Paying Up: Enhancing Child Care Compensation Systems in Colorado, D.C. and Louisiana

High-quality early education leads to lifelong success for children and their communities, and it cannot happen without professionals cultivating and facilitating these important learning experiences. We know well the critical importance of the child care field, yet low pay—averaging $13.31 per hour, according to the Center for the Study of Child Care Employment’s 2020 Workforce Index—remains the norm throughout most of the country, and early childhood educators endure poverty rates that are 7.7 times higher than elementary school teachers.

To infuse the landscape with greater equity, the Early Educator Investment Collaborative funds innovations in financial systems that support long-term increases of compensation for the early care workforce. A recent round of grants supports systemic change in Colorado, D.C. and Louisiana.

“Focusing on compensation requires innovating on financing systems,” says Dr. Ola J. Friday, director of the Collaborative. “You need someone from the fiscal and budget office at the table.” The Collaborative designed the request for proposals to incentivize these partnerships, and many applicants, even those that didn’t receive funding, noted that the process of applying spurred collaborations that needed to happen anyway.

👉Investing in New Systems for Paying Educators What They Need and Deserve

Dr. Friday introduced leaders from the three new grantees to Early Learning Nation magazine.

Colorado

An educator quoted in the Early Childhood Colorado Framework reflects, “When I think about the vulnerability of young children under six years old . . . how impressionable they are . . . how important a caring relationship with an adult provider is . . . and how much time providers spend with young children, I can’t get over the fact that the compensation is not equitable. It’s not even a living wage. I would love to see greater compensation.”

The Collaborative’s $3.8 million investment will advance this vision through an expansion of the Teacher and Family Child Care Home Salary Increase and Compensation Pilot, among other initiatives. According to Rebecca Vlasin, division director, Early Childhood Workforce, of the state’s recently formed Department of Early Childhood, early findings from the pilot’s randomized control trial have shown a 92% retention rate for the providers receiving hourly increases of $3-$8, compared to a rate of around 82% for those not receiving the boost.

Dr. Friday hopes that the Collaborative’s investment helps them demonstrate the effectiveness. “We’re playing a part in supporting their advocacy so they can get the funding they need to sustain the pilot,” she says.

Vlasin says, “As we designed the pilot, we wanted to be sure that we were considering any unintended consequences of salary increases for teachers as well as for providers across Colorado communities. For example, we know that one-third of our workforce qualifies for public benefits due to the compressed wages, and we want to understand how a wage increase might make them ineligible—essentially, pushing them off a benefits cliff without a systemwide commitment toward a sustainable, livable wage.”

The Collaborative previously invested $2.3 million to help University of Colorado at  Denver facilitate a consortium of institutions of higher education to explore credentialing and access to postsecondary degrees—efforts that relate directly to the continued quest for equitable compensation. The recent grant will build upon this work by helping the various agencies to create the structures needed to facilitate greater inter-agency coordination, capacity-building and action.

👉Eliminating Structural Inequities in Workforce Preparation

According to Vlasin, Colorado’s long and unwavering commitment to supporting children and families results from collaboration between state and local entities across private and public domains. “Families, professionals, advocates and policymakers have worked together to build coordinated systems that support local areas to be responsive to the needs of their communities,” she says. This spirit of collaboration permeates the state’s Early Childhood Leadership Commission.

👉Subscribe to Our Voice: Colorado’s Early Childhood Newsletter

The District of Columbia

Comparable to a state department of education in any other state, the Office of the State Superintendent of Education (OSSE) functions as D.C.’s education agency as well as its lead agency for the federal Child Care and Development Fund. Since 2021, the Early Childhood Educator Pay Equity Fund has increased compensation for early childhood educators, bringing it within range of what K-12 teachers earn.

Initially, OSSE partnered with an intermediary to issue payments directly to educators, but according to Sara Mead, OSSE’s deputy superintendent for Early Learning, the long-term vision was always that providers would see an increase in the paychecks they receive from their employers, and this shift is currently under way. “This is the first time any jurisdiction has tried to do what we’re doing at this scale,” she says.

A new mom herself, Mead says, “Parents just cannot afford to pay what it costs to really compensate our early childhood educators at the level they deserve. So, the only way to untangle that situation and really address the pay they deserve is by having a revenue source that comes from someplace other than the traditional early learning revenue sources. In our case, we are blessed with a rich ecosystem with so many supportive elected officials. The resulting tax measure enables us to do some of the most exciting work in the country.”

HealthCare4ChildCare, a partnership with the District’s health benefits exchange, is making health care coverage affordable for child care employees. About a thousand individuals have enrolled so far, 40% of whom were previously uninsured. And deductibles are lower this year, thanks to an upgrade from the silver plan to the gold plan.

The Collaborative’s $2.4 million grant will also support an initiative called the D.C. Business Collaboratory, an OSSE collaboration with:

• The Low-Income Investment Fund
• Washington Area Community Investment Fund
• United Planning Organization 
• Kids Comprehensive Services
• Hurley & Associates

The Collaboratory will support child care programs with business administration, operational and management issues.

“We are excited to support D.C.’s success,” says Dr. Friday. “And to help OSSE bolster its data and information technology systems to more effectively implement the Pay Equity Fund and health care benefits.”

Mead says, “One of the challenges when you are standing up programs really quickly is that you are doing a lot of innovation really fast and don’t have as much time to reflect on what you’re learning and really document it. That’s why this investment is so important.”

Louisiana

For Dr. Friday, one of the things that stood out about Louisiana’s plans for increasing provider compensation was the local-to-state implementation approach. “Orleans Parish has an existing compensation pilot,” she says, “We’re looking to support Louisiana to scale up that model to additional parishes around the state.”

👉 New Orleans Coalition Pushes for Child Care Measure with Multigenerational Effect

Another distinguishing feature of this investment is that the grantee, the Louisiana Policy Institute for Children, is a nonprofit and not a governmental agency. Executive director Libbie Sonnier, Ph.D., recalls, “We took this opportunity to the state department of education and asked if we could apply for the grant, since it aligned with our Geaux Far Louisiana work, which is about systems improvement. And they were like, ‘Absolutely,’ since we are all working together so closely anyway.”

Candace Weber, Ph.D., partnerships director at the Louisiana Policy Institute for Children, notes that the timing of the project was perfect for their organization because it followed on the heels of their cross-sectional “Tiger Team” project (a term popularized by NASA) that resulted in their Professional Wages for Professional Educators report. The team, which comprised experts from academia as well as educators with lived experience, found, “Competitive pay can boost employee retention and recruitment, which will encourage long-term quality improvements and directly benefit the young children in their care.”

“Louisiana isn’t the only state that’s grappling with compensation,” says Dr. Weber. “We know the economic benefits associated with child care and understand what’s at risk if we don’t address workforce compensation.  We get contacted by other states to learn what we’re doing, especially around our Economic Impact Calculator for Businesses, which tracks the cost of child care breakdowns.”  (A recent report found that parental absences cost Louisiana businesses $762 million annually from missed work, turnover and other related costs.)

Louisiana just inaugurated Jeff Landry as Governor, and Dr. Sonnier anticipates continued growth in state investments in early childhood, building upon $87 million of recurring state funding over the last four years. “We have buy-in from the business community and the legislature,” she says.

The system building funded by the Collaborative will help early childhood educators by reflecting the true value of their professional work. Dr. Friday adds that the Collaborative is actively seeking aligned funding to support additional states.