Editor’s note: This is the second article in a multi-part series unpacking the effects of the shortage of quality, affordable childcare in Seward County on families, the local economy, employers, care providers, educators and children.
When he lost a key part of his business – an outstanding manager – local business owner Scott Dinslage reluctantly had to start the search for someone new.
“I had a manager who while working here, she and her husband became pregnant. She went on maternity leave, then she was reluctant to come back,” Dinslage said. “I told her, ‘Why not just try any amount of days per week, whatever you’re comfortable with, and bring the baby.’ For three to four months, she brought her baby to work every day.
Dinslage owns and operates The Alps Bark Park in Seward, which provides daytime and overnight care for dogs.
He said the Alps manager was an integral part of the business, and he tried the best he could to accommodate her young family in ways most business owners don’t or can’t.
He bartered. He helped her search. He even offered to pay for childcare. The problem was finding an open spot with a quality provider.
Deemed a “childcare desert,” Seward County has a disparity when it comes to the number of children ages 0-5 that need care while their parents work – about 799 children – and the number of licensed spots available – only 610.
The gap of 189 spots is affecting parents’ ability to work, collectively leading to almost $2.7 million of lost household income each year and more than $1.6 million of added costs to Seward County businesses, according to an analysis by local economist Dr. Melissa L. Trueblood.
Dinslage didn’t give up easily. He tried everything he could think of to keep the manager on board.
“I was trying my hardest to find her childcare. I tried to barter with clients that we provide services for… ‘What kind of deal can I do for you so you can provide care for this child?’” he said. “I was even willing to help pay for the childcare. We all know how expensive it is.”
He said the family tried to make it work with several care providers, but either the high cost of care or scheduling conflicts caused problems.
He said the manager didn’t know if she could find somebody she could trust, and she didn’t want to leave her child with just anybody.
Though both licensed in-home providers and childcare centers are part of Seward County’s quality care network, most consistently have waiting lists. Finding an open spot became an issue.
Ultimately, the manager left her position with the Alps to care for her child.
“If there were really good options available, I think the situation might have turned out differently,” Dinslage said.
Families lose earning potential
Trueblood’s July 2022 study, “Economic Impacts of Inadequate Child Care Access, Seward County, Nebraska,” found that employers like Dinslage are not alone.
Trueblood is an economist employed by the Nebraska Public Power District’s Economic Development Department, which serves Seward County.
She used background data from the American Community Survey, the Bureau of Labor Statistics and the Bureau of Business Research at the University of Nebraska – Lincoln, which examined similar issues on a statewide level. Her research zoomed in to the county level.
In Seward County, the study found 618 families with at least one child under age 5. Those families miss out on nearly $2.7 million in household income because one parent stays home to care for children instead of participating in the workforce.
Of those 618 families, 76 are single-parent households.
The average annual earnings of full-time employees for married couples at the time of the survey was $45,307, with those earnings dropping to $30,414 for single fathers and $27,304 for single mothers.
The cost of care at a Seward County childcare center or in-home provider ranges from $150 to $225 or more per week for infants.
That equals anywhere from $7,800 to $11,700 for care for one child per year.
Care costs typically decrease as children age because the staff time required to care for older children lessens and centers can assign more children per caregiver based on state-mandated ratios.
Still, for many families, especially single parents, childcare is simply unaffordable.
“Childcare is deemed affordable if it accounts for 7% or less of a family’s total income,” said Mike Feeken of First Five Nebraska, an organization focusing on a child’s wellbeing during the first five years of life.
That means a family would need to earn around $175,000 per year to make childcare “affordable,” Feeken said, yet the average annual wage of all Nebraska workers is just $50,260.
Businesses lose employees, profits
Trueblood found the effects of the childcare shortage reach far beyond the home. The shortage affects employers, taxable retail sales and the local economy as a whole.
Employers lose money when their employees can’t make it to work as a result of no childcare.
“Child care related disruptions to work include short-term interruptions such as absences, tardiness or leaving work early to care for a sick child,” the study said. “They also include long-term disruption such as being fired, being unable to go from part- to full-time, or having to go from full- to part-time.”
Trueblood calculated the financial impact of five types of disruptions to work, including absenteeism, turnover, remaining part-time, going to part-time and forgoing a promotion because of an inability to secure quality childcare.
In total, she found that families missed out on a potential $2,687,728 because of these situations.
Further, Trueblood’s study found that the shortage of quality childcare is directly linked to a cost of $1,555,511 to employers.
“The impact of inadequate child care on business firms includes the costs to replace employees that temporarily miss work and reductions in revenues due to productivity loses from salaried workers that miss work due to child care issues,” the study said. “Impacts to business firms also include the costs of searching for and training new workers due to child care related turnover.”
Trueblood took it one step further, looking at the effects of inadequate childcare on taxable retail purchases as a result of reduced household income.
She found that in Seward County, taxable retail sales averaged about 13.9% of personal spending between 2011 and 2020.
Statewide, the average was 24.3%.
Seward County families are spending about $400,000 less – at restaurants, stores and other local businesses, which translates to lower profits for those businesses.
With lower earnings, businesses end up paying employees less, which makes it more difficult for those employees to pay for quality childcare.
Eventually, it becomes more cost-effective for those parents to stay home and care for their kids instead of work, which leads to a shortage of employees for area businesses.
At the time of the survey, Feeken said about 50,000 jobs were unfilled across Nebraska, and 395 of those were in Seward County.
“It’s all part of this ecosystem that, when working properly, should suit everybody’s needs,” Dinslage said. “Talk to any HR (human resources) director. There’s a big paradigm shift right now. We used to have stacks of applications to go through, and we’d have to ask ourselves how are we going to pick two out of 100.”
Now, he’s lucky if he gets two applications.
“We all have to get really creative in not only attracting them, but also retaining them,” Dinslage said. “When the pool of potential employees is so low, the free market is just forced to figure out these problems on its own. You’re forced to do whatever you can to keep valuable team members around and happy.”
He encouraged businesses capable of doing so to provide additional benefits for employees with children, whether that’s helping to pay for childcare, giving them time during the workday to tour potential care facilities or finding other ways to connect them with providers.
“It all comes down to value,” he said. “If the team member is valuable, we’re going to bend over backward to make it happen so they can be here doing their best work.”
