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What Price Child Care?


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WHAT PRICE CHILD CARE?

When S.C. Johnson & Son decided in 1985 that it needed to offer employee child care to attract and retain top talent to its bucolic Racine (Wisc.) headquarters, it didn't scrimp. Today, 400 children from newborn to age 12 use Johnson Wax 's state-of-the-art child-care center in a company-owned park with boating lake and Olympic-size swimming pool. Not only is care offered before and after school for older kids, there's even day camp during school vacations. The cost for day care--$90 to $115 a week--is less for employees making less than $60,000 annually. "This isn't a benefit--it's a good business decision because we want to attract the best," says JoAnne Brandes, an attorney and a founder of the program. "I only wish they had this when my child was born."

If only every parent today had that kind of safety net. But for most working parents, child care today doesn't work. Costs vary wildly among regions. Quality is spotty and often not policed. And, unlike most Western nations, the U.S. provides only minimal child-care assistance to all but the poorest families.

Actually, this should come as no surprise. America simply never planned for the dramatic march of women into the work force during the 1980s. Fully 55% of women with young kids work today, double the level of 1973. Yet the nation still clings to the old every-woman-for-herself method of securing child care that depended heavily on nearby relatives to baby-sit junior.

Zo Baird's failed nomination as U.S. Attorney General thrust the child-care debate into the spotlight. She knowingly employed an illegal alien to care for her son--a situation thousands of other families share as well. But that choice is forcing most working parents, employers, and even governments to grapple with a vexing challenge: rethinking how America cares for its young--and who will pay for that care.

That won't be easy, but society has little choice. Employees are being forced to look beyond salaries and place a value on family benefits such as flexible hours. Employers, especially those that depend on a female work force, must cope with the costly absenteeism and turnover spawned by inadequate child care. And government is confronted with an increasingly vocal middle class that sees a big chunk of the good life leave every month in child-care payments.

There's certainly no shortage of proposals. They range from a sharply increased child-care tax credit to even requiring child care by employers (table). But there is a shortage of the one thing that makes such care more accessible: money. The federal government, which spends upwards of $1.5 billion annually on child-care programs, is deep in debt. The states, which share in the cost and administer many low-income programs, are also strapped. Even healthy businesses are loath to offer what can become an ever more-expensive benefit.

Ironically, availability isn't the major problem nationwide. In many regions, there's actually a surplus of child-care slots--one of the reasons big chains such as Kinder Care Learning Centers Inc. and La Petite Academy Inc. have been weak performers in recent years. "Child-care centers all over the nation are 70% full, so there's plenty of capacity," says Jack L. Brozman, president of Kansas City-based La Petite Academy, the nation's second-largest child-care chain. "The real issue is affordability."

Still, shortages do exist in metropolitan areas such as New York and San Francisco, where high land costs make centers too expensive to build. Also, local health-and-safety ordinances often make child care even more costly. Mothers of infants--whose care is more expensive--complain loudest of difficulty finding help. Last summer, Cheryl Wilhelmi left her job as director of a Denver art school to live as a full-time mom in a former stagecoach stop near Roundup, Mont., partly because she couldn't find the right person to care for her twin infant daughters in her home. She had read many stories about child abuse and was wary of day-care centers that weren't employer-sponsored. "I could not see myself loading those two babies into infant seats every day and leaving them at day care," says Wilhelmi.

MAJOR EXPENSE. Although there was financial sacrifice in her career change, Wilhelmi's artist husband does hold a job. But most working women, especially single parents, don't have a choice to stay at home when child-care options aren't to their liking. Half of the women who return to welfare do so because of child-care problems. And affordability is not just the poor's problem: Robin Means, director of the Union Theological Seminary Day Care Center in Manhattan, says her center averages a $1,000-a-month fee for full-time infant care, which often eats up 75% of the take-home pay of the second spouse in two-income families. That leads to desperate measures. "Some use their student loans to pay for child care," says Means.

That's because the care Americans expect is often more than they can afford. Working women in the U.S. routinely pay 25% of their take-home pay for child care. And even the grandmom next door--if she's willing to risk cutting her Social Security payouts by reporting baby-sitting income--can charge $125 a week.

That's why more women are turning to their employers for solutions. Last fall, a consortium of 137 companies and nonprofits formed the American Business Collaboration for Quality Dependent Care (BW--Sept. 28). Its goal: to raise $25 million to fund child- and elder-care projects. And Johnson Wax isn't the only steller success. Corning Inc. started funding a day-care center in 1979 and today handles 120 kids in two day-care programs as well as 160 kids in after-school programs daily.

But companies don't have to go that far to make a difference. Morrison & Foerster, a San Francisco law firm, with offices nationwide, found that on-site centers just wouldn't work. Parents often didn't want to commute with kids. But they were worried about having emergency care. So the firm subsidizes child-care costs during child illness or an unexpected business trip.

Even the most ardent advocates of increased child care know that business can't carry the load alone. Millions of parents work at companies that are either too small or too poor to provide services. That's left many parents anxiously looking toward a cash-strapped Washington for help.

Still, there are things the feds can do at relatively modest expense. Child-care advocates say more federal funds could be targeted for junior college programs that train infant-care workers, perhaps enrolling welfare mothers in those programs. That would not only alleviate the most pressing need but also help other women leave the public dole. Cities, too, could step in. Baltimore lets private operators pay nominal rents for public school buildings to run day-care centers. The program has brought more than 1,000 new child-care providers into its licensing system.

But such piecemeal measures--generally aimed at the poor--aren't good enough in the eyes of the middle class. "It would be unheard of anywhere in Europe to expect families to be solely responsible for the burden of child care," says Karen Nussbaum, executive director of 9 to 5, National Association of Working Women.

EUROPE LEADS. Besides granting 360 days of paid parental leave after the birth of a child, Sweden offers subsidized day-care at municipally run centers. Federal and local governments split 90% of the costs, with parents paying 10%. As a result, 85% of Swedish women work outside the home.

France goes even further, providing free, universal care for children above the age of three, and it heavily subsidizes care for younger kids. But such comprehensive welfare programs mean that France spends roughly $200 billion on child care and on extensive welfare programs for families, double what the U.S. pays for similar benefits, figures American University economist Barbara R. Bergmann. France does have twice the toddlers per teacher vs. a typical American center. But "France is a less affluent country, and they do it," says Bergmann. "It's not a question of having adequate resources, it's a matter of allocation of resources."

That seems to be the nut of the problem. The nation is far from a consensus on whether providing care for all employed parents should be a governmental responsibility. "If an employer and its unions negotiate child-care benefits, that's fine," says Murray Weidenbaum, former chairman of President Reagan's Council of Economic Advisers. "But why get the government involved and have working women without children subsidize those that have them?"

That's really a political question--and a potential middle-class bombshell. But don't look for Washington to answer it anytime soon. Congress revamped federal day-care funding just two years ago. And with President Clinton focused on the deficit, child-care reform isn't even on the back burner. Unless lawmakers pass a more cohesive program, it's up to business to fill the vacuum. Until companies--and the government--devise better choices, the real casualties from the child-care mess won't be superstars such as Zo Baird, but everyday working families and their children.James E. Ellis in Chicago, with Judy Temes in Boston, Joan O'C. Hamilton in San Francisco, and bureau reports


Steve Ballmer, Power Forward
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