The Child Care Crisis: How lack of care impacts families, workforce, economy

Missouri loses an estimated $1.35 billion every year due to child care issues, according to a 2021 U.S. Chamber of Commerce case study. This same study indicates that 28% of Missouri respondents surveyed said they or someone in their household has left a job, not taken a job or changed jobs because of problems with child care in the last 12 months.

Here, we dive into the reasons why Southeast Missouri is experiencing a child care crisis, how this affects employers and communities, and potential solutions for the future.

Barriers to parents finding child care

Surrounded by shelves of colorful toys and children’s books in her Cape Girardeau office, Amy Loomis-McDonald explains what she has experienced with the child care crisis in Southeast Missouri.

As program director of THRIVE Birth to 5, an organization sponsored by Community Partnership of Southeast Missouri that focuses on increasing the quality of care and education in early child care facilities across 22 counties, she has witnessed the devastating impact a lack of care can have on a region’s families and children.

Loomis-McDonald says there are two main barriers for parents getting child care: Affordability and long waitlists.

“Especially when you have multiple children close in age then that pay [for child care] adds up you know, and it’s just this vicious cycle,” Loomis-McDonald said. “Why am I working when I’m paying this much for child care? Yet they [the parents] want to work.”

Emily and Abe Funk, co-owners of John’s Pharmacy, say the typical cost for infant care is over $800 a month in Southeast Missouri, with toddler care running around $600 to $700 a month. This is a huge financial burden, especially if parents have more than one young child, which is why employees may leave the workforce.

Even if parents can afford daycare, they may still end up leaving the workforce because they cannot find an open spot for their child — which is especially true for infants and children below 2 years old, Loomis-McDonald adds.

Waitlists for child care facilities and in-home daycares across Southeast Missouri are typically one year long. Many parents get on waitlists as soon as they find out they are pregnant in hopes they will have a spot by the time their child is born.

Loomis-McDonald says Marble Hill, Missouri only has one licensed child care facility; infant and toddler slots are almost always full. In Cape Girardeau, infant spots are hard to find, waitlists are long and the hours daycares are open don’t always correspond to typical working hours.

“Our pharmacies in Cape are open 9 [a.m.] to 6 [p.m.], which is typical pharmacy hours in Cape, and most daycares you have to have your kid picked up by 6 [p.m.] at the latest,” Abe Funk said.

Crystal Jones, executive director of Perry County Economic Development Authority, says although Perryville is not identified as a child care desert it is becoming more difficult to find open spots. For example, Wee Wonders Learning Center in Perryville has a waitlist reaching up to two years out, owner Tracy Watkins said.

In Sikeston, Missouri, the child care crisis has reached a boiling point. Marcie Lawson, President/CEO of Sikeston Regional Chamber and Area Economic Development, says most of the city’s options for child care are in-home daycares. Between 2016 to 2019, three large child care centers closed; the pandemic in 2020 only escalated the issue.

“That type of closure so quickly was devastating to working parents,” Lawson said. “It really put pressure on family members to stay home or people to come out of the workforce. Or truly the conversation of, ‘Do we have another child or not?’”

Betty Sharp, owner of Aziyah’s Little Angel in Sikeston, says her waitlist is “so long, it’s ridiculous.” She says all her friends who own daycares have year-long waitlists, sometimes longer.

“As soon as parents find out they’re pregnant, they let me know. And if a spot comes open within the month of finding out, they will start paying me just to keep that spot, paying full daycare just to keep that spot even though the baby has not been delivered,” Sharp said.

Parents’ stories

Taylor Deere, membership and program director for Sikeston Regional Chamber and Economic Development, has experienced challenges in finding care for her own children.

In 2014, she waited on a list for one year while pregnant with her first son, and the wait paid off when she secured a spot in the in-home daycare. Deere’s success was short-lived as that daycare closed when her son was 3 months old.

She searched for five months until she was able to find another spot for her son; during that time she “pieced together” child care day-by-day. Her working parents took vacation days, Deere and her husband took vacation days, they recruited high school students to watch him during their spring break.

“It was like a second full time job on top of researching again, trying to get on the list again to go somewhere else,” Deere said.

