Cornell University Proposes Compensation Fund to Enhance New York State Child Care Industry

Two out of five New Yorkers with children who participated in a recent ILR School-sponsored poll report that a member of their household opts not to work, mostly because child care is too expensive, while child care workers earn among the lowest wages in the state, according to a report released March 8 by the ILR School’s Buffalo Co-Lab.

Continuing a multiyear effort with collaborators to determine the “true” cost of child care, “The Status of Child Care in New York State” finds that recent increases in state subsidies helped stabilize the industry through the pandemic, but were insufficient to reduce inequities in access and quality.

Since 2021, child care capacity across the state increased by about 3%, or nearly 19,000 slots at licensed child care providers, but did not improve or declined in many areas, particularly in upstate counties and low-income communities that were already child care deserts or near-deserts, according to the report.

The authors propose a workforce compensation fund, similar to one implemented in Washington, D.C., to increase child care workers’ pay on par with starting salaries for elementary school teachers, which would help attract and retain new professionals.

“If implemented in New York state, a compensation fund would likely stem the tide of workers leaving the child care industry due to poverty wages,” the report states. “Moreover, Buffalo Co-Lab research shows that the return on investment would far exceed the cost of the program, creating tens of thousands of new jobs and activating new economic activity connected to the child care industry.”

ILR Buffalo Co-Lab authors of the report are Catherine Creighton ’87, the co-lab director; Steve Peraza, senior researcher and policy associate; and Russell Weaver, director of research. Doctoral students from the State University of New York at Buffalo’s Department of Sociology provided additional research support.

The team discussed its findings March 8 during a livestreamed public event in Buffalo, joined by child care workers, parents and partners including the WNY Women’s Foundation, Community Foundation of Greater Buffalo, John R. Oshei Foundation, Buffalo Niagara Partnership and members of western New York’s state delegation.

The researchers analyzed state workforce and economic impact data and responses to Cornell’s 2023 Empire State Poll. They also conducted interviews and focus groups with child care providers, advocates and officials in Erie County to assess the impact of recent state policy changes.

Top-level findings include:

• Child care workers in New York state remain underpaid and undervalued, earning a median wage of $32,900 – nearly 40% less than the median wage for all New Yorkers – with 12% falling below the poverty line. The state’s more than 69,000 child care workers are racially diverse, but 94% are women.
• Lack of access to affordable child care removes New York workers from the economy. Among Empire State Poll respondents, in households where an adult member stayed home because of child care, more than half said they did so because of its high cost, while nearly a quarter said they lacked access. Labor shortages are exacerbated if parents are unable to work due to child care issues.
• New Yorkers value quality child care and support investments in the industry. Nearly 80% of Empire State Poll respondents indicated they would support public funding for universal child care as a free public service akin to K-12 public education.
• Child care capacity is ticking up, but not everywhere. Capacity declined in 22 mostly upstate counties, including by more than 20% in Greene, Schuyler, Oswego and Franklin counties, and about 8% in Manhattan.
• A child care compensation fund would raise wages for all child care workers. The researchers’ analysis showed a 1.9 to 1 return on investment, suggesting that if such a fund cost $2 billion annually, it would create $3.8 billion in economic activity and 40,608 new jobs.

“By these measures,” the authors conclude, “the New York State Child Care Compensation Fund could become an integral piece of a more equitable, accessible and caring child care infrastructure in New York state, in turn making the care economy one of New York’s economic engines moving forward.”

The new report follows the ILR Buffalo Co-Lab’s 2022 release with partners of “The True Cost of Child Care: Erie County, N.Y.” Additional partners in the “true” cost of child care initiative have included Erie County child care providers, the Western New York Child Care Action Team and Live Well Erie.

The research was supported by the Community Foundation of Greater Buffalo.