Thursday, March 4, 2021

Oregon's Child Care Industry

Many working parents in Oregon rely on the child care industry for safe, affordable, and educational care for their children. Even with the 2020 spike and still elevated level in unemployment, most parents are in the labor force and employed, translating into a lot of children needing child care. The importance of the industry has been highlighted in the pandemic recession, as child care centers and providers faced new restrictions and risks of providing care in Oregon communities.

The child care sector was hard hit at the onset of the pandemic recession and heavily affected by the restrictions put in place to stop the spread of COVID-19. Due to the nature of such a close-contact business as caring for children, and additionally to the many changes we all dealt with in the spring that suddenly shifted both demand for and supply of child care, employers had to shift rapidly in the spring to reopen with new safety precautions and limitations to group sizes, cohorts, and a new, much smaller, staffing footprint.
At the onset of COVID-19, the private-sector child care industry dropped 35% of its jobs in the space of one month, moving from near peak employment of about 13,000 jobs in March to 8,400 jobs in April. As of September, the most recent month of available data, Oregon’s child care businesses had regained just 1,300 of the jobs lost this spring, reaching about 9,700 jobs.

The number of businesses didn’t change much between the first and third quarters of the year, dropping from 1,417 to 1,392. So far, with data through September, almost all child care businesses had survived the pandemic. With COVID-related restrictions lasting well into 2021, it remains to be seen whether more widespread business closures will take place, and how that will affect local child care marketplaces as the economy recovers from the pandemic.

Child care businesses tend to be small operations. In 2018, Oregon’s private-sector child care businesses numbered 1,308 and employed 12,453 workers. Half of the businesses had four or fewer employees. Fifteen percent of child care businesses employ 20 or more workers.

Average wages are low in the industry. Total payroll of child care businesses with employees in 2019 was about $301 million – this averages out to almost $24,000 per worker, less than half the private-sector average of $54,000. The low average wage is due to the low wages of the occupations that dominate the industry. For example, the median wage of a preschool teacher in Oregon in 2020 is $14.71 per hour, and the median wage for childcare workers is $12.90. These two occupations account for more than two-thirds of the employment in the day care industry.

The pandemic recession has harmed the industry a great deal, and its implications for business survival and retention of the child care workforce are still developing as we struggle to get COVID-19 under control. In addition, lower wages tend to be associated with higher turnover, and turnover among regulated child care facilities far exceeds turnover at other educational entities such as K-12 schools. 

Families and businesses rely on a stable child care industry. Increasing availability and affordability of reliable child care options will be necessary to getting Oregonians back to work in the economic recovery after the pandemic. You can read more about Oregon's child care industry in the full article written by Employment Economist Jessica Nelson.

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