Day-care squeeze hits rural families

MONTEVIDEO, Minn. – Eight months before her due date, Angie Steinbach started calling day cares to reserve a spot for her baby.

Nobody had an opening as far as Marshall or Willmar — both a 45-minute drive away. Steinbach got on waiting lists "behind people who hadn't even conceived yet," she said.

When Steinbach's boy was born, her husband — who had just earned a degree in computers — planned to stay home with their son. The couple didn't find a way for them both to work until a relative tipped them to an opening at a child care in Granite Falls.

"You just don't realize until you actually experience it firsthand just how bad the shortage is," said Steinbach, community development director for the city of Montevideo.

Large parts of rural Minnesota don't have enough child care for working families. Finding a place for newborns is especially difficult. And it's not just a parenting challenge, it's an economic problem.

More than one in 10 parents statewide, and one in five poor parents, report that child-care problems have kept them from getting or keeping a job in a given year. When parents can't work for lack of baby-sitting, businesses struggle to fill jobs, young mothers and fathers miss out on precious wages and a thin rural labor force gets thinner.

"How could it not, if you have good employees and they don't have anywhere to put their children?" said Ann McCully, executive director of Child Care Aware. "We still have a pretty good population of folks that use grandma, and auntie and neighbors and that kind of thing, but most of those folks have to work too."

David Clusiau, owner of a car dealership in Hibbing, sees his employees miss shifts because they can't find steady child care. "What I hear is that my valued employees can't come to work, because they have no place to leave their children today," Clusiau said. "They really have no choice."

Many businesses are trying to adjust and fill the child-care gap in some way. Digi-Key, an electronic parts distributor in Thief River Falls, offers extra cash to day cares that will extend their hours into the evening for second-shift workers. The Gardonville Telephone Co-Op in Brandon is opening its own day-care center.

The problem in Montevideo became so severe that the city helped pay for Trisha Hering, director of the nonprofit Kinder Kare, to add a room at the early childhood center on the south side of town to serve 12 infants.

"If you have a child right now, you have to quit your job, because there is nothing available," Hering said of the area around town.

She will open the infant room in September — all the spots are full.

In Minnesota, 74 percent of children under 6 have both parents working, compared to a national average of 65 percent.

As a result, demand for day care across the state is deep, but somehow, there's not enough supply. The market for child care in rural parts of the state, especially infant care — isn't working. Profit margins in child care can be as low as 10 cents per child per hour in the Twin Cities, and rural child-care businesses often operate at a loss.

The new infant room in Montevideo, on its own, will lose money, Hering said. Even with $10,000 from the city to build and equip the room, it will run $2,125 negative per month at $140 a week per infant, she said.

"The need is so dramatic out here, that if there's a way to make it happen, we're going to make it happen," she said.

Overall, the nonprofit will be able to break even. Hering is raising rates slightly on preschool children, who require less staff to care for. Also, the school district discounts Kinder Kare's rent, while the city and county together will pay $18,000 of the $24,000 annual lease.

In Minnesota, about 186,000 children under 6 live outside the Twin Cities, where families pay about 75 percent of the going rate in the metropolitan area — $132 weekly for in-home infant care, compared to $175 per week in the metro area, according to Child Care Aware Minnesota. Workers in southwest Minnesota, however, earn only 61 percent of what the average worker in the Twin Cities earns — $661 weekly compared to $1,087 per week in the Cities.

"Parents can't pay out of pocket any more than they are, providers can't afford to charge any less than they are," McCully said.

Because of tight margins and relatively stagnant wage growth, choosing child care in rural Minnesota can become a difficult balance between the desire for quality care and financial or geographical realities.

The problem of overcrowded and unregulated day cares was brought to light by the Star Tribune's 2012 reporting on unsafe — and sometimes deadly — day cares.

The regulations are stricter now and better enforced, but quality still varies, and the good day cares fill up fast. Providers are incentivized not to take on infants, who are the most costly to care for and tightly regulated, said Mary Franson, a legislator from Alexandria who used to run an in-home day care.

She said most child-care providers do an excellent job, but the already tough business of caring for babies has only become more difficult thanks to increased training requirements, and variation in how counties interpret rules on holding sleeping babies or staying within earshot of them.

"Rising costs stem right back to rules and regulations the state imposes on child-care providers," Franson said. "But yet child-care providers can't raise costs, because wages aren't rising."

Even for parents who can afford day care and find a spot for their child, the uneven quality of what's available can cause paralyzing worry at work.

Jessica Olesch, who lives near Marshall, returned to her job as a bank credit analyst in March after having a baby boy. She called 40 child-care providers that were full or didn't call back. Finally, a local child-care business was able to get a two-month variance from the state to add an extra spot for her son.

When that variance expired, Olesch had to start over. The next day care she found for the 4-month-old boy made her feel uneasy, but she had no choice.

"It was completely terrifying to have your baby away from you and with someone you didn't fully trust," Olesch said. "But we were in a terrible spot. We needed to work and that was the only day care with an infant opening."

She pulled him out this summer and platooned child-care duties with baby sitters, her husband and her father — all of them burning vacation time until they found a new spot earlier this month.

Quality day care doesn't just help parents work, advocates say — it helps prepare children for school.

Kids who show up at kindergarten ready to learn require less remedial work and in the long run tend to earn more money, pay more taxes, and commit less crime, said Rob Grunewald, an economist at the Federal Reserve Bank of Minneapolis who's been researching the economic development implications of early childhood care and education for years.

When child care is lacking, the spark that early education provides is even less available to poor children, said Heidi Hagel Braid, the Minnesota director for First Children's Finance.

"When it's not available to families who can't afford it, that's an even bigger problem," Hagel Braid said. "If you are a poor kid in greater Minnesota, that means you have even fewer options available, and you're at the most risk of not being ready for kindergarten."

Roughly 74,000 Minnesota children under 6 live in poverty. About 31,000 children statewide received child-care assistance in 2013, but public money is helping in other ways.

The Legislature allocated $46 million for scholarships in 2013, which will help pay for some 10,000 kids to get child care. A federal Race to the Top grant for another $45 million will pay to improve early learning opportunities statewide.

Ann McCully, at Child Care Aware, said the new funding is good, but many parents, especially those in rural areas, still can't pay enough for child care to make it a viable business.

"The funding is much more than we've ever had, which is great," McCully said. "The fear is what happens when interest in that potentially wanes. There's always the nervousness in our community — are we the shiny object of the moment?"

Franson, the legislator, said the regulatory environment is partly to blame for the shortage, and the paperwork has become too much of a hassle. Until the economy strengthens, wages rise and the economics of caring for babies start to add up, parents will struggle to find good care, she said.

"The state can increase funding all they want," Franson said, "but that doesn't solve the shortage issue."

Adam Belz • 612-673-4405 Twitter: @adambelz