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Child care: what do families really want?

Parents are hard-pressed to find facilities that are accessible, affordable, and reliable.

When parent's seek substitute care for their children, there are three fundamental considerations they weigh - accessibility, affordability, and reliability. The first two seem to be fairly obvious. A substitute caregiver must be accessible: near home and work. Any arrangement that entails substantial added commuting time is not practical. Similarly, the cost of child care must not take up such a large portion of a family's disposable income that it seriously would diminish the benefits of working.

These two factors so closely are related that they could be combined under affordability. If a family can afford to pay, accessible child care will be available. The market of providers is so flexible that it is potentially infinite. The Department of Labor concluded in 1988 that there is no lack of child care. There may be temporary, localized shortages, but the market has proved to be highly responsive to these situations. Where a need appears, someone inevitably and quickly moves to fill it.

The question of reliability is more problematic. When parents hire a babysitter for even one night, they want to be confident their offspring will be safe and secure. This concern is even greater when it is a matter of entering into an arrangement for substitute care on a regular basis over a long period of time.

What constitutes reliability is a highly individualized judgment. Most parents probably have experienced child care arrangements they found unsatisfactory for some reason, and have shopped around for a better one. The factors they weigh in making a judgment about the reliability of a substitute caregiver could be extremely varied.

Parents may be concerned about the meals their youngsters are served or the kind of entertainment offered to them, as well as the ages and behavior of the other children being cared for. The physical environment in which their kids are placed may be uppermost in their minds. In many cases, it may be a personal response to the substitute caregiver. If they find one they like, who inspires confidence and builds a positive relationship with their children, other, more easily measured factors may pale in significance.

Government is incapable of making these personal judgments. What it can do, and does, to address the reliability of child care is to establish certain minimum standards for commercial child care. This is reasonable because there are some objective, measurable conditions the state has a right to demand of those who offer a service on the market.

Yet, it must be admitted that a regulatory standard is a clumsy instrument for guaranteeing a satisfaction that depends so heavily on intangible factors. People will have various conceptions of what is acceptable, desirable, and ideal. Most of all, they will have different ideas about who is trustworthy. The main task of regulation is to protect children from foreseeable threats to their health and safety. As regulation goes beyond that point, it becomes a matter of replacing the personal judgment of parents with the abstract decisions of regulators not directly involved in the relationship.

Currently, Congress is considering legislation that would establish certain minimum regulatory standards for virtually all commercial child care providers. It is very important, in this connection, to bear in mind that the issue is not whether there should be regulatory standards, but whether they should be set at the state or Federal level. Each of the 50 states already has a set of regulatory standards they have determined are best suited to their particular circumstances and conditions.

Are Federal

standards needed?

The question, then, is whether Federal law, in the interest of increasing the reliability of child care, should replace the standards set by the states with more stringent ones. This is ill-advised for several reasons.

In the first place, there is no evidence that the existing standards in any state are inadequate. Many of the tragedies that have occurred to youngsters while they were under the care of parental substitutes have resulted from unforeseeable accidents. Some have involved instances in which local regulatory standards were violated. Far more often, they have resulted from circumstances in which children were placed in situations beyond the reach of state regulation, frequently without adult supervision at all. In no instance has it been shown that a child has suffered harm because a state regulation was so lax that it placed his or her health and safety in danger.

The argument has been made that there are Federal standards for airline and consumer product safety and environmental pollution, so they should exist for child care as well. This analogy, however, fails in at least three ways:

* The safety of airplanes or the flammability of pajamas can be measured objectively, scientifically, and precisely. The reliability of child care is not amenable to this sort of laboratory analysis.

* It neither would be practical nor in the public interest to have 50 different sets of safety standards for products that are sold throughout the country. However, child care is not an interstate industry. It is a highly localized neighborhood business.

* There already are standards in all 50 states that - on the record, at least - are adequate to ensure the health and safety of all children covered by them. Thus, there is no reason to substitute the judgments of Federal regulators for those of the millions of consumers, providers, and state and local authorities who have established the existing standards.

A second significant consideration when weighing the advisability of Federal child care standards is that there is a trade-off between regulatory standards and the cost and availability of child care. The more stringent standards become, the more expensive it is for providers to meet them, and the more they must charge their clients. Those states with stricter regulatory standards tend to have a relatively smaller proportion of children cared for in a state-regulated setting, compared to the ones with more relaxed standards.

The states have had to strike a balance between maximizing standards at the cost of affordability and accessibility, or maximizing affordability and accessibility by placing fewer demands on child care providers. Connecticut, for example, has chosen to pursue the former course; Florida, the latter. Both of these decisions are honest attempts to serve the public good. It must be noted, however, that a far larger proportion of the children of Florida who are in substitute care are in regulated settings than in Connecticut.

