The Childcare Crunch: How NC’s Childcare Crisis is Putting Families and Businesses Between a Rock and a Hard Place - WNC Health Policy Podcast Ep. 9

Photo by Sarah Chai

North Carolina is facing a childcare crisis, with limited access, high costs, and workforce shortages impacting families and the economy. Overall, North Carolina's childcare gap contributes to a $5 billion annual economic loss, affecting workforce participation and local revenue.

And the impacts of Tropical Storm Helene have only worsened that situation, as Western North Carolina’s childcare centers, schools and other providers have either closed or face reduced capacity due to worker shortages, regulatory burdens, and/or damaged structures. As of Dec 1, over 500 childcare slots were unavailable due to center closures. Weeks later, three other centers were “operational” (i.e. their license was open) but were unable to provide care due to staffing shortages or other concerns, and seven were centers operating out of emergency locations. Additionally, confusion around the nature and implementation of regulatory flexibilities provided for by Gov. Cooper’s Oct 9 Executive Order 319 designed to support childcare providers in reopening further delayed that process. (via EducationNC)

All of this has left parents scrambling to find care so they could return to work, deal with the impacts of the storm (including securing new, safe housing or finding a job to replace those lost), attend doctor’s appointments, and otherwise navigate day-to-day life in WNC post-Helene.

Shorter-term solutions such as stabilization grants and public-private partnerships are helping, but long-term investment is needed for sustainable results. Creating a sustainable, affordable and accessible childcare system for all who need it is not just important—it is absolutely essential to keep our healthcare systems, employers, workforce, and economy functioning. Without bold, immediate action to establish effective and lasting solutions, WNC’s recovery from Tropical Storm Helene could falter, threatening both the region’s short- and long-term economic stability and growth.

In this feature piece, produced in conjunction with the Western North Carolina Early Childhood Coalition, WNC HPI’s audio producer Andrew Rainey talks with Greg Borom (WNC Early Childhood Coalition), Susan Rotante (Parent Advocate), Samantha Cole (NC Department of Commerce) and Neil Harrington (NC Child) to explore the past, present and potential future of childcare in Western North Carolina.

Listen via the audio bar above, or via Apple Podcasts or Spotify

Transcript

AR: Andrew Rainey (WNC HPI)

GB: Greg Borom (WNC Early Childhood Coalition) 

SR: Susan Rotante (Parent Advocate)

SC: Samantha Cole (NC Department of Commerce)

NH: Neil Harrington (NC Child)

INTRO

[Sounds of a childcare setting]

AR: If you’re a family with small children in NC and are struggling to find childcare in your community, you’re not alone. While it's not a new issue in NC, childcare access is harder now than it's ever been, says director of the WNC Early Childhood Coalition, Greg Borom:

GB: If you have a young child right now, especially infant/toddler, you unfortunately claim the award for it just being the hardest. It’s the most expensive, it’s the hardest to find, it’s the most challenging I think that it's ever been. . . 

AR: The stress of inaccessible and unaffordable care is making parents across the state, like Susan Rotante, make difficult decisions:

SR: Mom of two under two. Currently living in a childcare desert in Buncombe County. I currently have a 2 year old and a 11 week old and in my time of being a mom, it feels like there’s almost no care available.

AR: Without many childcare services, parents have to get on waitlists for existing facilities even before their children are born:

SR: I got on a waitlist when I was 12 weeks pregnant. It’s a crapshoot. Right? so I think the difficulty in finding childcare has definitely affected my decision to have a second child.

AR:  Susan eventually decided to have a second child, but not without financial stress on her family:

SR: I was previously in a role in a hospitality corporation and, you know, when I was not able to find childcare and I love to work and I liked my job, but we made the decision that I would leave, so I left my job last summer and that was a really difficult decision for me to make.

WORKFORCE IMPACTS

AR: The implications for individual families can include impacts on household income, housing, healthcare, and a variety of social determinants of health. But, beyond families with small children, the absence of childcare also has broad economic impacts, including workforce shortages and lower state tax revenue. As childcare business liaison of the department of commerce, Samantha Cole spoke with the WNC HPI to shed some light on the economic impact of and policy potential for NC’s childcare crisis.

SC: So we know that childcare access is not just an issue that impacts women, children, families, it’s a very serious workforce and economic development challenge.

Over the last several years I got to hear a lot of direct feedback from employer organizations who are struggling to fill available roles, let alone find the talent that they would need if they wanted to expand their presence in WNC.

Of course, there are issues like housing, the cost of living, transportation, but I would say that one of the things that I heard about most frequently is the lack of access to affordable, high-quality childcare for people who we want to be recruiting into these well-paying, rewarding jobs with local employers, and not just in this community, but in communities across the state

AR: The childcare crisis is impacting parents' ability to join the workforce and as a result, also increasing our statewide labor shortage, proving that the childcare crisis in NC has a high cost on the state’s economy

SC: So back in June, we were able to see great research come from the NC Chamber, the US Chamber of Commerce Foundation, and NC Child that helped indicate what the costs are to our state’s economy year over year based on having an inadequate childcare supply. And these are costs that come not only from lost local and state tax revenues but also from the high cost of turnover and worker absences associated with lapses in care that working parents face. That sticker price is north of 5 billion dollars per year.

