Child Care and federal aid

Child Care and federal aid

High-quality, affordable child care has long been in short supply in Louisiana and across the country, and the crisis grew worse during the pandemic as child care centers struggled to stay open. Temporary federal aid has provided a critical lifeline for the industry, but advocates warn that the money will soon run out and that sustained investment is critical. The stalled Build Back Better plan would provide funding to make child care affordable for the vast majority of American families, and ensure better pay for people who work in the industry. Sophie Quinton at PEW’s Stateline has more:

Federal and state aid must continue, said Karen DeVos, owner of a child care business in rural Ada, Minnesota. “We can’t just say, ‘We’re nearing the end of the pandemic,’ or, ‘OK, the pandemic is now the norm: Figure it out.’” . . . With future funding uncertain, child care providers worry about what will happen when federal relief dollars dry up. DeVos is currently using a federal grant provided monthly by Minnesota’s human services agency to pay her employees $300-$700 monthly bonuses. She can’t afford the bonuses without the grants, she said. “My fear is, when those end, what happens?”

Closer to home, the Advocate’s Will Sentell reports on a Louisiana Policy Institute for Children survey that shows child care providers are starting to recover from the financial losses sustained in the early months of the pandemic.

Libbie Sonnier, executive director of the advocacy group Louisiana Policy Institute for Children, said federal COVID-19 relief dollars kept the industry afloat. Sonnier said without the federal money “providers would not have been able to stay open.”

Who’s to blame for inflation?
Over the last year, the prices of everyday goods like groceries and gasoline have skyrocketed, putting a squeeze on workers whose wages have risen more slowly than their cost of living, while corporate profits are on the rise, as is often when corporations take advantage of existing inflation to boost their margins. Now, as the Washington Post’s Jeff Stein reports, a debate is on within White House circles, with some pointing to corporate pricing strategies as a key source of strain on consumers’ pocketbooks:

Matt Stoller, an antitrust expert close to many White House appointees in the field, published an analysis finding that higher corporate profits reflect roughly 60 percent of the rise in inflation now borne by consumers. With the stock market booming, U.S. corporations are on pace to make more than $1.7 trillion in profits this year, explosive growth compared with the roughly $1 trillion they made in 2019. (Some analysts have disputed Stoller’s conclusions.) . . . But even some liberal economists in the administration’s orbit are skeptical of the new approach, arguing it is unlikely to ease the price crunch anytime soon. They point out that corporate consolidation is a phenomenon going back decades, so it is unlikely to explain this year’s sudden burst of inflation.

Investing in rural broadband
High-speed internet is a prerequisite for modern life, especially for people who work remotely. But for large swaths of rural Louisiana, high-speed
internet is simply not available, a situation that limits opportunities for rural economic growth. The Legislature last year set aside $90 million in federal funding to incentivize private companies to bridge the digital divide. As Blake Paterson writes in the Advocate, with companies responding enthusiastically to the initial round of funding, the Legislature is likely to set more money aside for rural internet infrastructure in the spring. 

[A]fter the recent passage of a $1.2 trillion-dollar infrastructure package, the program will likely serve as vehicle to distribute even more grants in the future. Louisiana expects to receive at least $100 million in funding from the legislation, though billions more will be available based on need, (Veneeth) Iyengar (of ConnectLA) said. The state Legislature is expected to send another $85 million from its pot of $1.3 billion in unspent pandemic aid to the grant program in the upcoming legislative session, allowing a second round of GUMBO funding to begin taking applications in July.

Benefits cliffs
Safety-net programs often help parents provide for their families when their income drops or their employers don’t pay them enough to meet their basic needs. But when parents’ earnings increase, they face a tight squeeze as program benefits can decline more than their insufficient wages rise, causing more financial strain for the family when they receive a small raise. This week The Urban Institute released a new report exploring the challenges that benefit cliffs pose for parents with low incomes. Amelia Coffey and Hannah Daly at The Urban Wire share one of the report’s crucial insights:

Though most parents said they would prefer to earn more money from work (rather than not working and having secure benefits), they also feared losing critical supports, like housing, child care, and food assistance. These benefits provide critical resources for families with low incomes in the face of unstable jobs and large expenses. Many parents described weighing how to support their families without knowing if they could rely on benefits. Sometimes, this meant parents who’d been hesitant to work would have if they had known they would continue to receive some critical supports.

Number of the Day
42% Percentage of the Louisiana population that lives in a child care “desert” where there are not enough child care options. (Source: Center for American Progress)