A prominent refrain in the pandemic recession-recovery story has been the persistent labor shortage seen across the United States. Coupled with mounting inflation and consumer uncertainty, restoring the economy of 2019 has been tricky for policymakers.
Even in Maine, the unemployment rate seems tame compared to the nation, but if everyone who was working or looking for work in early March 2020 was doing so today, unemployment would be nearly double.
Some point to generous pandemic unemployment benefits as a reason for the stalled labor market. An analysis by the Foundation for Government Accountability found that a low-income Mainer with two children under six-years-old, earning the median wage at 40 hours per week, would earn 11% less than they would bring home while unemployed. Indeed, state unemployment insurance (UI) payments, the federal $300 weekly UI benefit plus various tax credits, amounts to almost $400 more each month than working full-time at $20 per hour.
Compounded further, child care providers are having difficulty hiring enough staff to even open their doors. Program spots are so scarce that some parents have booked care for their children who are still in the womb.
Last summer, more than half of Maine’s child care spaces that were open during the previous January had closed. Recent reports note that 170 day care centers have closed since early 2020, which thankfully means much of those summer 2020 losses have been restored. While child care supply issues were exacerbated by the worst of the last year, Maine’s woes are not a new problem.
Over the last decade or more, parents have been frustrated with the lack of affordable child care, and for good reason. A 2018 Maine Policy Institute analysis showed the state lost one-quarter of all licensed child care providers in the previous decade. State data show the number of center-based care providers grew 13% since 2008, despite losing one-quarter of all licensed providers overall.
The sad fact is that losses predominantly fell among family care providers—those who operate their programs out of their residence. In 2017, family care was 38% cheaper than center-based care. Today, Maine has fewer than 60% of the family child care providers who were in business 10 years ago, and about half the number practicing in 2008. Working families have lost a crucial, lower-cost option.
All but one county lost at least 40%, and seven counties lost at least 50% of their family child care providers since 2008. Franklin, Lincoln, and Hancock counties were among the worst hit.
A functional market for child care is truly a foundational aspect of the economy. Like a working school system, parents need this service in order to enter and stay in the labor force. Sufficient availability of family child care—even of small, unlicensed providers—is important because it allows working parents lower cost options than center-based providers.
Especially in more rural areas of the state, where economic opportunities are limited, parents of small children need as many options as possible in order to make ends meet.
Maine legislators faced two bills this session with two different approaches to tackling this challenge: LD 1252 and LD 98.
LD 1252 proposed to codify an executive order Governor Janet Mills issued in late March 2020 allowing small child care providers to watch an additional child before a state license is required. The governor’s order allowed these providers, akin to neighborhood babysitters, to watch up to 3 children, 4 if a pair are siblings, without a license. This would have aligned Maine’s rules with most states; today, 36 states (including DC) allow family care providers a higher pre-licensure threshold than Maine.
Unfortunately, legislators voted along party lines to strike down this reform. It could have helped hundreds of working families find some much-need stability in this uncertain economy.
Instead, they chose to advance LD 98—now law— which clarified the requirement that all child care facilities must be licensed, and most notably, significantly broadened the power of the industry’s regulatory board to manage the “quality of the program of child care.”
This will likely mean more time and taxpayer resources for the board to administer the new requirement and more headaches for providers trying to survive, but with little benefit to consumers.
Gov. Mills made the right call during the height of the pandemic and shutdowns to relax (albeit slightly) the restrictions on unlicensed family child care providers via an executive order. Unfortunately, her allies in the Legislature disagree, despite negative consequences for safety and quality of care over the past 14 months.
Defenders of overbearing regulation must be asked why they continue to concentrate power in government and squeeze out the prospects of Maine’s child care entrepreneurs.