By Rob Roper
There is no more compelling evidence to bolster the warning that government is the problem, not the solution, than in the intersection of Vermont’s childcare and minimum wage policies. The Keystone Cops meets the Three Stooges could not devise a more incompetent mess.
We are told we have a childcare “crisis” in Vermont. It is entirely the result of state policy. Lawmakers have, in their wisdom, dramatically increased the amount of regulations childcare facilities need to comply with in order to exist. This is expensive and time-consuming for marginally profitable businesses, causing many of them to simply close their doors, leaving fewer options for parents and kids.
Adding fuel to the fire, the state provides taxpayer subsidies only for programs they deem to be “high quality” (i.e., more expensive), making it difficult for programs that can’t get subsidies to compete, so they go out of business. The net result of government meddling is that we now have fewer childcare slots for kids, and the ones that remain are more expensive. Crisis!
Now, here comes the “Fight for $15” crowd pushing for a $15-an-hour state minimum wage. The Vermont Senate has already passed this and sent the bill to the House. They did this knowing that this would explode the childcare crisis outlined above. Of course, if you forcibly raise the wages of childcare providers, the cost for childcare will increase proportionally, making it less affordable.
On the other side of the equation, there is what’s called a “benefits cliff” in Vermont for low-wage earners. As wages rise, income-sensitive benefits fall off. The Joint Fiscal Office did a study showing that a single parent working a full-time minimum-wage job would lose $765 in annual benefits ($469 in childcare subsidies). With a gain of just $633 in annual income, this represents a net loss of $132.
So, our most vulnerable families will have, as a result of state government policy, less money and fewer subsidies to pay for more expensive childcare services.
But, no fear, this “crisis” of government making can be solved, say the lawmakers who made the mess, with increased spending — $9.2 million more to start, but that won’t be the end. According to an article in Seven Days, there is already a $9.2 million shortfall in the childcare budget. There is no money available in the budget to cover this. In order to eliminate the negative effects of the benefits cliff, the Senate included in its bill a provision to keep paying the benefits as wages rise. A summer study committee determined this would cost taxpayers as much as $12 million. There is no money in the budget to cover this either.
But, even these spending increases are not enough to satisfy the advocates of “high quality” child care. Their estimates for a fully funded, age 0-5 system would come to nearly a billion annually. And for what?
Seven Days recounts this story from a “high quality” center:
“Wanna see my brand-new box?” the [five-year-old] girl asked Smith [director of the center].
Smith bent down to inspect a Nike shoebox decorated with photos of the girl and her mother and asked about its purpose.
“It makes me calm down so I don’t get nervous about my mom so I don’t miss her anymore…”
“Teachers,” [Smith] said knowingly, pointing out that an educator with less training might not have found a creative way to relieve the preschooler’s anxiety.
The article presents this as a serious, good thing for this kid. But this is state policy. We’re going to spend tens of millions of taxpayer dollars to put more children in this heartbreaking position: a “high quality” situation in which her parent, whom she has been traumatically separated from, is replaced by a shoebox.
That, folks, is what government does.