How Child Care Became the Most Broken Business in America

By Claire Suddath

Bloomberg

Deanna Cohen was 20 years into a career in the music industry when she realized it wasn’t going to work out. On paper she looked like a success: She’d worked her way up from college intern at a record company to vice president of music programming at a national TV network. She’d married, had a daughter, divorced, remarried. Then, in 2008, at age 44, she got pregnant with her second child.

Cohen and her family live in Portland, Ore., where the cost of caring for an infant runs as high as $2,000 a month. Preschool for her older child was cheaper, but not much, and most of the programs Cohen found ended at noon. To cover a regular workday, she’d need to tack on aftercare or a nanny. Cohen and her husband were looking at $45,000 a year or more in child-care costs—a figure they could barely afford. “I’m like, what am I going to do?” she recalls. She had a degree in education and had always loved working with children. “So I thought, ‘You know what? I’ll just open a child-care program myself.’ ”

She started small, in 2009, with one assistant and a license to care for a handful of children in her home. In the U.S., that’s how most child-care providers begin. Although there are national chains—the largest, KinderCare Education, enrolls 200,000 children across the country—they collectively serve only 6% of kids. Instead the industry is overwhelmingly dominated by small businesses owned by women.

Cohen named her place Wow & Flutterville, after an audio term meant to evoke the sound of a record needle finding its groove, and designed a curriculum based on the Waldorf early education philosophy, which focuses on imaginative play. She had craft tables and outdoor gardens. Within a few years she added a second location, then a third, each in a rented home. A few years ago she consolidated them into a proper child-care center. Today she has three spaces that, when fully enrolled, serve 131 kids from 6 weeks to 5 years old. Technically, Wow & Flutterville is a day care. But it looks and operates more like a school. In the U.S., public education usually starts with kindergarten. Before that, parents are on their own. Child care has become the catch-all term for the day cares, nurseries, preschools, or any other place that looks after, and sometimes educates, young children while their parents are at work.

With expansion, Wow & Flutterville can look after more kids, which means bringing in more money. And yet even after more than a decade, it’s almost impossible to make the math work. “Margins are still thin, even when things are good,” Cohen says.

Continue to full article . . .

Picture: Seattle City Council from Seattle, CC0, via Wikimedia Commons

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