Wage boost coming soon for Johnson County child care workers

IOWA CITY — Amid a statewide child care crisis, the wage enhancement program for child care workers in Johnson County is coming at a crucial time for The Arc of Southeast Iowa and other child care providers in the county.

The Arc recently expanded its child care center at 2620 Muscatine Ave. in Iowa City to accept up to 74 children.

With that expansion, though, comes the need to recruit and retain staff — a challenge child care providers are facing statewide. Part of the challenge is increasing wages for child care workers, especially with other businesses increasing wages and offering benefits.

To address that, Johnson County, Iowa City and local businesses created a wage enhancement program that will increase wages for eligible child care workers by $2 per hour.

The program — funded by federal pandemic relief dollars and by contributions from businesses — will boost pay as early as next month at no cost to the centers or families.

“We can't expand on this needed service unless we have the workforce there to deliver on it,” Arc Executive Director Chelsey Markle said. “ … It's very good timing for us in trying to expand at this very moment.”

“I think it's also a boost to the staff we have because we have a great team of teachers.”

The overall goal of the program is to increase access to affordable, high-quality child care, said Jennifer Banta, president of the United Way of Johnson and Washington Counties.

Providing quality child care, she said, “really is a win-win-win.”

“If you figure out how to increase access to child care and how to increase wages, you are providing stable child care for working parents, you are providing workers for our area employers, … you're providing (child care) workers with a living wage that they can feel good about.”

Increasing access, wages

The average child care worker in Johnson County is paid $11.16 per hour — just over $23,000 annually — which is the lowest for any tracked profession. The $2 wage increase will amount to about a 17 percent raise, close to $4,000 a year.

“By encouraging more people to enter into that workforce, we're hoping that we can provide that living wage for folks, and we believe that that will help us increase access and improve quality,” Banta said.

Johnson County Social Services will review the first batch of applications for the wage program, including one from The Arc, this month. The goal is to start the wage increases in April and review additional applications on a rolling basis.

There is enough funding for between 135 and 150 employees, said Lynette Jacoby, the county’s social services director. If that threshold is reached, the plan is to continue accepting applications and create a waitlist.

To be eligible for the wage enhancement program, child care centers must be licensed and serve children age 5 or younger. The hourly minimum wage paid to workers must be at least the county’s recommended minimum wage of $11.56 per hour.

The centers must participate in the state’s quality rating scale or maintain accreditation from the National Association for the Education of Young Children. Eligible centers also must maintain a Child Care Assistance cap of at least 20 percent, which refers to the portion of a center’s capacity that’s reserved for families who receive state assistance.

Johnson County child care

Johnson County has the highest costs for child care in Iowa, Jacoby said.

A family with two children pays an average of $2,008 every month — or $24,096 per year — for child care.

The county last year contacted all of the 52 licensed centers in the county to ask questions about capacity, filled slots, waitlists and staff impact, among other questions; 42 centers responded.

The 42 centers — which do not include in-home providers — have a licensed capacity of 4,254 but operate below capacity due to staffing shortages. Of the total slots, 2,949 were filled at the time of the survey.

At the time of the survey, the child care centers had 102 full-time and 66 part-time staff openings.

It is hoped increasing wages will help recruit new employees to fill these openings, Jacoby said.

The waitlists at the 42 centers totaled 1,874, with some families possibly on the waitlist at more than one center.

“The data really speaks for itself in terms of our need for quality, accessible and affordable care in our community,“ Jacoby said.

Infant care is one of the county’s biggest needs, Jacoby said. Cost for infant care in Johnson County, she added, is 32 percent higher than the state average.

“There's the longest waiting list for infant care,” Jacoby said. “It's also the most expensive and most difficult for families to afford, so if we can increase capacity for infant care, we think that's really critical.”

At The Arc, for example, one of its five child care classrooms is not open due to lack of staff. It will be used for infant care once a lead teacher and additional staff can be hired, Markle said.

The Arc, which serves individuals with intellectual and developmental disabilities, began its child care program in late 2017. It is an inclusive day care for children with or without a disability.

How program works

The wage enhancement program will be funded by $1.5 million in pandemic relief dollars from Iowa City and Johnson County, along with additional investment from area businesses.

The business community is being asked to provide $150 per employee annually to the program fund.

The collaboration with local businesses shows the importance child care plays in the economy, said Shelly Maharry, president and CEO of the Community Foundation of Johnson County.

Businesses also are able to make contributions directly to the fund through the Community Foundation of Johnson County. Better Together 2030 will serve as a liaison.

“A vital workforce depends directly on quality child care being available in our community,” Maharry said.

Industry experts previously told The Gazette that businesses need to get involved to help solve the child care crisis, an issue that was exacerbated by the COVID-19 pandemic. Once businesses invest in child care, they stick with it because they see the benefits, such as bringing people back into the workforce.

In Hamilton County in north-central Iowa, a public-private partnership created an employee retention and hiring bonus program at four child care centers. The program, launched in 2021, is funded by contributions from businesses and local government.

As of last week, seven employers, including one large employer, had agreed to contribute to Johnson County’s wage enhancement fund, Cady Gerlach, executive director of Project Better Together 2030, said. The employers will be posted online as they formally join the initiative.

Potential for ‘huge impact’

Project partners will collect data as they track outcomes of the program. Metrics will include if vacant child care slots have been filled, how many additional slots were created, how many infant slots were created, staff retention and other information.

Michele Fink-Shaffer, director of Home Ties in Iowa City, said the wage enhancement program “has the potential to have a huge impact” on the child care workforce.

Home Ties is among the providers that submitted an application for wage enhancement funding. It is run by 4Cs of Johnson County and licensed to have up to 32 children. The center provides free, temporary care for families experiencing homelessness, domestic violence or other crises.

Fink-Shaffer said the wage enhancement program is an opportunity to show staff how important they are to the kids they work with. She doesn’t want to lose her “wonderful staff” to bigger businesses that can afford to pay them more.

“It would alleviate a lot of stress on my staff because then not only are they going to feel worth it, but they are going to be able to see that on their paychecks,” Fink-Shaffer said.

What happens after pandemic funds are spent?

Those involved said the business contribution will be key to ensuring the wage enhancement program is sustainable in the long run once pandemic relief funds run out.

The sustainability of the program is among the questions child care providers have been asking because pandemic dollars need to be spent by 2026.

Markle said the program’s longevity is a “very real concern for centers.”

“Sustainability can happen as long as our business community sees this as a valuable project to invest in and to get behind,” added Missie Forbes, executive director at 4Cs of Johnson County.

Jacoby said the partners involved in the program have been “really intentional” about developing a program for the long run.

Added Gerlach, of Project Better Together: “If we need $500,000 to run this program annually for 135 employees, that's only 3,500 employees in Johnson County that we need to get employers to contribute $150 for annually. That's a very doable goal. I think we can even do beyond that and grow the program.”

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