Deere finally found a spot at Aziyah’s Little Angel for her first son. For her second son, she paid daycare fees for 18 weeks before he was born to hold his spot.

“I know so many families who have done the same thing. I have a friend on maternity leave right now and she doesn’t even need child care until the first of the year, and she’s been paying all fall,” Deere said.

Mollie Buckler and her husband moved to Sikeston in June 2021. Before moving back, she says they weighed the pros and cons of coming back to her hometown; the possibility of not finding child care was one of those major “cons” that made her think twice about returning.

Buckler works remotely, but travels often for her job with the U.S. Rice Producers Association. She got pregnant in January 2022 and says she started “looking in earnest” for child care during her first trimester. Buckler says there were a few false starts at in-home daycares, but she wasn’t able to find steady, quality childcare until August 2023 when her son was almost one year old. During that first year, Buckler says it was a “constant battle.”

“I basically felt like I was failing everyone. I felt like I was only giving 50% to my son, 50% to my job and it was so, so hard,” Buckler said.

Staying home with her child and dropping out of the workforce crossed her mind, even though she never seriously considered this option before experiencing child care issues. Now, she drives to St. Augustine Early Learning Center in Kelso, Missouri, to pick up and drop off her son.

“Even though it is a sacrifice to some extent … to drive hours a week to take him to daycare, but I feel like I’m a better mom and a better coworker to have the consistency,” Buckler said.

Barriers for foster care parents and children

Loomis-McDonald explains how foster care parents may have further difficulty placing their children in child care facilities.

She says when child care centers accept subsidies, they often charge a copay but that is not allowed for foster children because they are considered special needs; this means if child care centers enrolled foster children, they would often lose money.

Recent legislation has improved this problem, making it easier for foster parents to find care.

In the summer, Missouri passed a $78 million subsidy increase aimed at encouraging more child care providers to offer services to low-income and foster families. This subsidy helps the financial outlook for foster parents and daycares that accept foster children, but it does not solve the issue of finding available infant care — especially with years-long waitlists.

Loomis-McDonald says one of her foster parent friends wanted to take a group of three siblings — a 2-year-old and infant twins. She was able to find child care for the 2-year-old, but not for the infants.

“[The siblings] had to be split, and now two years later, that case moved to guardianship and those kids are still in different homes,” Loomis-McDonald said. “[My friend] would have taken all siblings and babies if she had child care.”

This lack of child care may not only prevent foster parents from taking groups of siblings, it can also mean biological parents are unable to get their children back in a timely manner. Loomis-McDonald says she worked with a mother who had completed treatment, got a fulltime job and apartment and was ready to get her son out of the system, but she could not find child care.

“She could have got her son back. It took over three months before she found a spot for him. He had to stay in the system for three more months, because there was no spot, and he was under 2 [years old] and those are the hardest spots. And then she was lucky enough to get a spot,” Loomis-McDonald said.

Barriers to operating a child care facility

Abe Funk believes part of the waitlist issue is due to parents putting their children on multiple waitlists in hopes that one opens. If more daycares were incentivized to expand their capacity, or new daycares encouraged to open, part of this issue could be alleviated. This is a lot easier said than done.

And why can opening a child care facility be so challenging? A lot of the “why” stems from the heavy regulations associated with the industry, as Emily and Abe Funk discovered when opening their own licensed daycare center for John’s Pharmacy employees this year.

Licensed child care facilities must be in compliance with Missouri Department of Elementary and Secondary Education (DESE), local and state sanitation departments, local building and zoning requirements, the state fire marshal, among other requirements. Also, DESE requirements differ greatly depending on the daycare’s licensing classification and number of children the facility plans to serve.

“We run pharmacies. We understand a heavy-regulation business. But you know, this was complicated. So imagine people who don’t have that background, who don’t run businesses already … trying to jump through all those hoops and then get into a situation where you can’t even make money,” Abe Funk said.

Emily Funk says daycares are not a “viable business model.” For example, even when charging $800 for an infant every month — which puts a financial strain on parents — daycare owners may still struggle to breakeven.

According to DESE and Office of Childhood regulations for a Group Child Care Home, there can be no less than one adult per four children under 2 years old. The cost of the staff member alone can barely be covered when charging this rate, not to mention the cost of the facilities, Abe Funk says. Also, if a child care center wants to provide care for more infants, this could mean a new set of rules, Emily Funk says.

