The child care conundrum

As Oregon continues to emerge from the Great Recession, some families are beginning to feel more economically secure. Oregon’s unemployment rate is lower and wages are growing faster than the national average. However, while the economy has begun to pick up steam, the struggle to make ends meet continues for many. As shown in our most recent Progress Report, child poverty remains higher and median family income is lower than at the end of the recession. Oregon’s most vulnerable families continue to struggle to get ahead. This struggle is most felt by young children. In fact, young children in Oregon are the most likely to live in poverty — an experience that hinders cognitive development and stunts opportunities for success later in life.

Source: CFFO analysis of 2013 American Community Survey 3-Year Public Use Microdata Sample

The cost of caring for young children makes it even more difficult for families to escape poverty. One of the highest costs for parents is child care, and Oregon has one of the least affordable child care systems in the country.

Source: Child Care Aware of America. Parents and the High Cost of Child Care: 2014 Report.

Source: Child Care Aware of America. Parents and the High Cost of Child Care: 2014 Report

The high cost of child care presents a conundrum for families. Without a well-paying job parents struggle to pay for child care, but without child care they cannot be available to work. But the state as a whole also faces a child care conundrum — if the expense of child care makes work economically infeasible for too many families, the Oregon economy as a whole suffers. Employment Related Day Care (ERDC) is a program designed to resolve this conflict by helping low-income families access child care for their children and remain in the workforce.

In recent years the state has scaled back ERDC in response to declining state revenue. A cap was placed on the number of families that could be served by the program, and currently almost 3,5000 families are on the wait list to receive these critical child care supports. Furthermore, the program requires families to verify eligibility every month, meaning that a parent who receives a small raise or earns more through overtime in a single month can lose the ERDC benefit altogether. This potential loss of benefits creates a “cliff effect” that can undermine the purpose of the program — instead of supporting parents’ transition to full-time, well-paying jobs, the cliff creates a financial hardship when parents do work more hours or earn more money.

The Oregon Legislature is considering strengthening the ERDC program by increasing the number of families served and minimizing the disincentive for parents to advance in their careers. HB 2015 is currently in the Ways and Means Joint Subcommittee awaiting further action and is supported by a broad array of groups, including SEIU, Oregon Center for Christian Voices, Oregon Association for the Education of Young Children, Portland Community College, and the Oregon Business Association. Increasing the funding for the program overall is vital to reaching all those families still recovering from the Great Recession who hope to take advantage of the job and wage growth the state is experiencing. The bill would also adjust the requirements to determine eligibility annually, not monthly, thereby providing greater certainty and smoothing out benefits for families that may have regular fluctuations in their income. Finally, the bill extends ERDC to cover parents in school, providing greater support to parents who hope to pursue careers with family-sustaining wages within a few years.

HB 2015 is an investment in Oregon’s current and future workforce. By expanding the program and providing stability to families’ eligibility, more parents will participate in the labor force and help grow Oregon’s economy. By helping place young children in high-quality child care settings, the state makes it more likely that students will be prepared for school and earn more in their careers. As the legislature considers competing budget priorities, it is vitally important that they ensure that all families have equal opportunity to benefit from the improving economy. Without action on ERDC we as a state risk closing families off from work opportunities and allowing children to languish in poverty.