Is employer-provided childcare the right fit for South Carolina?
Providing employees with space or subsidies for childcare programs solves a few key problems working parents often face. But as the idea catches on in South Carolina, what else should employers be thinking about?
Maybe the biggest conundrum for working parents is that you need a job in order to provide for your children, but having a job means you might need to pay someone to care for them while you’re at work.
Before kindergarten starts, working parents need to do what most consider to be a lot of unfair math in trying to figure out whether it would be less expensive to stay home with small children or pay for daily childcare.
For a little more than two years, federal money made available to states helped childcare programs weather the COVID-19 pandemic. As of Oct. 1, that federal assistance is cut off. South Carolina received $955 million through the American Rescue Plan Act, or ARPA, at the outset of the pandemic. About a quarter of that is still available to childcare providers through the state Department of Social Services, or DSS. [See this story from South Carolina Public Radio for more.]
But even with some money left, and even with DSS encouraging childcare providers to tap into the resources it offers, the ARPA money is finite. At some point, it will be gone, but the fundamental problems of childcare for working parents – most broadly broken down into lack of accessibility and affordability – will remain.
Soo, too, will remain the debate over whether eliminating (or at least reasonably reducing) the burdens of early childcare on working families should be handled by the government or the business sector, or a hybrid of both.
Some quick numbers, for context
The average cost of childcare in South Carolina is a modest mortgage payment – about $600 per month, or $6,500 per year, according to Move.org. That’s almost the least expensive in the country in terms of total price. But it’s also close to 20% of the state’s median annual per capita income of $32,823, according to the U.S. Census Bureau, from 2017-2021.
The median household income in South Carolina during that same period is listed by the Census as $58,234, which would make the cost of an average childcare program in the state about 11% of income. But A, a lot of working parents are either single parents or have only one income because they can’t afford quality childcare and, therefore keep one parent home; and B, those income totals are broad numbers at the state level – looking at only state totals ignores the fact that many counties and cities in South Carolina don’t have incomes nearly as high as the state overall.
Allendale County, the state’s poorest, in fact, has a median household income that’s $1,000 less than the state’s median per capita income.
It's also important to remember that issues with childcare predate Covid, which exacerbated problems and rewrote a lot of numbers.
A 2019 report by the Center of Budget and Policy Priorities argued for increased federal funding along the lines of SNAP, the Supplemental Nutrition Assistance Program, or Medicaid for childcare and housing because one in six children eligible for childcare assistance in the U.S. actually received it, while one in five children eligible for housing assistance received it.
In June of 2023, the Century Foundation reported that without continued federal funding along the lines of ARPA, nearly 50,000 children in South Carolina could lose access to childcare.
The Century Foundation report has been disputed by DSS, which says the writers of the report never contacted the state agency before drawing their conclusions. It is argued nowhere, however, that childcare in South Carolina is in trouble
So is it up to government or business to fix this?
Connelly-Anne Ragley, chief external affairs officer at DSS, is an advocate for industry being a bigger part of the solution to the problems childcare poses for working families.
“My hope is that we'll see more employers that want to put some skin in the game,” Ragley says. Especially among the major manufacturing companies in South Carolina, like Michelin or Giti, she wants to see an increased effort to provide either onsite childcare for employees or to provide subsidies to employees that would make childcare more affordable.
Ragley says that DSS is aware of several manufacturers in the Upstate that are considering this. She says having childcare as a perk would make businesses more competitive when hiring, especially when companies are having a harder time filling positions.
According to the U.S. Chamber of Commerce, South Carolina is among states dealing with “more severe” worker shortages.
“South Carolina has 54 available workers for every 100 open jobs,” the Chamber reported in September. In August, that translated into about 90,000 available workers and 167,000 job openings. More people get hired than quit, too, meaning that employers in the state do have a harder time than those in most other states at getting people to work for them.
While some companies make up their minds about whether to provide childcare or at least assistance for employees to get it, other companies have well-established onsite childcare programs working. Spartanburg Regional Healthcare System is one such business. Since 1979, it has provided childcare to workers at the hospital at a discounted rate.
On the plus side, it is convenient. The Ida Thompson Child Development Program is in a building on the hospital’s campus, open from 6 a.m. to 8 p.m., Monday through Friday.
“Some days I have to be at work at six,” says Lainey Donnan, a surgical technician at SRHS, who likes being able to drop off her son and still get to work on time. “If I get held up at work or if I'm on call, I know he has a place to be that is safe for him, that they have extended hours where most day cares you have to pick up by five.”
And people looking for work do seem to consider this program a benefit of employment.
“I spoke with one of our recruiters and she said she's asked daily about the availability for the childcare [program],” says Darla Pennington, the hospital’s liaison to the program (which is operated by Bright Horizons, a third-party provider). “So it's huge. And oftentimes it's the deciding factor if they accept the position or not.”
Sonya Oller, the executive director of the Bright Horizons program in Spartanburg, says that the presence of the program has “played a huge role in retention of employees because they don't want to lose their childcare space.”
Which is a plus, but also leads us into the minuses. Elliot Haspel, an author and expert on childcare in the U.S., says that one of the biggest criticisms he has about employer-provided childcare is “job lock” – the need for employees to stay in jobs that they may no longer want or like, because they fear losing access to childcare.
“In my view, running childcare through the employer/employee relationship has several problems,” Haspel says. “It creates all the issues that we have with employer-sponsored health insurance. It's inequitable. Think about the millions of people that are working in the gig economy, or Uber drivers. Think about them working for small businesses who don't necessarily have the ability to offer this kind of benefit. You're going to have massive inequity if you run it through employers.”
Haspel would rather see a system that companies would pay into in exchange for government-run programs.
“They would pay taxes to the government,” he says. “Employers pay into a public fund that would then be managed and operated more broadly and equitably, like the public-school model.”
In South Carolina, that is likely to be a hard sell. There is little discussion about most aspects of childcare at the state government level and no public discussion over what role government itself should play in providing for access to childcare.
Meanwhile, childcare options are dwindling for many parents, now that federal funding to support states has been cut off; and childcare providers face having to cut wages and raise tuition to stay afloat.