This may explain one reason why so many child care facilities choose not to take infants. Buckler, when looking for child care in Sikeston, said at least three places told her they only took children 2 years old and over.

“Depending on the number of kids you’re trying to get licensed for, you may or may not have to install a commercial hood in your food prep area, you may or may not have to install a commercial dishwasher, these are all things that would increase your costs by thousands of dollars,” Emily Funk said.

Currently, John’s Pharmacy Kids is classified as a Group Child Care Home and they are allowed to care for no more than 20 children. However, Emily Funk says their facility must remain at 18 children, because if they chose to add two more children and reach capacity, they’d have to hire an additional worker. She says it doesn’t make financial sense to take on the cost of another employee to cover only two more children.

The state regulations can be found on the Missouri DESE website, and although it’s easy to find the rules — it isn’t always easy to implement them. Abe and Emily Funk say local and state inspectors have been great to work with, but some of the regulations are open to interpretation which is where confusion can occur.

“What does it mean to provide a ‘safe, outdoor’ play area? And some of it is spelled out like how tall do fences have to be and how many square feet. Some of it isn’t. So we ran into that when we were installing our playground,” Emily Funk said. “Initially they said we would have to install bollards around our entire playground to make sure it’s a safe environment for kids to play, to make sure vehicles couldn’t crash into your fence and injure the playground. As you can imagine, this would greatly increase the cost.”

Emily and Abe went back-and-forth with the state regulators trying to figure out specifications for the bollards they had to install — which they did not see at other child care centers in Cape Girardeau. Under the Outdoor Space DESE requirements for a Group Child Care Home, there are no explicit statements concerning the installation of bollards in outdoor play areas.

DESE Missouri Communications wrote to B Magazine in a Dec. 1 email that the bollard requirement is a “case-by-case situation.”

The email from DESE Missouri Communications stated, “Licensing rules require that the premises be safe and suitable for the care of children. An example of when this would be required is if a parking lot were to butt up to the fenced outdoor play space without a curb or anything else to slow or stop a car from crashing into the play space; in that situation, DESE would require the facility to have something (a curb, bollard, etc.) to slow a car in an attempt to prevent serious injury to children who may be playing in the outdoor play space.”

Eventually, after two months of communications, Emily and Abe Funk say they were allowed to move forward with their child care facility without installing bollards.

Sharp was running her Sikeston daycare out of her home until she purchased a building two years ago. She hoped this new space would allow her to increase her capacity from 10 children as a family child care home to 20 children as a group child care home, but she says the costly and confusing regulations have prevented her from finalizing this license change.

“We understand being safe. That’s top. That’s number one, being safe. But me and my opinion, I feel some of the things they could still be a little lenient on,” Sharp said. “There are small things where they could allow you to open up and check [later] to make sure that you’ve gotten those things done.”

Sharp says her doorknob at her building had a latch that children could pull in case of a fire, but she had to switch it out to meet more specific requirements; she says she could not open her facility until that doorknob was switched.

DESE licensing requirements under Fire Safety for Group Child Care Homes do state “locking devices that impede or provide egress or that cannot be disengaged easily shall not be used.” Additional requirements for types of locks and latches are included, specifying the latch device should not be located higher than fifty inches above the finished floor.

“There’s just so many little things that it makes people give up. Give up real quick in trying to get your daycare open,” Sharp said. “It can get very complicated. If I had not already been in the business for 14, 15 years before I got here, I would’ve gave up. I would’ve said forget it.”

In order to use the upstairs of her building, Sharp says she must put up a retaining wall between her bottom and top stairs.

“So I can’t expand to 20 [children] unless I have the money to do that [put in the wall] and in order to do that, then I need funding. But in order to get funding, a lot of the time they [grants] want you to pay it up front and then they reimburse you. Well if I could pay it up front, I wouldn’t need to be getting a grant,” Sharp said.

Abe and Emily Funk say it cost them approximately $150,000 to remodel and start up their facility, and that they did benefit from a $50,000 startup child care grant; however, they received approval for the grant in the spring of 2023 and they have only seen small chunks of the money, so far.

