drive distracted.

Brought to you by NHTSA and the Ad Council. For many families, the high cost of childcare can seem like a problem they have to solve on their own. Will they burn through their savings? Will a parent have to stop working? But our colleague Harriet says that there's a bigger economic issue going on. There is a market mismatch

because childcare is unaffordable for families and it's also not hugely profitable for businesses. And childcare educators themselves don't make particularly high wages at all and it's hard for businesses to pay them more because they would have to pass on those costs to parents who are already struggling to pay for daycare in the first place in many cases.

What is the average cost of childcare for families for one child here in the US? The Labor Department has done some research into the cost of childcare, and it really depends on where you live. If you live in a big city, it's probably going to be more expensive than somewhere smaller, but it could be $17,000 a year. For a lot of people, their daycare bill is the same as their mortgage every month.

So if you have more than one kid who's not in school yet, that is very expensive. Harriet spoke to families about the issue in Travis County, Texas, where a child care measure is on the ballot. Travis County includes most of the city of Austin. One thing that's interesting is that in places like Austin, paying for a year of child care is now more expensive than paying for a year of in-state college tuition. But the very different thing between paying for your child's college and paying for your child's daycare is that you have the best part of two decades to prepare for

college. To find out more about why that daycare bill can be so high, we talked to Jordan McClay. She's the director of the Ebenezer Child Development Center in Austin, which primarily serves lower income families. The other day, Jordan was in a classroom hearing from the toddlers about their Halloween costumes. I'm eating. Just open your mouth.

I want a hat, Tina. I know, do you want to wear your costume? You don't have to. I want a princess. You want to be a princess? Maybe we can make a princess. Usually when I come in, they'll run over and give me a hug and offer me something they've made in the kitchen.

It's usually a plastic lemon, which is fine. It's great. You know, it just, it's joyful. You go in and it's a place where you want to be. Daycares like Jordan's typically serve children from the time they're infants until they're about four years old, when they start kindergarten. And like a lot of daycares across the country, Ebenezer Child Development Center is wrestling with the economics of the child care market.

The center charges around $1,000 a month for each child. With just 23 kids enrolled, Jordan says there's not a lot to work with. What are you spending money on primarily? I would say at least 80 percent goes to teachers, goes to salaries. And then we are not a new building. Example, you know, we had a plumbing issue, completely unexpected, and that is $10,000. Bye. And nevermind, you know, the normal air conditioning. We live in Texas. Our air conditioning is running,

I would say easily nine months of the year. And when it's not, the heat is running. And we also have a janitor that comes every night, which is about $2,000 a month. And so generally breaking even is great. I've never worked at a center where it was a moneymaker. In a typical business, in order to increase revenue, a business owner might cut back on expenses or raise prices.

Jordan can't do either of those things. She can't trim staff, her primary expense, because there are regulations about the ratio of adults to children in a daycare. In Texas, for instance, there's got to be at least one caregiver for every four infants. At the same time, Jordan can't raise her prices because parents are already struggling to pay the tuition.

We have to have a tuition that's high enough to pay our teachers, right? But then is also allowable for parents. And you can't charge any less at this point, right? Much less increase the tuition to help you pay for what you need to pay for to keep the place running. Exactly. And it's that fine line. There's this gap. On top of all this, it's hard to attract people for childcare jobs. It's a demanding role that doesn't pay a lot. The average nationwide wage for childcare workers is less than $15

an hour. As you can imagine, being in a classroom alone with four infants is really hard. And it takes a really special person. Not a lot of people want to do that or have the gift that it takes to be with infants. And so Jordan's in a catch-22. There's a huge demand from families for affordable care, but she can't afford the staff to meet that demand. Harriet has seen the scenario play out over and over

in her reporting. So based on what you've seen, what you've reported on, what do families do when they aren't able to get childcare? What happens? Well, often one person, you know, if it's two parents, one of them will stop working. And for some people that's a choice, and they want to be at home with their kids, and that's great.

But for other people, it is not. They leave the workforce because they can't find reliable childcare that they can afford. And for the economy as a whole, what this means is that it just means that fewer people are available in the labor force. Or they can't take the jobs that they want. You know, they might not be able to take certain hours. They might not be able to take a promotion. So it can hinder people's ability to work. Why does it matter that the labor force supply is reduced? What is sort of the overarching effect that we'd see? The economy's growth potential

depends on the supply of workers. You need people to perform jobs that move the economy forward. The result is a nationwide childcare crisis. And in Travis County, it's led to a ballot measure that would raise property taxes to subsidize childcare. How that would work is next. When Texans in Travis County go to the polls on Tuesday, they're going to see an option on the ballot about funding child care.

