In households headed by women, child care is a critical part of being able to go to work. Single mothers on welfare joined the labor force in droves after the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 - also known as welfare reform - mandated their participation. Labor force participation by female-headed households jumped nearly 22 percent between 1995 and 1998. These trends translate into a lot of children needing child care.
So, how big is the child care industry in Oregon, and has it kept pace with the demand for paid care? And what is the relationship between child care and Oregon employers?
Wages are low in the industry, an issue that is often linked with quality of care. Total payroll of child care businesses with employees in 2010 was just about $178 million - this averages out to an annual industry wage of $18,654, less than half the all-industry average of $41,669. One reason for a low average wage could be the low wages of the occupations that dominate the industry. For example, the median wage of a pre-school teacher in Oregon was $11.09 an hour, and the median wage for child care worker was $9.50 in 2011. These two occupations account for more than half of the employment in the day care industry (Graph 2).
Employment in day care businesses with employees grew 27 percent from 2001 to 2010 - matching the growth rate in the larger industry sector of health care and social assistance. Day care industry employment is now more than five times the 1976 level, while all-industry employment has almost doubled.
The child care industry has high employee turnover, according to the BLS Occupational Handbook. The industry is also characterized by low profitability, according to a 2005 Child Care Division study (The Economic Impact of Oregon's Child Care Industry). Licensing requirements mandate a high ratio of staff to children, and often costly investments in training and equipment are required.
There is evidence of a current shortage of day care. The Child Care Division study noted that in 2005 the supply of child care spots was 17 per 100 children. In order to meet demand, 25 spots per hundred children were needed. This shortage was particularly acute for children with special needs, infants and toddlers, and evening care for children of parents who work late shifts.
One of the study's conclusions was that "... if all parents who need paid child care could afford or access it, an estimated 23,700 additional Oregonians could participate in the labor force." This is important to Oregon businesses facing a tight labor supply in many occupations and industries. Offering child care as an employee benefit could be another way to attract and retain a skilled workforce.
A statewide survey of employee benefits offered by employers reported a wide array of benefits offered, including child care, all designed to promote balance between work and life (Table 1).
|Work/Life Benefits Offered by Oregon Employers to Full-Time Employees|
|Percent of Employers Offering Benefit|
|Flexible Work Schedule||69.0%|
|Child care assistance|
|On-Site Child Care||2.0%|
|Subsidy for Purchase of Child Care||3.0%|
|Childcare Information and/or Referral||5.0%|
|Source: Oregon Employer Survey, Oregon Employment Department, 2008|