In October 2016, Georgia Allen got a phone call that changed her life. At the time, Allen, 35, was a single parent living in Madison, Wis., with a 3-year-old daughter. To cover her $925 monthly rent and keep her daughter in day care, Allen worked two jobs at a hospital, answered calls part time at a domestic violence center and held down a side hustle caring for elderly people and children. Even with a $300 state subsidy, Allen had to pay another $1,200 out of pocket for her daughter’s care.
The caller told Allen that she had reached what she calls the “benefits cliff”: She was earning too much to qualify for the health- and child-care benefits she was receiving. Yet without those benefits, Allen couldn’t make ends meet.
“I get emotional thinking about it, because I was just so frustrated,” Allen said. “I finally get to 16, 17 dollars an hour, and the journey was so hard because I couldn’t go to school and have child care. I had to choose one or the other to make our ends meet. And the system tells me, ‘No, you no longer qualify.’”
Because she had to prioritize which bills to pay, Allen’s car was repossessed. That dinged her credit record, making getting financing for a replacement car even more expensive.
Although Allen adjusted her work schedule after that October call so she wouldn’t lose her benefits, she ultimately lost her job.
Allen used the crisis as an opportunity to hit pause.
“It took me several months of a lot of prayer,” Allen said about finding her new direction in that period. One day, in tears, Allen had a revelation that the different jobs she’d held were all training for running a business. With families like her own in mind, Allen envisioned a cooperative network of home-based child-care sites that would not only ensure that low-wage-earning parents could secure quality child care but also provide living-wage employment to caregivers.
The challenges and disparities Allen faced existed long before the coronavirus pandemic. The crisis, however, has exacerbated these challenges for many families and underscored the argument that caring for children is an essential service. Without child care, front-line workers, whether supermarket employees or doctors, can’t go to work.
Evelyn Brodkin, a professor emeriti at the University of Chicago’s school of social work, notes that part of the current crisis can be traced back to 1990s welfare reform. “Although the law increased federal child-care funding, it was inadequate to serve all who needed it. One estimate is that states received funds sufficient to meet only half of their child-care needs. Some states supported only 25% of need,” Brodkin wrote in an email.
According to the Bureau of Labor Statistics, child-care workers earned a median hourly wage of $11.65 in 2019, well below the $15 figure being suggested as a new minimum wage.
Even before the pandemic, the number of regulated, in-home care providers had declined nationwide. One reason for this drop is that to receive government subsidies, home-based providers were required to meet higher training standards in the wake of a 2014 reform. The Bipartisan Policy Center calculated that in 2019 the child-care industry employed 1.5 million people, yet it received a disproportionately small number of Payroll Protection loans. By July of last year, the pandemic had pushed 325,000 child-care providers out of the workforce, further threatening an already fragile industry operating on thin margins.
In Allen’s home state of Wisconsin, only child-care programs that participate in the state’s ranking system can accept the subsidies low-income families receive. But on the flip side, those subsidies often don’t fully cover the cost of care at high-quality facilities.
“There’s definitely a difference in your ability to attain high quality care depending on your income,” said Coral Manning, the early care and education manager for the city of Madison.
Allen says the connections became clear to her as she meditated on her next steps after losing her job.
“It’s a domino effect, right? If economic stability isn’t happening, and people are choosing alternative child-care options because child care is expensive or not accessible, that will affect the educational journey that our children will face. So, I started to see how it was all connected,” she said.
Research supports those connections, correlating lower poverty rates and a lower likelihood of involvement with the criminal justice system with quality early-childhood education.
Health care often entails a 24-hour work schedule, so Allen knows firsthand the importance of child care with flexible hours. Yet in Madison, 90 percent of licensed child-care facilities close by 7 p.m., according to research from the Care for All project. The same source also found that the density of providers varies significantly. The working-class Zip code corresponding to the city’s north side has an average density of 1.3 providers per square mile, while more affluent areas on the west side boast nearly three times that. A 2017 study by the liberal Center for American Progress, which looked at 22 states, found that more than half of the rural areas reviewed demonstrated a shortage of care options, as did cities where median family incomes are lower than average.
Julia Henly, a University of Chicago social work professor, framed the challenge: “Child care needs to be super flexible and variable around parents’ work schedules, but child-care workers themselves are low-wage workers who, you know, we kind of are expecting them to carry the caregiving needs of other low-wage workers, and I just think that is not really sustainable.”
These are the conundrums Allen aims to solve.
In mid-2019, she met someone who took seriously her two-pronged approach of simultaneously addressing both employment and child-care needs. That was Abha Thakkar, executive director of a community development organization, the Northside Planning Council, which focuses on that sparsely served area of Madison.
Now the NPC is helping Allen and her team build a round-the-clock, in-home child-care network with support on a business proposal, and by facilitating connections to grant-makers and lenders. The network’s home-based care sites will be supported by a central location that, along with offering care, will also train providers, prepare meals for the in-home satellites, and handle the back-office tasks.
One of the central elements of Allen’s plan is that families who participate in this child-care network won’t face the sort of spike in costs that threatened to derail her after that 2016 phone call.
“This platform, for the parents, when they get to that benefits cliff, there is an option,” Allen said. She points to a plan for a sliding pay scale and case management to help parents navigate the transition away from public benefits as they grow their incomes.
Allen estimates that the network, named We Care for Us, needs a minimum of $400,000 to launch and aims to raise that by the end of this year. A substantial portion of that investment will go toward fitting out the network’s central building so that it meets regulations.
Thakkar, meanwhile, is working in the background to support the project. “I can’t bring the same lived experience that [Allen] has,” Thakkar said, “but what I can really bring is some understanding of organizational development.” So, for example, when Thakkar realized that Allen and her crew hadn’t begun doing financial projections, she suggested that three years of projections would be an important element for obtaining financing.
“This model is going to be a hybrid,” Thakkar says. “You don’t want a worker-owned co-op to be a nonprofit in and of itself because the whole point is wealth-building,” she said. As a result, the Northside Planning Council will serve as a nonprofit fiscal sponsor while the co-op develops its business.
Meanwhile, Allen and her partners are already talking with a group in Nashville about replicating the model.
Allen says that for years she was ashamed of the challenges she was facing. Now, she says, talking about those challenges is what’s needed.
“I was resilient, and there are a lot of resilient people. But maybe how they go about it — they’re defaulting to things that might end up hurting them. I want to change those options,” she said.
An earlier version of this story gave the incorrect amounts for Georgia Allen’s state child-care subsidy and out-of-pocket costs. The subsidy was $300 and her out-of-pocket expenses were $1,200, not the other way around. This version has been corrected.
Zoe Sullivan is an independent journalist and audio producer who has divided her time between Brazil and the United States since 2013. She was supported by a grant from New America’s Better Life Lab.