A report released Sept. 21, 2021 confirms what industry leaders have long understood: Sioux Falls and its working families are in a childcare crisis.

There are two types of crises in this world.

The first kind comes roaring at us via breaking news and shrieking cellphone alerts.

The second is quiet, almost stealthy. Over time, small, seemingly insignificant blurbs crop up in social media posts and news stories.   

“A national childcare crisis has been brewing a long while. But in Sioux Falls, it seemed easier to dismiss a story about someone who couldn’t find infant care or a mom who quit work to stay home with her kids,” said Rebecca Wimmer, CEO of Boys & Girls Clubs of the Sioux Empire.

The pandemic and subsequent workforce shortage pushed a long-broken service model over a tipping point. “We can’t ignore the childcare crisis in Sioux Falls anymore,” she said.

According to Heather Long, economics correspondent for The Washington Post, as the pandemic ebbs, nearly 1.6 million mothers of children under 17 have not returned to the workforce. 

Now, thanks to the Beacom Research Fellows Program at Augustana University, the community understands how the crisis is affecting Sioux Falls.

The study was proposed to the Beacom Fellows by Sioux Falls Thrive, which facilitates the Sioux Falls Childcare Collaborative.

Childcare Crisis on Many Fronts

The relationship between Thrive and the collaborative goes back to January 2019. Members wanted to improve efficiency and access to childcare in the downtown Sioux Falls area.

Candy Hanson, who coordinates the network of two dozen government representatives, and nonprofit and faith-based childcare providers commends members for solving their downtown service issues. “They did that virtually on their own,” Hanson said.

In early 2020, when the pandemic reared its head, the collaborative worked to keep childcare services available to essential workers. Later, as vaccines became available, the group’s focus shifted back to the issue that threatened them all — recruitment and retention of childcare professionals.

“They wanted to know how Sioux Falls compared to the national crisis, so we asked the Beacom Fellows for help,” Hanson said.

Childcare Crisis - August 2021 report

“Expensive and Inaccessible: Childcare in Sioux Falls, South Dakota,” was researched and written by Beacom Fellow Annie Olson. She surveyed childcare providers and employers in the spring of 2021. The report was released in August 2021. Click here to download it.

The report, “Expensive and Inaccessible: Childcare in Sioux Falls, South Dakota,” was researched and written by Beacom Fellow Annie Olson. She surveyed childcare providers and employers in the spring of 2021. The report was released in August 2021. Click here to download it.

 

Sioux Falls mimics the national experience

  • The impact of childcare availability on the Sioux Falls workforce is “especially relevant.” More than 75% of the 15,116 children under age six live in families where all parents are working. The national average is66%.
  • Estimates indicate that more than 4,000 Sioux Falls parents are not in the workforce but potentially could be if they had accessible and affordable childcare.
  • Overall, childcare isn’t affordable to the median Sioux Falls worker. The cost of childcare for one child, birth to age five is close to $10,000 per year while the median wage for a Sioux Falls resident is $39,000 per year.
  • When the surveys were conducted, childcare providers surveyed had a total of 913 families waiting for openings for their children.
  • The biggest obstacle to expanding childcare services is the lack of qualified staff.
  • Low-wages and part-time work are barriers to recruitment. The average childcare professional earns $22,000 per year.
  • The majority of state-licensed childcare providers run financial deficits in their childcare programs. Most reported deficits of $100,000 or less per year, but one reported a $500,000 annual deficit.

It’s a vicious cycle. The margins in childcare have been minimal at best for quite a while, especially for nonprofits that have been focused on keeping rates lower for working families. A large percentage of those providers are running deficits as they strive to serve the community.

The workforce shortage has pushed us to the brink. We want to be cautious about raising rates because we know that families can’t afford to pay more; but we lose staff because we can’t compete with retail businesses. We then reduce our capacity because we do not have enough staff, which leads to fewer families finding childcare and an increase in our annual deficit.

Rebecca Wimmer

CEO, Boys & Girls Clubs of the Sioux Empire

No workforce without affordable childcare

The First Five Years Fund, a national advocacy group, estimates that the childcare industry in South Dakota alone has a $279 million impact on the economy.

“I was also impressed to learn that the U.S. Chamber of Commerce Foundation sponsors a Center for Education and Workforce that recommends several ways businesses can provide childcare support to their employees,” Hanson said. “But you know that makes sense. There’s no workforce without an affordable childcare system.”

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