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F I S C A L I M P A C T R E P O R T

SPONSOR Vigil

DATE TYPED 2/21/05

HB HM22

SHORT TITLE Child Care Worker Wage and Benefit Study

SB

ANALYST Dunbar

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Children Youth and Families Department (CYFD)

NM Public Education Department (NMPED)

Health Policy Commission (HPC)

SUMMARY

Synopsis of Bill

House Memorial 22 requests that the Interim Legislative Health and Human Services Committee

study the value and impact of providing supplemental wage support and benefits to child care

workers identify methods to finance such wage supports and benefits and report its findings and

recommendations to the second session of the forty-seventh legislature.

House Memorial 22 Page 2

Significant Issues

Childcare and preschool programs have difficulty attracting and keeping good individuals to

work with young children. PED indicates a third of program staff leave the field each year, pri-

marily due to the lack of adequate compensation-low salaries, few benefits and difficult working

conditions. Research has clearly shown that the skill and commitment of the adults in early

childhood programs directly affects the quality of care and education given to children.

The T.E.A.C.H. Early Childhood® Project gives scholarships to childcare workers to complete

course work in early childhood education and to increase their compensation. In 1990, Child

Care Services Association in North Carolina created the Teacher Education and Compensation

Helps (T.E.A.C.H.) Early Childhood® Project to address the issues of under-education, poor

compensation and high turnover within the early childhood workforce. The T.E.A.C.H. Early

Childhood® Project is an umbrella for a variety of different scholarship programs for teachers,

directors and family childcare providers working in regulated childcare programs in North Caro-

lina and other states across the country. All T.E.A.C.H. Early Childhood® scholarships link

continuing education with increased compensation and require that recipients and their sponsor-

ing childcare programs share in the cost. In 2003, 22 states were implementing T.E.A.C.H. pro-

grams, including: Alabama, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Kansas,

Michigan, Minnesota, Missouri, Nebraska, New York, North Carolina, Ohio, Oklahoma, Penn-

sylvania, South Carolina, Virginia, Washington and Wisconsin.

FISCAL IMPLICATIONS

The bill does not contain an appropriation.

OTHER SUBSTANTIVE ISSUES

Source: NM Department of Labor LASER website

OES Wage Survey Data for 2001 indicates that child care workers in NM, on average,

earn an estimate of $14,200.00 annually. Experienced child care workers earn around

$15,040.00 annually.

Source: United Way website

Child care workers rarely receive paid leave.

The state offers reimbursements for child care, but these are often not sufficient to cover

the total cost.

The cost of child care is expensive – between $4,000 to $10,000 annually.

Source: US Department of Labor, Bureau of Labor Statistics website

Openings for child care services are frequently available while working conditions, bene-

fits and wages often do not meet the expectations of workers in this field.

The child care industry is growing rapidly and is in demand due to an increasing number

of women involved in the workforce.

Employers may be supportive of child care, since it has the following benefits:

o

Reduces absenteeism

o

Increases morale

o

Reduces barriers to employment

The annual turnover rate for child daycare workers is higher than the average for all oc-

House Memorial 22 Page 3

cupations.

Child care workers make up approximately 25% of child day care services wage and sal-

ary jobs.

HPC points out that child care is essential to keep parents employed in the workforce and also

serves as an avenue to prepare children for school; it could be harmful to society not to explore

current issues concerning the high rate of turnover in this field of work. Increasing compensation

and benefits, HPC notes, to child care providers could have a positive impact on the quality of

child care delivered to children in NM, but at the same time, may affect the pricing of child care

services.

BD/yr:lg