“So again, imagine if you were doing this on your own, we have the opportunity that we can move money around between our different companies, but most people couldn’t do that,” Abe Funk said.

John’s Pharmacy Kids is only utilized for company employees’ children. John’s Pharmacy will pay for half of employees’ monthly daycare tuition, with the employee paying for the other half. Abe Funk says the daycare is costly and they are lucky if they break even; the child care is simply a measure to keep their employees.

A toy caterpillar hangs off the shelf at the THRIVE Birth to 5 offices in Cape Girardeau, Missouri. Lack of sufficient child care options in Southeast Missouri has impacted the workforce, families and economy.

Child care’s effect on workforce

When employees cannot find care for their children, they may end up dropping out of the workforce. Dennis Foley, general manager of the Orgill branch in Sikeston, says he has seen a lot of good employees leave due to an inability to find consistent child care.

According to the U.S. Chamber of Commerce 2021 report, 57% of parents who voluntarily leave their jobs do so when they have children under 2 years old.

“That growth in their [an employee’s] family is absolutely beautiful and welcome and we encourage them, we give all the support here we can. But they [sometimes] choose to drop the job, because there’s no one to provide that quality affordable care. The places that are in the market now are in low supply and have high demand. ... This can lead to a price problem. There’s not enough supply,” Foley said.

In her work with THRIVE Birth to 5, Loomis-McDonald sees a lot of parents struggle when they desire to have a job, but are unable to because they can’t find or afford child care.

To afford child care, lower income families need child care subsidies, but Loomis-McDonald says to qualify for a subsidy, parents must have employment. But parents can’t find employment if they don’t have someone to care for their children. It’s a cycle — one preventing those who want to work from working.

Ken Bateman, CEO of SoutheastHEALTH (soon to be Mercy Southeast), remarked that labor shortages have greatly affected their health system in the past few years during the Economic Impacts of Healthcare in Southeast Missouri panel at the 2023 Southeast Entrepreneurship and Economic Development Symposium. Specifically, he said they’ve experienced a lot of younger women leaving due to daycare challenges after the pandemic.

This observation may be backed by the Federal Reserve Bank of St. Louis 2021 statistics, which found that young parenthood may boost men’s labor force participation, but it depresses women’s labor force participation. According to these findings, 75% of mothers with young children participate in the workforce while 94% of fathers with young children participate in the workforce.

Emily Funk says John’s Pharmacy hires a lot of younger women in the 20 to 30 years old age range, which is why she believes the child care crisis has affected their business so much.

However, this problem is not exclusive to the women’s workforce. Foley says he has seen this issue affect both men and women at Orgill. Foley says child care is probably one of the top three reasons workplaces like Orgill are experiencing workforce issues. In Sikeston’s local industry council meetings, Foley says many other employers have expressed their grievances over the lack of child care options in the area.

Even if employees find child care for their children, Foley says most of the local facilities close by 4 or 5 p.m. Because Orgill is a distributor, employees sometimes work later hours to fill orders, so when there’s a problem at the daycare consistently, it can become an issue.

“We can be flexible sometimes and say there’s a problem at the daycare … that’s why we have different attendance programs, but as a business, we have to have policies and rules just like any business,” Foley said. “Any business would understand that they can’t just be wide open all the time.”

Foley says companies in Sikeston and the surrounding area have discussed starting up child care facilities for their employees but it’s mostly “coffee talk.” The licensing, cost and risk of starting a child care facility does not make sense for most companies.

The Funks took the leap for their employees at John’s Pharmacy by starting a child care facility, but they agree it is not a profitable business model. What makes more sense for employers would be to foster relationships with existing child care facilities, offering to offset the cost of their employees’ child care costs if they attended those facilities.

Emily sees child care assistance becoming part of employee compensation packages in the future — but in order to be viable, this needs to be coupled with tax incentives for employers who incur those costs along with tax breaks for the child care facilities themselves.

Child care’s effect on industrial recruitment

Lack of child care access impacts existing industries, but it can also prevent communities from recruiting new industries and companies.

“That is 100% something that businesses and industries are looking at when they’re looking to bring new jobs or expand. It’s not just a workforce development issue, it’s an industrial recruitment issue,” Lawson said.