And central Texans are talking about the big issues on the ballot. Notably one proposition has to do with child care. Voters will decide whether to approve spending money to make it more affordable. KVU's Isabella Ballot... Across the state, there are almost 84,000 families waitlisted to get subsidized child care. 5,000 of those children are in Travis County. To help increase access to that funding, the County Commission introduced a ballot measure called Proposition A. Proposition A is a ballot initiative to increase property taxes. You know, that money would be used to fund affordable daycare by creating several thousand new spots in daycares and

also expanding after-school programs. And the idea is that this money is for lower-income households and it will help people to reenter the workforce. This proposal would create 1,900 new childcare slots for babies and toddlers from low-income households. It also has the goal of raising pay and creating new positions for daycare workers. Proposition A would be funded through property taxes, an increase of about $125 a year for the average homeowner.

Using property taxes for education is similar to how public schools are funded. And Harriet found that Proposition A would make a big difference for daycares in the area. It means that they will receive more funding that will allow them to hire more staff, potentially raise wages and hopefully get more kids in the door because the subsidies will help low income families.

It'll be producing the money that will pay for that care. So I think for daycare owners, it is definitely a good thing. Prop A does have some detractors. Some Republicans against the measure would rather reduce regulations on businesses than raise taxes. Here's one critic being interviewed by a local television station in Austin. You know, property taxes, it's death by a thousand cuts. Are they going to ask us in a couple of years for another tax increase to subsidize groceries? Another tax increase to subsidize rent? Opponents also say that raising property taxes could exacerbate Austin's already high housing

costs. The Travis County GOP say they don't support the proposition, but they haven't mounted a formal protest against it. What's interesting to you about this effort or this ballot measure? I think just the fact that this is being taken to the people to decide. Austin is an interesting city. It has seen a lot of growth in recent years, but at the same time, it has seen a big jump in the cost of living. So, you know, people who don't have kids might be thinking, why should I support this measure? Why is this my problem? But I think a lot of people realize that

the more people that are able to work, the better it is for the economy overall. And in order for the city to remain a magnet and for businesses to move there, they do need to have reliable childcare in place. And if Proposition A passes, it'll be one of a number of similar efforts around the country. Florida this year started offering tax breaks to businesses that provide childcare for employees.

Vermont created a new payroll tax to increase staffing and capacity at daycares. In Louisiana, taxes on things like gambling and cannabis are being used for early childhood education. And St. Paul, Minnesota and Sonoma County, California both have measures similar to Prop A on Tuesday's ballot. If these pass? It would be an acknowledgement that this is an issue that needs action, that communities need to kind of come together and do something about because it is a real problem in a lot of places and we've seen that. If it does pass, like is there a chance that it could be heralding like the beginning of a broader shift?

Whether within Texas, maybe some other cities might be interested in trying something like this out or beyond. I think we're already seeing that shift. What we've seen in Vermont, what we've seen in Florida. I think these are all pointing towards a bit of a sea change in the way that communities think about childcare and the need for affordable childcare. The fact that there's any kind of movement on public funding for daycare feels really significant to Jordan McClay. She's the director at Ebenezer Child Development Center. She remembers when she first heard about Prop A. Center. She remembers when she first heard about Prop A. I cried because I think having just having a proposition on the ballot that has to do with early childhood is huge. This is huge.

Why is it huge? It's never happened. You know, it's not just our circle of early childhood professionals. This is now showing everybody, like this is big enough that this is on the ballot. And that's amazing, you know, and I'm glad it's happening in Travis County, and I hope that it continues to spread. I wish it had happened sooner, but you know what? It's happening now. And I do think I like to think that it's encouraging, you know, there's some help on the horizon.

That's all for today, Friday, November 1st. The Journal is a co-production of Spotify and The Wall Street Journal. The shows made by Catherine Brewer, Jonathan Davis, Pia Gadkari, Rachel Humphreys, Ryan Knutson, Matt Kwong, Kate Linebaugh, Annie Minoff, Laura Morris, Enrique Perez de la Rosa, Sarah Platt, Alan Rodriguez Espinosa, Heather Rogers, Pierce Singie, Jeevika Verma, Lisa Wang, Catherine Whalen, Tatiana Zamis, and me, Jessica Mendoza, with help from Trina Menino. Our engineers are Griffin Tanner, Nathan Singapok, and Peter Leonard. Our theme music is by So Wiley. Additional music this week from Katherine Anderson, Griffin Tanner, Peter Leonard, Bobby

Lord, Emma Munger, Nathan Singapok, and Blue Dot Sessions. Fact-checking by Mary Mathis. Thanks for listening. See you on Monday.