AR: That’s billion with a ‘B.’ . .  This high cost makes it increasingly a priority for lawmakers but before addressing it through policy it's important to identify what the specific problems are.

SC: I think the childcare problem is really a cluster of problems. And I’d say one of the more significant of those 2 or 3 really big problems is a lot of childcare providers don’t have the ability to pay the kind of wage to early childhood educators that they need to be able to recruit people into that profession and retain them.

And then of course there are other issues associated with just not enough capacity to serve all the families that need to access care.

AR: And this capacity is shrinking, 

SC: In the past year, we saw 100 licensed childcare providers close. And then the very high cost of tuition.

AR: Since the pandemic, problems 1 and 2 — the childcare workforce and facility capacity — were maintained by federal funding called stabilization grants. That money ran out earlier in 2024, but was given a 6 month extension by state lawmakers through the end of the year. The N.C. House of Representatives passed another bill on Nov. 19 of 2024 to extend grants for childcare centers through March- a temporary solution to keep the current childcare workforce, but one that will need to be revisited again in the spring.

SC: So we're now looking at childcare stabilization grants sunsetting again, so I think giving strong consideration to replenishing childcare stabilization grants is going to be very important.

AR: Beyond the stabilization grants to pay childcare workers, other policy ideas look at making it easier for people to join the workforce:

SC: So there are a lot of really important ideas moving forward, especially around making sure that folks can have the smoothest possible pathway to consider and enter early care and education as a profession.

We would love to see additional funding for SmartStart.

We would love to see funding that covers the costs of securing required credentials for early care and education careers like CPR or first aid and background checks- anything that can make it more possible for more people who are skilled, passionate about providing early care and education to enter the profession and stay there, is I think a public investment that should be considered.

POLICY AND OTHER SOLUTIONS

AR: After stabilization grants and workforce development policy there also remains our third problem, which is the staggering cost of childcare facilities for families. Many families rely on providers who accept childcare subsidies from the state to lessen the financial burden. However, because the subsidies issued by the state are not equal across all counties, it creates an unstable market for childcare providers. Here’s NC Child’s Research Director, Neil Harrrington, with more:

NH: Right now, the way that childcare subsidy rates are calculated is based on 100 different counties, right?

So, the reimbursement rate for a 5-star provider serving an infant in Buncombe County, for example, is going to be different from what the reimbursement rate for a 5 -star center serving an infant in Haywood County would be even though the cost for providing care really isn’t that much different between those counties.

AR: It turns out that difference in reimbursement can be as much as $715 per child, forcing providers with lower rates to turn subsidized children away. As a result, a statewide subsidy floor, which prevents such different rates across counties, may be one policy adjustment that improves the market’s sustainability.

NH: So the state wide subsidy floor would basically set a minimum amount that childcare providers receive for serving kids on subsidies.

AR: Beyond funds towards stabilization grants, workforce development, and a subsidy floor, another support to childcare centers in NC includes partnerships with the private sector:

SC: One that I'd like to talk about within WNC is a public private partnership ongoing among Biltmore Company, the large hospitality employer, and Buncombe Partnership for Children. Biltmore Company was able to go to Buncombe Partnership for Children and say, “we know that this is a significant problem for our workforce, we want to figure out how we can get involved. What are your suggestions?” And Buncombe Partnership for Children was able to reply to them and say, “you know what? We have a number of providers right here in Buncombe County, it's just that they’re just not able to enroll enough children up to the capacity that they’re licensed to serve because they have some unmet expenses standing in their way.”

So rather than focusing on whatever it would take to build a new space, they said, “Why don't we fill to full capacity the centers that we already have operating.” And of course, this isn't going to be something that is going to yield that many new infant and toddler slots year after year, but 

But the truth is, thats still such an impact because not only does the employer organization that came to the table get waitlist priority for their own workers, but that means a shorter waitlist for everyone who's on the waitlist for a slot at that center. It means that there's just more care available for more families, period. And I think that's a wonderful example of a public private partnership that's not waiting for a perfect solution. They're looking at what they're capable of changing and what they’re capable of addressing today.

AR: While there are some examples of businesses who both recognize the impact childcare has on their workforce and also have the money to build childcare capacity around them. At the end of the day, it will take more than public private partnerships to fully address NC’s childcare access problems.

SC: As excited as I am about the really innovative public private partnerships that I'm seeing in different parts of the state, the truth is, employer engagement and community engagement in solving this problem, has to be matched, if not exceeded by considerable public investment. 

AR: WNCians in particular, as we recover from Hurricane Helene and greater stress on our childcare providers, workforce, and infrastructure in general, will need even more of this kind of investment, as many residents and businesses alike weren’t even able to receive a paycheck for over a month and many businesses remain closed. Whether it's for our region out west, or communities across the state, we’ll need to keep exploring policy ideas for childcare for the health and wellbeing of our children and families, as well as the economic status of our state.  

To learn more about the childcare crisis and policy work in our state, you can visit the HPI website at www.WNCHealthPolicy.org

From the WNC HPI, I’m Andrew Rainey.