The availability of affordable childcare in the region is gaining traction among key stakeholders as a major economic development issue and several regional organizations are pooling resources to address the problem.
According to information from First Childrens Finance, an organization that provides financial and business assistance to childcare providers offering services to low and middle-income families, the lack of childcare in the state of Minnesota has become an obstacle to effectively growing rural economies. Programs offered by the organization include financial assistance, business training, business development, community consulting as well as online resources.
In its 2016 study, “A Quiet Crisis: Minnesota’s Child Care Shortage,” the Center for Rural Policy outlined the problem as one with many causes:
• A rapid decline in home-based child care. While child care centers have increased to fill some of the gap, in rural Minnesota there was a net loss of 15,377 child care spaces from 2006 to 2015. During that same period, the Twin Cities metro area experienced an overall 3,284 increase in child care spots.
• Salaries and wages in the child care industry are a “huge deterrent,” with more than 85 percent of those employed making less than $20,000 annually.
• Low income households and single parent families are particularly hard hit by the shortage, with child care costs absorbing a much larger percentage of their income.
• In rural areas, it’s more difficult for child care providers to raise prices due to a lack of clients able and/or willing to pay the increased cost.
• As the job market has become more competitive, the lack of child care spots in rural areas has been a deterrent to job seekers, who instead opt for positions in the Twin Cities where child care is more available.
Area stakeholders are well-aware of the problem.
“Having quality childcare available is an absolute imperative,” said Sonja Merrild, the Blandin Foundation’s director of grants. “We have heard this call for some time from our community.”
To that end, the Blandin Foundation recently awarded grant funding to First Childrens Finance to launch a child care resource business center that will provide assistance to organizations across the Iron Range looking to create or expand childcare options. The organization already has worked with officials in Itasca County to assess its needs and is in the process of working with key players in the Quad Cities area.
While some might question why childcare centers need their own business support mechanisms, advocates, like Merrild, call the business “surprisingly complex.”
Issues arise around mandated child to worker ratios, recruiting needed workers that are increasingly short supply and a large volume of regulations that must be adhered to.
Northland Foundation Vice President/Director of KIDS PLUS Lynn Haglin added that those who enter the industry may not necessarily have all the tools they need to be successful. “People go into it (child care) because that’s where their heart is, but they may not be as aware of the associated business aspects.”
The Blandin Foundation Board of Trustees recently approved a $195,000 grant over a three-year period to fund the development of resources locally. While the Northland Foundation has contributed $33,333 this year and will revisit providing additional funding at a future date.
The Iron Range Resources and Rehabilitation Board also has allocated funds toward addressing the child care shortage, said Communications Specialist Sheryl Kochevar. The IRRRB provided $20,000 in FY18 to the United Way for child care technical assistance; $11,667 to the Northland Foundation for a child care business study; $175,000 for internal and external and HVAC upgrades to Bright Minds Academy Daycare in Eveleth; and, $260,000 for infrastructure, site work and wetland mitigation for the Mountain Iron Childcare Facility Project.
Work to expand the availability of child care in northeastern Minnesota is part of a broader statewide effort. Elsewhere in the state, the Minnesota Initiatives Foundations have partnered with First Childrens Finance to cover child care training costs and make that training locally accessible.
These efforts, said Haglin, are vital to the overall economic health of this region. “It’s (lack of child care) reaching a crisis point,” she said. “I think we’re going to have to come up with new solutions and we need the business community to come to the table.”
The Center for Rural Policy Development has identified the shortage in the Arrowhead region as particularly troubling. Here, the 9,102 available child care spot capacity is falling short of need by nearly 5,000 spaces. The child care industry needs to grow 55 percent to meet the shortfall – the highest level of regional growth needed in the state.
Further assessment of the issue is on the near horizon. The Northland Foundation, Blandin Foundation and IRRRB are jointly funding a study through Wilder Research on the economic impact of the childcare shortage in the seven county Arrowhead Region. The completed study is expected to be released in either late August or September, said Haglin.