What is child care, and how does it work in Utah?

In most Utah households, all the available grownups are working. Child care, sometimes called daycare, is where the children of these working families spend the workday hours. Utah families are expected to find, coordinate and pay for child care on their own.

Many Utah kids are in informal child care settings, where friends, family or neighbors are responsible for them while parents are working. Sometimes these caregivers are paid, sometimes they are not. Because these informal arrangements are not registered or licensed with the state government, we don't know how many families use this type of care. 

If a person wants to provide care to more than just a few children as a business, they must receive a state license or other state authorization. There are currently 1,205 licensed child care providers in Utah, able to serve about 43,514 children. 

These formal settings are subject to some health and safety requirements. A certain number of adults must be present to care for the children, to ensure proper attention and interaction. Licensed providers can also receive a "quality rating" from the state, which refers to the educational opportunities provided in that child care program.

Some licensed child care programs are run by non-profit organizations, which can offer lower tuition costs to low-income families, thanks to extensive fundraising efforts. Most licensed child care programs are for-profit businesses, run by small business owners.

Child care programs are typically available either at the provider's home ("home-based" or "family" child care) or at a center. Family child care programs are typically small, with between 8 and 16 children. Centers usually serve a much larger population of children, and can range from small (24 kids) to very large (100+ kids). 

Why should Utahns care about child care issues?

Many Utahns rely on child care in order to work. Unless they can find a safe place for their children to be during the work day, people with kids can't take jobs in any of Utah's important industries, such as tourism and hospitality, health care, technology development and agriculture. When our child care system doesn't work, the people who constitute our workforce can't work, either.

Even if you don't have children, you are impacted by Utah's child care challenges. Lack of child care has forced many Utahns who want or need to work, out of the workforce. This contributes to the persistent staffing issues that result in your favorite restaurant having limited hours, long lines at the supermarket, frustration with unresponsive customer service and increased wait times to see a doctor. The U.S. Chamber of Commerce estimates that Utah loses more than ONE BILLION dollars every year in economic activity due to disruptions caused by workers' child care problems. 

In addition, the Utah kids who are in childcare settings today, are the future leaders of our communities. They will be the students at our state universities, and the employees in our workforce. We should all think of childcare and preschool as critical early learning opportunities that can help to create a level playing field for all Utah children, regardless of their socioeconomic background or family of origin. 

Why does child care cost so much?

Ensuring the health and safety of multiple children from different families, while also providing social and educational opportunities, costs a lot of money. Like any other business, child care programs must pay for rent, utilities, insurance, licensing and staff. Other child care expenses include: food, learning materials, indoor and outdoor toys, equipment such as high chairs and cribs, safety fences, on-going professional development and more. 

Most child care businesses produce little or no profit for the business owner. Typically, only the larges child care companies, with multiple sites and centers, are able to operate profitably. In small child care businesses, where the business owner is also the person providing direct care to children every day, that owner may make as little as $2/hr after all other expenses are paid. 

Staffing is almost always the greatest expense for childcare businesses and non-profit organizations. Having attentive, experienced and caring staff members is absolutely critical when caring for others' children. We know that most of a child's brain development happens by the time that child is five years old. That means the people who are reading to, playing with and cuddling kids in child care settings are having a profound impact on those kids' lives. Trying to care for too many children, without enough attentive adults to actively engage with them in a positive way, is not good for children's physical, emotional and social development.

Why is child care so hard to find?

Child care is hard to find because there are not enough child care programs in existence to meet the needs of Utah families. 

Child care programs are expensive and difficult to run. Working with multiple children, from different families, for hours at a time requires incredible skill and stamina. The rewards for providing this care are very minimal. Child care providers make little money with no benefits. They are often disrespected as "babysitters," with no regard for their critical role in the healthy development of our youngest Utahns. 

There are few material or social incentives for people to get into the child care business. Fewer people are entering the field of early childhood care and education each year. Workers can make a higher hourly wage at a fast food restaurant, or working at a hotel. That means, there are not enough child care programs to serve all the people that need them. 

Many child care programs have waiting lists, and are unable to expand to serve more children. Child care programs can only responsibly and safely serve a limited number of children, based on available staff and space. Most people do not want to leave their child in a room full of children, of all ages, with a single stressed-out adult. Sadly, this is the only choice for some desperate working parents. 

How is the government involved in Utah's child care market?

There are many other ways the government interacts with the child care system. State colleges and universities have certificate and degree programs that help to train childcare professionals. There are rules and laws at the city and county levels, too, in addition to those imposed by the state. The most important ways the government is involved in childcare, though, are: 1) licensing, 2) subsidies and 3) grants.

First, the state government is in charge of giving licenses for child care providers to operate in Utah. If a person wants to be paid to care for more than six children that aren't their own, they need to meet certain basic health and safety requirements set by the state's Office of Child Care Licensing. The government also makes professional development opportunities available for licensed child care providers, to help them keep their skills and knowledge up to date so they can best serve the children in their care. The educational opportunities are supported by Utah's Office of Child Care. 

Second, the state government uses public funding to help a very limited number of families pay their childcare expenses. Children who from come families that have very low household incomes and meet other requirements are eligible to receive a childcare "subsidy," which is paid directly to the childcare provider, to help cover most or some of the cost of childcare. In Utah, families must apply to the Department of Workforce Services on behalf of their children to be considered for a childcare subsidy. While the state handles the childcare subsidy program, the money that funds the subsidies comes from the federal government.