Imposing stricter standards through Federal intervention will have at least two consequences. It will raise the cost of regulated child care in the affected states and prompt more providers and consumers to seek out arrangements that escape regulation, leaving a higher number of youngsters in unregulated care settings.

The industry trade journal, Child Care Review, conducted a study to assess the impact of Federal minimum standards on a single aspect of child care - staff-child ratios. It concluded that, if proposals pending before Congress become law, the cost of child care to consumers would increase by an average of $350 a year, and one-fifth of the licensed providers would go out of business, leaving more than 750,000 fewer places for children in licensed centers.

The impact of this single regulatory change would not fall evenly on the entire country. Some states would be unaffected, while others would suffer catastrophic dislocations in the child care market. In Arizona, for instance, parents would have to pay almost $750 a year more for licensed care. In South Carolina, the increase would be over $1,300. In Florida, more than 150,000 youngsters would be displaced from licensed care, while 250,000 places would disappear in Texas.

In those states that have chosen to emphasize accessibility and affordability by imposing fighter regulatory burdens on providers, licensed child care is plentiful and cheap. The system is working for families of modest means. Under Federal regulation, it would not, and they and their children would be hurt by strict standards.

Consumer choice is the key

In the final analysis, even the most stringent standards do not guarantee reliability because trust can not be imposed by regulation. What is far more effective than regulation is consumer choice. Where competition exists, consumers can ensure satisfaction by taking their business elsewhere if they lose confidence in a child care provider.

In order for the market to work this way, consumers must have the financial means to exercise choice. The family that can not afford more than $30 a week has very limited options. One that can spend $60 will have more choices open. Those who can pay $150 will have no problem finding care that meets their requirements. The problem is that there are a lot more families in the $30 than the $150 bracket.

Families of modest means have little choice except to take what is available at the price, and often that is not entirely to their liking. One mitigating circumstance is that churches - particularly in low-income neighborhoods which for-profit providers would not find attractive - have been generous in establishing child care programs at below-market cost. This has cushioned the hardship of meager resources for thousands of families in a way they find highly satisfactory. In addition, the natural solidarities of extended families and neighborhoods have enabled families of modest means to find reliable child care at low cost. Yet, despite these bright spots, the one element that assures parental choice and gives them real leverage over the reliability of child care is their ability to pay.

For this reason, it would make more sense to commit the resources of the Federal government toward strengthening the financial position of consumers instead of restructuring the child care industry. Putting money into the hands of parents obviously addresses the question of affordability, but also addresses the other two issues. When parents are able to pay for child care, providers emerge. Child care becomes accessible where it may not have been before. When parents have the means to choose among providers, they are able to demand standards of reliability they find satisfactory.

The current dependent care credit in the tax code is a well-intentioned effort to attain this objective. However, for a number of reasons, it fails to aid most of those families who are most in need of help. The main weakness is that it is keyed to spending money for child care; in general, the more one can afford to spend, the larger the credit. Families of modest means would find it more in their interest to spend as little as possible for child care and forgo the benefits of the tax credit, rather than take fuller advantage of the credit by spending more.

The way out of this dilemma is to break the link between receiving the credit and spending money for substitute care. There are many parents who rely on nonmonetary child care in exchange for some other service they can provide the substitute caregiver; who adjust their working hours - often sacrificing additional income and leisure time in the process - to ensure the presence of one parent at home all the time; or work at home and care for their offspring simultaneously.

Not everyone is in a position to do this, but those who do should not be penalized by the denial of a benefit they would qualify for if they hired someone else to watch their children. They often are people who place the welfare of their kids above short-term economic gain. In general, their children are better off because of the sacrifices their parents make. In effect, they are reducing the burden on the child care industry, thereby helping to keep accessibility up and costs down for those families who do patronize commercial providers.

The equitable approach to this is to issue an income supplement to families with young children in the form of a refundable tax credit. It should be scaled inversely to income, so that those with the greatest need would receive the most assistance. It need not be offered to families who earn significantly more than the median income, since that would amount to a transfer of income from the less to the more affluent. Clearly, budgetary considerations will determine the size of this credit and the number of families who will be eligible for it, but Federal resources should be stretched as far as possible to strengthen the economic position of families with children.

This solution goes directly to the heart of the child care dilemma - financial security. The only reason parents have to seek out substitute caregivers is so they can be free to earn enough money to support their kids. Enhancing the income of families with children will do more to help improve the quality of life for youngsters, and do so more effectively, than any other step that can be taken by government.
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Author:Schwartz, Michael
Publication:USA Today (Magazine)
Date:Jul 1, 1993
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