The resurgence of California’s economy — the fifth largest in the world — could rest on one sector shattered by the pandemic: child care.

SACRAMENTO, Calif. — The resurgence of California’s economy — the fifth largest in the world — could rest on one sector in particular that’s been shattered by the pandemic: child care.

Steep revenue losses and costly new health and safety requirements are putting beleaguered child care programs out of existence in the high-cost state just as more parents return to the workplace. Even a relatively small percentage of closures could have an outsize effect given pre-pandemic shortages, experts say.

That could sideline workers and hamper recovery efforts, particularly in California’s signature tourism, entertainment and dining sectors where remote work is simply not possible. States across the country are experiencing the same challenge as more parents are ready to return to work but may have few options for their children.

“I really feel like we can’t reopen the economy until we open our child care centers, and I would extend that to K-12 as well,” said California Assembly Speaker Anthony Rendon, who ran an early education nonprofit before entering politics.

In sectors such as leisure and hospitality, as well as many jobs in health care, construction and manufacturing, “there is very little ability to work from home and be able to juggle your hours around child care,” said Elise Gould, a senior economist at the Economic Policy Institute in Washington, D.C.

The situation also has a disproportionate effect on women, she said, who remain more likely to assume the burden of caring for children and elders, even if they work outside the home.

Further complicating the child care equation is the K-12 school system, which educates some 6 million children in California. The state Department of Education suggested last week that schools could reopen for as few as two days a week to maintain smaller group sizes and social distancing.

The availability of before- and after-school programs will be critical, said Rachel Michelin, president of the California Retailers Association. “If that doesn’t happen, it’s going to be a mess because that really provided a lot of affordable child care for a lot of folks,” she said.

The CARES Act provided an additional $3.5 billion to help child care programs weather the pandemic, of which California received $350 million. Some child care centers also managed to receive federal aid under the Paycheck Protection Program, buying them time to figure out a plan. But advocates say more is needed from Washington, along the lines of a new, $50 billion proposal from Reps. Rosa DeLauro (D-Conn.), Bobby Scott (D-Va.) and Sen. Patty Murray (D-Wash.).

“The airlines got a huge subsidy,” said Eric Sonnenfeld of the Tulare County Office of Education, which runs 22 early childhood education programs in the heart of California’s Central Valley. “We’re looking to something of the same degree.”

In California, 72 percent of home-based day cares surveyed in late April reported they had remained open through the pandemic, caring for children of essential workers, according to a late April poll of child care providers by the University of California, Berkeley’s Center for the Study of Child Care Employment. 

But just 34 percent of the state’s licensed centers — which, combined, have roughly twice the capacity as home-based providers — kept their doors open this spring, it found.

Those reductions came on top of widespread closures of campus-based child care for school-age children as California districts ended physical classes in mid-March.

California on Friday allowed a wide array of sectors to reopen, which is sure to increase demand for child care. But centers that closed abruptly in March are figuring out if, when and how to reopen with cohorts of just 10 children, as the CDC has recommended. In many cases, that’s half the number of children that once shared a classroom. 

Like K-12 schools, child care centers face a difficult choice to maintain social distancing, especially in a recession. They could hire more staff and acquire additional space. Or they could reduce their enrollment. Both come with cost pressures, either through greater expenses or lower revenues, in a sector that historically has operated on the thinnest of margins.

Programs across the country are in the same precarious position as they try to adapt to the costly new requirements, said Beth Bye, a former Connecticut state senator who now leads that state’s Office of Early Childhood.

“The economic model doesn’t work that well,” Bye said of child care programs generally. “Now you take a business that was barely holding on and say, ‘You can take half as many kids.’ The math just doesn’t work.”

Sonnenfeld says he has been getting calls from Tulare County parents, wondering when they can once again send their kids to his county’s state preschool and Head Start programs. He still doesn’t have a firm answer.

“Businesses are reopening, restaurants are reopening, retail is reopening again,” he said, “but our county superintendent has been very adamant that it has to be safe — not only for students, but for staff — to return.”

While many regions will lack enough child care to meet demand, some providers say they can’t easily replace long-enrolled families choosing to stay home.

In addition to the continuing spread of the virus — and a lack of data on the transmission of Covid-19 by asymptomatic children — is a problem of reliable demand: Some parents might keep their children home as a health precaution or because they’re out of work. 

Yessika Magdaleno stayed open when the pandemic hit, caring for the children of nurses, fast food workers and grocery store employees at her home in the Orange County city of Garden Grove. But earlier this month she said nine of the 16 children who had been in her care before the pandemic had not returned. 

“I don’t know after June how we’re going to survive if more than half of my children are not here,” she said. 

Some parents haven’t even heard from their children’s programs amid the chaos of the pandemic, said Mary Ignatius, a longtime organizer for Parent Voices, a parent-led organizing effort. 

“Just figuring out who’s going to be open when everything goes ‘back to normal’ is going to be a test,” Ignatius said. “I think that’s been a lingering pit in every parent’s stomach: ‘I don’t know what is going to happen. I don’t know what this new normal is going to look like.'”

In California, child care has some important allies in the Legislature, including Rendon (D-Lakewood). He said he first met Sen. Holly Mitchell (D-Los Angeles), now the state Senate’s budget chair, 20 years ago at a rally for early education funding. 

Legislative leaders rejected Gov. Gavin Newsom’s proposal to cut reimbursement rates for state-subsidized child care by 10 percent, a move the governor himself would cancel if federal leaders provide budget relief. Assemblymember Kevin McCarty (D-Sacramento) called that cut “a nonstarter,” saying in an interview that it would “be a death knell for a lot of these programs.”

Newsom in April waived certain eligibility restrictions for state child care assistance to help essential workers who may not have previously qualified for subsidies. He also introduced an online portal to help connect families with child care, Mychildcare.ca.gov, that allows parents to search for child care facilities by ZIP code, including hundreds of new “pop-up” centers the state established in response to the pandemic.

Several lawmakers, anticipating child care challenges, are advancing bills to expand job-protected leave for working parents who need to stay home and care for their children, arguing that parents shouldn’t be forced to choose between their children’s safety and keeping their jobs.

Rendon said he worries about the effect on children’s development if they stay home from school much longer. Hand-washing and other health protocols have long been embedded in child care programs, he said, making them better positioned than other settings to open with proper precautions. 

Still, he said, “People are still quite scared. And to drop off your child, that’s a tremendous leap of faith.”

This blog originally appeared at Politico on June 11, 2020. Reprinted with permission.

About the Author: Katy Murphy covers consumer regulations with a focus on data privacy for POLITICO California. Before joining the team, she was a one-woman Capitol bureau for the The Mercury News and East Bay Times and previously covered K-12 and higher education for more than a decade, based in the Bay Area.