Finally, the state government often provides grants and other funding opportunities that help childcare providers start, expand and improve their childcare programs. Since the beginning of the COVID pandemic, the federal government has given hundreds of millions of extra dollars to Utah, to help keep childcare businesses open. Government support in the form of grants and other support paid directly to childcare providers are critical to keeping childcare expenses from getting even higher than they already are. 

Why can't the free market fix our child care problems? 

Child care is commonly referred to as a "market failure" or "broken market." That means that the value of what is provided - the care of children - is higher than the amount the people who need it - parents and families - can afford to pay. Nothing is of greater value to parents and families than the safety and happiness of their children. Many families wish they could afford to have a parent or other family member to stay home with young children, hire a private nanny, or put their child in the highest quality child care program available. 

But most families don't have that kind of money. They have to find child care that they can afford, and that is close enough to their home or workplace. Many families already pay as much for childcare as they do for their rent or mortgage - even when their childcare providers are barely making ends meet. The incentives - financial, social and otherwise - are not great enough for the private sector to supply enough child care services to meet the demand for those services.

Parents can't afford to pay more. But childcare workers can't afford to charge any less. Something or someone has to fill the gap.

Imagine if everyone had to pay to send their child to school, from kindergarten through twelfth grade. It would never work! Currently, only a small percentage of the population can afford to send their child to private school, with very few low-income children receiving scholarships to such schools. If every neighborhood school was a business, charging by the week or month, parents would be in a world of trouble, trying to figure out how to pay school tuition for their children all on their own. That is the situation parents and families face with childcare right now. 

How do child care "subsidies" help families afford child care? 

A child care subsidy is a benefit that some low-income families in Utah can get from the state government. Child care subsidies are meant to help low-income parents cover the cost of childcare while they are working, looking for work or training for work. 

While the Utah Department of Workforce Services is responsible for giving out these subsidies, the funding for the subsidies comes entirely from the federal government. Every year, Utah receives hundreds of millions of dollars from the federal government's Child Care and Development Fund to support our child care system. At least 70% of this funding must be used to help families directly through child care subsidies. 

Before COVID, only families making less than 56% of the state median income (SMI) could qualify for a child care subsidy. That is $52,463 for a family of four people. 

Additional federal funding during the COVID pandemic has made it possible for families up to 85% of SMI to get child care subsidies (or $79,620 for a family of four). 

For a two-parent family to be eligible, one parent must work at least an average of 15 hours per week and the other parent must work at least an average of 30 hours per week. A single parent must work an average of 15 hours per week to qualify for a child care subsidy.

Child care subsidies are paid directly to a childcare provider when a subsidized child enrolls in their child care program. If a child doesn't attend a child care program at least eight hours a month, the child care provider must pay back the subsidy to the state. 

A child care subsidy payment usually does not cover the full cost of child care tuition. Currently, the state only pays up to 75% of the market rate charged in the region where a child is enrolled in a child care program. The parents must also pay a "co-pay" that is calculated based on their income level. In addition, the child care provider may charge a family the difference that is left over, after the subsidy and co-pay are paid. 

Why is there a "funding cliff" threatening Utah's child care sector?

During the COVID pandemic, the federal government gave a lot of extra money to each state, to help keep child care businesses open so parents could continue to work. Utah received close to $600 million in extra federal funding, starting in 2020, after the global pandemic began.

This money will soon be completely spent. By June 2024, Utah will run out of money for almost all of the COVID-era support for our child care system. Without the extra support, child care programs throughout the state will have to 

1) raise tuition dramatically; 

2) drop worker wages from $15 an hour to pre-pandemic levels of between $10 to $12 an hour); or 

3) close their doors completely. 

The extra federal funding Utah received since 2020 has been used to help Utah working families in a lot of different ways, such as: 

Starting in mid-2023, low-income families will have to begin paying subsidy co-payments again. Before the end of 2023, the Office of Child Care will start to phase out the special grants that have been critical to stabilizing child care programs throughout the state. Education and professional development opportunities for child care providers, which have been paid for with COVID funding, will have to be scaled back. 

Before the pandemic began, Utah only had enough licensed child care to meet about 35% of our state child care needs. People in the child care sector fear that this number will drop even lower when money runs out in 2024. That means child care in Utah will become even less affordable and harder to find than ever. 

How do child care issues impact our state economy? 

The U.S. Chamber of Commerce estimates that every year, Utah's economy loses about $1.36 billion due to disruptions in child care access for working parents. The state could be collecting as much as $258 million in tax dollars, that would otherwise be paid by working parents who are struggling to figure out their child care arrangements on a regular basis. 

Employers lose around $1.1 billion each year because of the staff turnover and missed work caused by families' child care issues. Employees sometimes have to quit their jobs because they can't find a child care arrangement that works for their family. They also sometimes have to call in sick, or arrive to work late, to pick up the slack when their child care falls through. 

People who own homes and property in Utah are also missing out on additional money due to Utah's lack of accessible quality child care programs. Research shows that the availability of early childhood education programs can attract homebuyers and increase property value. For every dollar the government invests in local child care and preschool programs, homeowners can reap up to $13 in benefits.