Child care plays a critical role for ensuring families can work and helping children get a healthy start to their developmental process. In Kentucky, it’s also responsible for $810 million in economic activity and over 26,000 jobs. However, as detailed in a new study by the Economic Policy Institute (EPI), pay in the industry is low, affecting the quality of care available and the well-being of child care workers.
According to the study, most child care workers are 23 – to- 49 years old and have completed some college. The overwhelming majority (95.6 percent) are women.
Nationwide, child care workers earn 23 percent less on average than workers with similar characteristics in other industries. They also rarely receive benefits — only 15 percent of child care workers get health insurance through their jobs, compared to 49.9 percent of workers in other occupations. Only 9.6 percent are covered by a pension plan, compared to 39 percent of workers in other jobs.
Low pay means many struggle to get by: 14.7 percent of U. S. child care workers live below the poverty line, compared to 6.7 percent of other workers. In Kentucky, child care workers earn a median wage of only $18,621, which is less than the $25,591 a single person in the state needs for a modest yet secure family budget, according to another EPI study. Eighty-eight percent of child care workers in Kentucky don’t make enough to make ends meet where they live 1.
Child care workers with families have it hardest. Ironically, many child care workers can’t afford the cost of child care for their own kids. In Kentucky, the median child care worker needs 33.9 percent of his or her income to afford infant care.
Kentucky provides child care assistance for low-income families through the Child Care Assistance Program (CCAP). This program allows families to receive care for a co-payment depending on their income and the state reimburses the provider based on a number of factors.
However, reimbursement rates are low. The standard for child care assistance reimbursements to providers is the 75th percentile of current market rates, but Kentucky only pays providers at the 68th percentile of 2005 market rates. And the Kentucky child care market in general is depressed by the low wages of Kentucky workers paying for that care. With over 24,000 children participating in CCAP, low reimbursements further depress what Kentucky child care workers earn. CCAP is currently funded at only 70 percent of its pre-recession levels when adjusted for inflation.
- EPI did not measure beyond 90 percent or below 10 percent if an area was beyond those two benchmarks, and nine of the 13 areas in Kentucky were beyond 90 percent who could not afford their community’s cost of living based on what they earn. ↩