How Inflation Is Squeezing Early Childhood Educators

Early Learning

How Inflation Is Squeezing Early Childhood Educators

Rationing heat, taking on extra jobs, dipping into savings, raising wages for staff — child care providers are using a mishmash of methods to manage rising prices and keep their doors open.

By Emily Tate Sullivan     Dec 20, 2022

How Inflation Is Squeezing Early Childhood Educators

In Montana, Sheryl Hutzenbiler has noticed the price of eggs skyrocketing. Just a few weeks ago, she could buy five dozen for $11. This month, she paid $23 for the same amount.

For Winifred Smith-Jenkins, in New Jersey, it’s those 5-ounce disposable cups that she buys for the kids in her early childhood center. Where she lives, they’ve increased from $19 to $30 for a 1,000-pack, which her staff and kids burn through quickly.

It’s the rising price of fresh produce for Taunya Sims, who has so far resisted switching to canned fruits and vegetables. She knows fresh food is much healthier for young children, and they like it more.

Ask any child care provider about the rising cost of goods and services this year, and they’ll tell you where they feel it most. Milk and eggs. Paper towels and cleaning supplies. Meat and produce. Utilities that keep the lights on and the water running.

“It’s been shocking,” says Hutzenbiler, the owner of a child care facility in Billings.

“The money just does not go as far. It doesn’t,” notes Danielle Caldwell, a home-based child care provider in North Carolina.

In June, inflation in the United States reached 9.1 percent, the highest rate in 40 years. Nearly everyone in the country is feeling the effects of that one way or another, yet as with so many other challenges, the burden is not borne equally.

Among those most acutely impacted by inflation are early care and education providers, who by virtue of the work they do, are frequently and voluminously buying many of the items that have undergone precipitous price hikes. In November, electricity was up 13.7 percent nationally from the same period last year, while natural gas was up 15.5 percent, according to the Consumer Price Index. Meanwhile, groceries were up 12 percent, with juices, dairy and cereals—all items a child care provider might serve to young children—recorded even higher.

Given that most providers are barely keeping their businesses afloat as is, and most have yet to rebound from the pandemic, which decimated the early childhood workforce, a few extra dollars for recurring expenses like paper towels and diapers is closer to an existential threat than an occupational inconvenience.

“Inflation is just sort of layering on top of the struggles that educators and providers have been having,” says Wanzi Muruvi, senior research and policy associate at the Center for the Study of Child Care Employment (CSCCE) at the University of California, Berkeley, noting how the pandemic pushed the sector to the brink of collapse and that it has only survived so far because of significant public investment.

“Given the way inflation is really biting—rents going up for everybody, grocery store prices going up each time you go back, things doubling and tripling in prices—this has a crippling effect” on the sector, she adds.

The Impact on Child Care Providers

Child care providers describe using a mishmash of methods to make the math work so they can keep their doors open and retain staff during this period.

Hutzenbiler says she’s had to raise her teachers’ wages from $11 an hour to $15, not only to keep existing staff but also to attract new ones. It’s the only way to be competitive with other businesses that are hiring, she explains, but it hasn’t been easy.

“Not only do wages go up, but payroll taxes go up, too,” Hutzenbiler says. “This month is the first time I’ll actually have to pull money out of savings to cover payroll. There wasn’t enough money from [government subsidies] and from family tuition.”

At the same time, her grocery bills, utility bills, liability insurance and expenses for other necessary supplies are up, too.

“I shouldn’t be having to pay as much as I pay, weekly, for my grocery shopping,” Hutzenbiler says. “It’s insane. My food expenses have tripled.”

Hutzenbiler, along with several other child care providers interviewed for this story, participates in a federal food program that provides reimbursements for meals and snacks served to children. But all of the providers say that the price of groceries has risen so steeply that the food program’s per-child reimbursement rate no longer covers the full cost; many are paying hundreds of dollars out of pocket per month for food.

Sims, the owner and director of a family child care program in Lansing, Michigan, says she has tried to get creative about lowering costs without raising rates on families. She used to provide diapers, wipes and formula to families without question. “I had to change that,” she says. She asked families who could afford it to start bringing their own, and to pay a $15 monthly fee to cover materials for arts and crafts.

