Child care crisis prevents economic growth in Greater Minnesota

After a harrowing year, we are starting to see the light at the end of the tunnel. COVID-19 cases are trending downward, vaccinations are up, businesses are reopening and children are venturing back to school. But as Greater Minnesota communities look ahead to the post-pandemic future, a stubborn barrier to economic recovery remains: a dire lack of available child care.

This problem is not new. Even before COVID-19 came on the scene, Greater Minnesota was short 40,000 child care spots. In Rock County, we need nearly 200 more spaces to meet demand. Ely needs 140. According to a June 2020 report from First Children’s Finance (FCF), the shortage impacts communities of all sizes and in all corners of the state. Here’s an estimate of the additional child care spots needed in a sampling of Greater Minnesota cities:

• Austin: 700
• Brainerd: 668
• Crookston: 245
• Duluth: 1,266
• Mahnomen: 141
• Cloud: 1,461
• Peter: 255

Major income losses during pandemic

The pandemic caused more upheaval in an already unstable industry. Providers were suddenly hit with major income losses as families pulled their children out of child care (often due to parents who lost jobs or whose work situations changed as a result of the pandemic) and business costs increased as providers adhered to new public health guidelines. While state and federal grants have helped, many providers are hanging on by a thread, and some have opted to close indefinitely.

As communities look to reopen and repair their struggling economies, addressing the child care crisis is vital. Workers cannot rejoin the workforce unless they have safe, reliable child care. Likewise, our cities cannot attract new businesses and families unless we have a strong child care system.

The child care crisis is a multilayered problem. Child care workers endure long hours, often for low wages and no benefits. In most Greater Minnesota cities you can earn more money working at the local gas station. Further, 65% of the child care capacity in Greater Minnesota is covered by in-home providers, compared to 30% in the metro area. This leads to additional volatility in the marketplace as fewer in-home providers remain in the business for the long haul.

Several bills in Legislature

Unfortunately, there is no one-size-fits-all fix. However, there are ways to begin to address this problem. The Coalition of Greater Minnesota Cities (CGMC) and Greater Minnesota Partnership (GMNP) are pursuing several bills this legislative session that aim to meet the most immediate need, which is to encourage more child care providers to join (and stay in) the industry and create more child care capacity.

CGMC and GMNP are seeking $20 million in state funding, to be matched by $20 million in local funds, for the Greater Minnesota Child Care Facilities Grant Program. This program, which was established but not funded by Legislature in 2020, provides grants of up $500,000 to local governments to help cover the costs to construct or expand child care facilities. This funding would assist with start-up and infrastructure costs, which are a major barrier to building new child care facilities in Greater Minnesota.

CGMC and GMNP are also seeking additional state investment in two existing programs: Minnesota Initiative Foundations (MIF) child care grants and DEED child care grants. Both of these successful programs, though different in scope and mission, aim to support child care providers with business development assistance, annual licensure and training assistance, and building community-centered efforts to address local care shortages.

As lawmakers in St. Paul look for ways to build back the economy, we urge them to invest in child care initiatives that will help stabilize the industry and create more options for Greater Minnesota’s working parents. Our state cannot reach its full economic potential until we address the child care crisis.

Pat Baustian is the mayor of Luverne and a board member with the Coalition of Greater Minnesota Cities. Heidi Omerza is a member of the Ely City Council and president of the Greater Minnesota Partnership.

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