Latest / Trumponomics / 58: Childcare Costs Are Too Damn High

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58: Childcare Costs Are Too Damn High · Trumponomics

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Speaker 1: Brought to you by Bank of America. Merrill Lynch seeing
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Speaker 1: what others have seen, but uncovering what others may not.
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Speaker 1: Global Research that helps you Harness disruption voted top global
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Speaker 1: research from five years running. Merrill Lynch, Pierce, Fenner and
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Speaker 1: Smith Incorporated. There was like a Family Guy episode when
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Speaker 1: they had the family of like the Simpsons family came
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Speaker 1: to Rhode Island. And I can't believe I just admitted
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Speaker 1: on this podcast that I actually watched Family Guys sometimes. Hello,
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Speaker 1: and welcome back to Bloomberg Benchmark, a show about the
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Speaker 1: global economy. It's Thursday, octobert. I'm Scott landman and economics
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Speaker 1: editor with Bloomberg News in Washington, and I'm Kate Smith,
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Speaker 1: editor with Bloomberg in New York. Today we're going to
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Speaker 1: be talking all about the cost of childcare and why
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Speaker 1: it's an important economic issue. But first I wanted to
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Speaker 1: say that I'm even more excited than usual about today's show.
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Speaker 1: Do you know why, Kate? I think do? But keep going? Well,
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Speaker 1: you know, I don't know if you're too young for this,
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Speaker 1: but there's a great tradition of crossover episodes of TV
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Speaker 1: shows you've had. You have the character from one show
1:10
Speaker 1: go on another show, and then the network would promote
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Speaker 1: it as a quote unquote very special episode. One of
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Speaker 1: the most famous was when Steve Herkel went on Full House.
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Speaker 1: That was a major, major event in the history of television.
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Speaker 1: Do you know that? Um, I didn't know that it
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Speaker 1: was a very special event in television history. But I
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Speaker 1: think I have seen this because there was like a
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Speaker 1: Family Guy episode when they had the family of like
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Speaker 1: the Simpsons family came to Rhode Island. And I can't
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Speaker 1: believe I just admitted on this podcast that I actually
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Speaker 1: watched Family Guys sometimes. It's amazing, it's wonderful, it is,
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Speaker 1: it's really good. Well alright, well, in that tradition, so
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Speaker 1: Scott brought this up. In that tradition. One today we're
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Speaker 1: going to be giving our listeners are very own crossover
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Speaker 1: episode of Benchmark. So have a number of excellent podcasts
2:01
Speaker 1: here at Bloomberg right now. I'm not sure if you
2:03
Speaker 1: guys realize that one of them is called game Plan
2:05
Speaker 1: and that's all about life at the office. So Rebecca
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Speaker 1: Greenfield is one of their co hosts, and she's with
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Speaker 1: us today in the studio. Hey, re Becca, Hey, thanks
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Speaker 1: for having me glad you could be with us. So
2:17
Speaker 1: so this has been getting lost in all the madness
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Speaker 1: of this election campaign, but childcare is actually the one
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Speaker 1: issue that both candidates sort of agree on, at least
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Speaker 1: in that it's very expensive and the government should help
2:28
Speaker 1: Americans by defraying some of the cost. That's what already
2:31
Speaker 1: happens in a lot of European countries that are heavily
2:34
Speaker 1: subsidized childcare, especially in Scandinavia and Western Europe exactly. And
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Speaker 1: Donald Trump released a plan last month to tackle the
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Speaker 1: cost through taxidental deductions and rebates and a mandated maternity lead.
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Speaker 1: Hillary Clinton, on the other side, has also pledged universal
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Speaker 1: pre kindergarten access and expansion of the child tax credit
2:54
Speaker 1: and scholarships for parents who are in school now. As
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Speaker 1: my DC colleague Michelle Gemmers, it was reported a recent
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Speaker 1: study showed full time care and centers for young children
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Speaker 1: costs almost ten thousand dollars a year, about what you'd
3:07
Speaker 1: pay for tuition at an in state college, and if
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Speaker 1: you want in home caregiver like a nanny, it'll cost
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Speaker 1: you around twenty eight thousand dollars. It's more than half
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Speaker 1: of median US household income on the other hand, you
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Speaker 1: have childcare workers making very low wages, just under ten
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Speaker 1: dollars an hours, the median wage in the United States.
3:28
Speaker 1: And as a point of comparison, people who walk dogs
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Speaker 1: make more money. And you're kind of familiar with that, white, right, Kate. Yeah,
3:36
Speaker 1: as I can personally attest on my bank account, can
3:38
Speaker 1: personally attest dog dog walking, especially here in New York
3:41
Speaker 1: is really expensive. Um, just as a way of comparison,
3:44
Speaker 1: my dog walker is about fifty dollars a day, and
3:48
Speaker 1: um my dog is not the only one, so he's
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Speaker 1: collecting that from with you other people too, So it's
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Speaker 1: pretty lucrative business here. Well, we're going to try to
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Speaker 1: reconcile all these strings today and talking about childcare. And
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Speaker 1: later on we'll talk with the head of a company
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Speaker 1: that runs more than two hundred childcare centers in the
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Speaker 1: US and he'll he'll tell he'll tell us about how
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Speaker 1: this all came to be. But first, Rebecca, in your
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Speaker 1: day job as a reporter, you've written a lot about
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Speaker 1: this issue. What have you found? What can you tell us?