“It really makes a difference,” says Sims, who estimates that she was spending $35 to $100 a week on diapers and wipes alone. “And it takes some of the stress off of me to make sure I have enough items.”

Other directors, like Smith-Jenkins in New Jersey and Deyanira Contreras in New Mexico, are devoting hours each week to comparing prices from different vendors. Contreras, whose child care program is part of Santa Fe Community College, says it’s a never-ending search because the vendor with the lowest price one week may have hiked up prices by the next week, prompting her to start all over again.

Caldwell, the owner and sole employee of a home-based child care program in Durham, North Carolina, has had to make a number of adjustments to stay open. In addition to prices rising on everyday goods and services, the rent on the house she lives in and operates her program out of has increased $700 per month since 2020.

To counteract her expenses, she’s raised the price of tuition for families, from $185 a week before the pandemic to $250 now. She’s taken on a couple of part-time jobs, one as a community surveyor for her city and another doing data transcription. She’s also trying to cut back here and there to lower the grocery and utility bills.

“I find myself letting the heat stay on to warm up, then turning it down, now that it’s getting colder out. I conserve my heat,” she says. And at meal time with the kids, “seconds and thirds are happening less often.”

Muruvi, of the CSCCE at Berkeley, says Caldwell is one of many early childhood educators who has had to take on multiple jobs to survive. In her research, Muruvi has learned of educators shopping at food pantries, couch surfing or living in their vehicles when they can’t afford food or secure housing. She has also found that some educators have had to dip into “any little savings they had,” or go into greater debt, just to meet their basic needs.

“Educators have very little fall back. Few have nest eggs or retirement savings,” Muruvi says. “Educators were already relying heavily on income support programs to make ends meet [before the pandemic].”

She goes on: “It is important for us to acknowledge that the sector is very fragile, very vulnerable, to any event that shakes or destabilizes the economy. … The very little they are earning is being stripped away by inflation.”

The Impact on Early Childhood Educators

Many providers that outlasted the worst of the pandemic have faced countless subsequent assaults on their operations: educator burnout, staff shortages, enrollment reductions. Inflation seems to be compounding many of those existing challenges.

One of the most obvious ways that’s playing out is with staff. The teachers in child care programs are paid so little—an average of $13.22 per hour nationally, according to the U.S. Bureau of Labor Statistics—that they, especially, are feeling squeezed by rising prices. In turn, many have asked their directors for raises, often out of necessity. Others have left the field for better-paying opportunities.

Sims, in Michigan, says two of her most important teachers have been asking her for several months now if there’s any way she can pay them more.

“We’re just trying to keep our doors open, to be honest with you,” Sims admits. So she has had to tell her staff that no, there is no way for her to boost their pay right now. (She starts employees out at $13 an hour and then bumps them to $15 when they earn their Child Development Associate credential.)

Instead, Sims provides one-time incentives and rewards where she can. In November, she gave out $150 bonuses after the program enrolled two new children. Earlier in December, her husband gave everyone $25 gas cards.

“This is to retain them,” she explains. “I’m doing what I can to retain who I have. My staff is an investment in my program, in my children. … [But] everyone’s pay is where it has to be right now.”

Smith-Jenkins, director of an early childhood program in East Orange, New Jersey, recently lost a teacher who took another job as a truck driver. She has begun offering a stipend to teachers who use public transportation to get to work and is considering creating one for drivers, to cover the cost of gas. But those efforts are inconsequential compared to what prospective teachers are asking for, she says.

Her program is part of a system of three family child care centers in New Jersey. They’re currently serving a combined 380 kids, out of a classroom capacity of about 500.

“The only way to accept more students is to hire more staff,” she explains, but “the people we’re interviewing now walk through the door saying they want $30 an hour—something crazy—and we’re looking at each other like, ‘What are we going to do?’”

It’s a long-standing tension in the field: Parents can’t afford to pay more, educators can’t afford to make less, and providers are operating at the thinnest margins just to keep their businesses alive. It’s a no-win situation, Muruvi says.

“If we avoided a potential COVID-induced collapse with substantial public investments,” Muruvi asks, “how are we going to avoid this potential inflation-induced collapse, which is just adding on to the crisis?”

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