‘Major problem.’ Can NC businesses clear obstacles for child care industry in crisis?

North Carolina businesses may have a role in fixing a child care industry potentially entering a deepening crisis.

Child care prices already are too high for parents and too low for workers. Then, as federal help ended in June, a new report from the U.S. Chamber of Commerce Foundation raised worries about child care problems is slowing North Carolina’s economy — $4.3 billion from child care-related employee turnover and missed work days.

The legislature passed a one-time allocation of state money for child care providers amid a state budget impasse, but employers have a role, too, in helping ease the burden of child care difficulties for employees, organizations who spoke to The Charlotte Observer said.

“It’s also the managers asking the questions and then listening to the answer,” said Tracy Chambers, the executive vice president and chief people officer at Charlotte-based real estate company Crescent Communities.

That means helping employees saying, “I need two more weeks because my child care hasn’t started” or “I need two more weeks because this is really hard,” she said.

Whether that happens depends on the business. Some industries don’t have the flexibility and resources to fund extensive benefits or create flexible work schedules, people from varied organizations told the Observer.

How we got here

The federal government’s COVID-19 relief included grants to North Carolina child care businesses. They allowed recipients to pay employees, cover rent and mortgage costs, and subsidize child care costs for some families, according to previous reporting from The News & Observer .

The money aimed to keep child care companies running through the COVID-19 pandemic — so it was never intended to be permanent — and it ran out at the end of June. Then, on June 26, the legislature passed a bill allocating $67.5 million to replace the federal money until a state budget is passed.

But that doesn’t change fundamental child care issues in NC. Licensed infant and toddler child care programs can only serve about 19% of the infant and toddler population in the state, and the average cost of child care for a baby in Mecklenburg County is nearly $10,000 per year, the Observer previously reported.

Around 29% of child care programs across the state expect to close once funding sunsets, according to a study from the North Carolina Child Care Resource and Referral Council. And 88% of programs expect to increase parent fees once stabilization grant funding runs out.

How NC employers can help with child care

Parents who have trouble balancing child care concerns and their work may be let go from their jobs or decide to leave the workforce. At the same time, employers endure significant replacement costs, according to the U.S Chamber of Commerce Foundation report.

For many employees, conversations with their supervisors about child care needs are daunting, said Elena Arecco Bridgmon, chief administrative officer and co-founder of LUMO, a Charlotte-based executive coaching program for employers and employees with a focus on child care difficulties.

Employees worry they’ll lose their job or get demoted if they speak up, she said. Many parents feel pressure to return to work quickly after their having a child, according to Family Forward NC. Even though major medical associations suggest six to 12 weeks of paid leave, most parents with access to paid leave take only four weeks off.

One or two honest conversations with an employer can change how an employee feels about child care difficulties, Arecco Bridgmon said.

For example, an employer can allow an employee to come in a half-hour later to adjust for child care responsibilities, she said.

Janet Singerman, who leads Child Care Resources Inc., a nonprofit child care referral agency, said employers should survey their workforce to learn about their child care concerns. Once a company gives its employees permission to voice anxieties, the conversation truly begins, she said.

“What we also see, which is a major problem, is (employers) have the policy but not culture to support the policy,” LUMO CEO and founder Sarah Olin said. “So they could take leave, but then there’s retribution on the backside.”

For some employees, seeing their employers create a workplace culture through leading by example makes them feel more supported, Chambers said.

“For example, (our CEO’s daughter) had a volleyball tournament last week in Florida,” she said. “He was with her there, and he took calls as he needed. So when the executives set the example and set the tone, I think that’s really important. That makes you feel more like, ‘Well, I can do that too,’” she said.

Are Charlotte companies helping with child care?

Beyond conversations, employers can ease child care difficulties with benefits. Some Charlotte employers, including Crescent Communities, provide parental leave plans of at least 12 weeks of paid leave.

Bank of America provides 50 days of backup child care when regular arrangements are not available and up to 16 weeks of paid parental leave. The Charlotte-headquartered company also provides eligible employees making under $100,000 a $275 per month reimbursement per child to cover child care costs.

Atrium Health, Mecklenburg County’s largest employer, offers four weeks of paid parental leave for all parents and six weeks of paid parental leave for parents who give birth. Wells Fargo, the county’s second largest employer provides up to 16 weeks of paid parental leave for primary caregivers, and up to four weeks for non-primary caregivers.

Wells Fargo offers 20 days of back-up child care, if plans fall through, and Atrium offers up to 30 days of transitional child care, for parents that need time to decide on a longer-term child care option as they are returning to work.

Arecco Bridgmon said it’s helpful for employees when their employers are open to adjusting work schedules outside of the traditional 9-5 workday.

Many industries in North Carolina, though, don’t have the resources to offer extensive benefits or flexibility to adjust schedules, said NC Child research director Neil Harrington.

Some of Charlotte’s biggest industries, including manufacturing, healthcare and retail, are among those with set working hours.

Samantha Cole, child care business liaison for the NC Department of Commerce, said she emphasizes to every employer she works with, regardless of scale or industry, they can still make a difference in solving child care issues. She said a less costly option for employers would be offsetting care costs their workers already pay for, while a more costly option would be creating a new child care facility.

Investment needs

Employers are only one piece of solving the child care crisis, Cole said.

“We also really have to make sure that we’re encouraging plenty of state and federal investment in child care, because it is infrastructure that supports working families, that supports early childhood education and learning readiness, and it also supports our economy,” Cole said.

Gov. Roy Cooper’s 2024-25 budget proposal includes $745 million to strengthen early education and child care for working families, including $200 million to specifically extend the child care grants for providers. The House and Senate budget proposals both included less than $140 million for the grant extension, in addition to the temporary funding.

“There’s so many different ways, it’s a public and private sector issue,” Olin said. “And they need to work together. We need to see efforts on both sides.”