Gabriela Guerrero鈥檚 children are all grown and have moved out, but the former stay-at-home mom never stopped raising kids.
The children who attend her home daycare in El Centro, in Imperial County near the Mexico border, are as young as 3 months old. Some are the children of farmworkers who drop them off at Guerrero鈥檚 house before their shifts in the pre-dawn hours. Nearly all are from families poor enough to qualify for state subsidies.
Many of the families can鈥檛 afford basic needs, Guerrero said, so the 57-year-old makes sure to provide their children with milk, diapers and sometimes clothes.
鈥淚 want the families to go to work knowing that (their children are) well taken care of, and they鈥檙e being loved and fed correctly,鈥� she said.
Guerrero鈥檚 labor of love barely earns her a living. After paying two assistants and other costs, she figures she takes home about $3 or $4 an hour. She takes on credit card debt to keep her business going.
For years family child care providers 鈥� the 鈥� have said they don鈥檛 get paid enough by the state of California to cover the costs of their businesses. Their fight for better pay and benefits, a two-decades-old effort, is reaching a fever pitch in California鈥檚 capital this year.
They鈥檙e pressing Gov. Gavin Newsom to raise their pay, and they have the Legislature on their side. Lawmakers put $1 billion for raises in their that they passed last week. That funding remains one of the key differences between Newsom and the Legislature as they hammer out a budget deal before July 1 that accounts for an estimated $32 billion deficit.
The full cost of California child care
Newsom deemed the child care industry critical to getting parents back to work and recovering the state鈥檚 economy from the pandemic. He signed legislation in 2019 allowing home child care providers like Guerrero over subsidized child care reimbursement rates. And the state has issued multiple rounds of to providers who lost revenue during the pandemic.
But the 40,000-member union representing the home-based providers says Newsom鈥檚 administration isn鈥檛 offering providers enough to keep them in business long term. The union鈥檚 current contract expires in less than two weeks, at the end of June.
Bargaining for a new one this year, the union has called for a 25% bump in reimbursement rates the state pays to providers who care for low-income families鈥� kids 鈥� and state funding for the union to set up a trust to issue retirement benefits.
Providers staged a rally with about 2,000 members and supporters at the Capitol last week and plan to set up camp outside the Governor鈥檚 Mansion this week.
鈥淎s a direct result of their action, providers are gaining ground in negotiations towards pay increases and basic benefits 鈥� but we have yet to see a fair and just contract offer from the state,鈥� said Max Arias, chairperson of the Child Care Providers鈥� Union, in a statement. 鈥淭here appears to be no interest in committing to ongoing rate increases or covering the full cost of care.鈥�
Family or home-based providers care for 28% of children who attend licensed facilities in California. Parents also send children to daycare centers or state-funded preschools, or pay a family member or friend.
A stopgap measure
To some advocates and members of the Legislative Women鈥檚 Caucus, even winning the raises would be only a stopgap measure to keep providers in business. The child care industry has the past three year and still employs 5% fewer people than it did before the COVID-19 pandemic, according to a recent study by the UC Berkeley Center for the Study of Child Care Employment.
They鈥檙e pushing the state to move faster to fundamentally overhaul the way it calculates reimbursement rates. Sen. , a Democrat from Santa Barbara, authored a bill this year directing the state to overhaul the rates and provide the $1 billion raise in the meantime.
The $1 billion in the Legislature鈥檚 budget 鈥渟olves an immediate problem,鈥� she said. 鈥淚t doesn鈥檛 solve the full, 10-year problem.鈥�
The state鈥檚 reimbursement rates are how much providers charge in the private market 鈥� but because many child care providers lower their prices to meet what parents can afford, the rates have ended up artificially low, in a system that last year described as a 鈥渕arket failure.鈥� That in turn results in chronic shortages of child care for parents.
That report, on child care funding in California, was commissioned by a working group the state convened as part of its current contract with the child care union. In the report the national firm Prenatal to Five Fiscal Strategies, found California pays some daycare owners of what the service costs.
A new model
In the southern region of the state, where Guerrero lives, the firm estimated it costs a home-based provider like hers more than $39,000 a year to provide quality care for one infant or toddler. The state reimburses about $12,000.
The same report recommended the state adopt a new method for calculating reimbursement rates that is based on real costs like the ones the firm calculated, rather than surveys of daycare rates. It has drawn support from both business and labor: urging the state to implement the recommendations was signed this year by the Service Employees International Union and the California Chamber of Commerce.
Asked to comment on the overhaul plan, both the state Department of Finance and the Department of Social Services said the issue is being negotiated with the child care union.
鈥淧roviders are gaining ground in negotiations towards pay increases and basic benefits 鈥� but we have yet to see a fair and just contract offer from the state.鈥�MAX ARIAS, CHAIRPERSON OF THE CHILD CARE PROVIDERS鈥� UNION
No new payment method has been developed yet, though the state this year restarted the working group to advise on overhauling rates. Because the current rates are so low, a new model could be dramatically more expensive for the state. In some cases, providers may have to be paid three or four times what the state currently covers.
Advocates say it鈥檚 possible the state could come up with a new payment method that gradually, over several years, gets the pay closer to providers鈥� real costs.
Eric Peterson, director of client services and policy at Bananas, an Oakland agency that helps families find child care and subsidies to pay for it, sat on the working group that commissioned the cost report.
In nearly three decades in the field, Peterson said, pay for providers 鈥渉as never been adequate.鈥�
鈥淓verybody knows鈥� we can鈥檛 pay the true cost of care in a year,鈥� he said. 鈥淭he intent is to acknowledge the true cost and find a schedule to get there.鈥�
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