Foley has a background in helping companies relocate, expand and choose new locations. He says there are a multitude of factors a company will consider when choosing to locate in a community. Utilities, taxes, access and infrastructure are obvious considerations, but companies also look at education, community involvement, housing and services. Sikeston has experienced a lot of recent improvements in their public education system, which Foley commends.

“But you still need to consider is there enough community services there? Is there enough housing? … Housing tends to lead to family building … and child care is a big part of education now. In the past, some people sought work when their children went to school. Well, there’s a lot of people who can’t afford that. ... Now the majority of families are two-income households and if you add to your family that shouldn’t knock you out of employment,” Foley said.

Employers want to ensure there is a strong base of employees to support their business before they choose to locate there, otherwise they risk losing millions of dollars worth of investment. Child care availability is a major factor of consideration. Not just for Sikeston, but for all Southeast Missouri communities.

Jackson Area Chamber of Commerce president Brian Gerau wrote to B Magazine in an email that “available child care is an economic development issue as current and future businesses are looking [at] as one of the many factors to locate to our area.” Gerau added that with Jackson’s growing population, they will need more child care facilities to support parents who are relocating to the city.

Hope for the future and legislative efforts

Emily and Abe Funk have spoken with Lt. Gov. Mike Kehoe and Missouri State Sen. Holly Thompson-Rehder extensively about this issue and what needs to be changed to support the development and expansion of more child care facilities.

Abe said Thompson-Rehder sent individuals from her office to their facility when they underwent inspections to gain insight into the licensing process and what could be improved.

Gov. Mike Parson has also identified child care as a major priority. Last year, multiple tax incentives and tax breaks aimed at addressing this issue were proposed in the state legislature but did not pass. The Child Care Contribution Tax Credit Act would have offered tax credits for child care providers and employers who cover child care costs for their employees. A tax credit bill will be reintroduced in 2024.

Missouri’s Board of Education recently changed a rule that had previously prevented many child care providers from accessing $26 million in grant funding for community-based child care providers. Loomis-McDonald also says there are more grants coming through the Office of Childhood for providers to watch out for, specifically with increasing infant-toddler slots.

Parents, child care providers, chamber directors and business owners interviewed for this B Magazine piece all agreed some sort of legislation needs to be passed to address this issue.

“We need to change something if we’re going to fix the problem,” Abe Funk said. “The good news is I would say we have some very good elected officials who are listening, who are willing to do things and that’s particularly in our area.”

Not-for-profit organizations are also working together to help solve this issue. United Way of Southeast Missouri (UWSEMO) recently started a Child Care Coalition, which met for the first time on Dec. 7 at the Cape Public Library to identify goals, begin research and plan their next steps.

“We do research before we open our grant process every three years, and every time our research indicates that child care and transportation are two big barriers to employment,” said Elizabeth Shelton, director of UWSEMO. “We started with transportation because we were already working with CTA … [we’re] trying to duplicate that process … present programs that will provide child care solutions.”

Shelton says UWSEMO recently received an AmeriCorps planning grant which will allow them to hire a full-time employee focused on their new transportation program United We Work, as well as researching the child care issue. Shelton says this employee would spend a year planning and researching what works in other communities, and the plan they create would be implemented during the following year with an operations grant.

“Part of the reason people don’t want to create child care facilities is because of the confusing and many regulations … I really hope this employee can start assembling a manual, creating a manual that says these are the specific steps you need to go through to create a child care facility, I think that alone would be a tremendous help,” Shelton said.

All those interviewed for this story believe in order to attract young talent and sustain a workforce in Southeast Missouri, this region needs expanded child care facilities — especially for infants and children under 2 years old. An investment in child care would help the long-term outlook for communities by helping employees remain in the workforce and helping employers sustain growth, while attracting new industries to the area.

Most importantly, more quality early childhood education in Southeast Missouri will benefit the health of future generations.

“By the first 9 months of life, they can see a difference between infants who have had quality interactions and those who have not. By the first 9 months of life,” Loomis-McDonald said. “You’re investing it in the beginning [with early child care education], but you’re saving it at the end, because you’re empowering them to make those decisions and choices.”