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Speaker 1: So one thing that I tried to find out is
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Speaker 1: just like why childcare is getting getting so much more
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Speaker 1: expensive and is so expensive. UM. Like you said, it's
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Speaker 1: really frustrating for parents, especially working parents. UM. And it's
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Speaker 1: one of these things that it's very hard to make
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Speaker 1: more efficient. Even though you've mentioned that labor costs are
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Speaker 1: very low per person, UM, it gets very expensive really
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Speaker 1: fast because you know, there are regulations for really good
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Speaker 1: reasons about how many people can watch your children, UM,
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Speaker 1: and the real estate of the space, and it's state
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Speaker 1: by state, so it's a bit confusing. But you can
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Speaker 1: only bring down labor costs so much for UM a
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Speaker 1: childcare center. So that's definitely one thing that I found
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Speaker 1: that keeping the price up. Another possibility for driving the
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Speaker 1: price up is that the only way really to bring
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Speaker 1: it down would be government funding and UM, as you
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Speaker 1: mentioned here in the U S, there's a lot of
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Speaker 1: debate about how to do that, and the candidates have
5:15
Speaker 1: been talking about it, but so far it's been like
5:17
Speaker 1: a really piecemeal process. UM. And for now people have
5:21
Speaker 1: to rely on UM their own money or if they're
5:25
Speaker 1: very very lucky, their employers to offer them some sort
5:29
Speaker 1: of help. Yeah, let's talk about this somewhere. I mean,
5:32
Speaker 1: as as you guys may know, in the interest of
5:34
Speaker 1: full disclosure, I do have a personal stake in this issue.
5:37
Speaker 1: I have two young daughters, aged four and two. Because
5:41
Speaker 1: I live in Maryland and we don't have Universal pre
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Speaker 1: K there or other kinds of subsidies for young children,
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Speaker 1: they're both in private preschool now, which is taking up
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Speaker 1: a very significant chunk of my income. And I'm looking
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Speaker 1: forward to next year when my older daughters in kindergarten
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Speaker 1: and some of that will start to go away. But anyway,
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Speaker 1: I'm lucky that I can afford this anyway and send
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Speaker 1: my kids to a decent place. But Rebecca, how how
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Speaker 1: do most parents of young kids make it work? It's
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Speaker 1: really difficult for a lot of people. I mean, I've
6:12
Speaker 1: heard of a lot of families that have to working
6:14
Speaker 1: parents where both the parents work to basically pay for daycare.
6:19
Speaker 1: I mean, which is kind of crazy when you think
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Speaker 1: about it. If you know, one person could stay home
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Speaker 1: and care for the kids, but both people want to
6:26
Speaker 1: work UM and so they have to work. But basically
6:28
Speaker 1: that entire salary is just going towards daycare. So that's
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Speaker 1: one way people do it. I mean, there are some
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Speaker 1: programs here in New York. We do have UM pre
6:37
Speaker 1: K and UM there's Headstart programs, but it's it is
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Speaker 1: really difficult for a lot of families, and there have
6:43
Speaker 1: been a lot of stories written about people struggling to
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Speaker 1: pay for childcare. It seems that from what I'm hearing,
6:49
Speaker 1: and I don't have children yet, so I, you know,
6:51
Speaker 1: I haven't had to deal with this yet, but it
6:52
Speaker 1: seems like it's kind of like a state by state approach.
6:54
Speaker 1: Is that right? Yeah, because we don't have federal laws
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Speaker 1: for most of these things, much like maternity leave, family leave,
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Speaker 1: paid sick ly. Um. The changes are happening on municipal
7:06
Speaker 1: and state levels. Interesting when the funding then comes from
7:11
Speaker 1: state in local taxes only. Yeah, it really depends on
7:14
Speaker 1: the program, Rebecca. What about companies that have childcare facilities
7:19
Speaker 1: in the house? It seems like maybe that used to
7:21
Speaker 1: be more common, but now it's dwindled to almost nothing.
7:24
Speaker 1: What's going on with that? Yeah? I wrote a story
7:27
Speaker 1: recently about that, how you know? And it was never
7:30
Speaker 1: a hugely popular benefit, but it was something that a
7:34
Speaker 1: chunk of companies were offering. And now something like two
7:37
Speaker 1: of companies offer subsidized or unsubsidized childcare um at or
7:43
Speaker 1: near a workplace, which is a benefit that employees obviously
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Speaker 1: really like it's just against so expensive and complicated for
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Speaker 1: companies to offer it that even now as we're seeing
7:53
Speaker 1: an increase in a lot of benefits like this, like
7:57
Speaker 1: we have seen an increase in certain industries of maternity leave,
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Speaker 1: in print to leave and family friendly benefits because they
8:04
Speaker 1: know that's what employees want. UM, daycare on site just
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Speaker 1: hasn't picked up because it's like a huge headache for
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Speaker 1: companies and they'd rather just the way more popular way
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Speaker 1: to deal with this. And what we have here at
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Speaker 1: Bloomberg is that you just can put tax deducted money
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Speaker 1: towards your kids childcare. But only five dollars here as
8:28
Speaker 1: as I'm as I've become well aware of it, right, yeah,
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Speaker 1: that's the limit. Um. Yeah, So that's like a much
8:34
Speaker 1: easier benefit. You know, they don't have to worry about
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Speaker 1: staffing or liability of having kids nearby or all those
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Speaker 1: things that come with the complications of running a daycare.
8:44
Speaker 1: All Right, we're going to take a quick break, but
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Speaker 1: when we come back, we're going to get some answers
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Speaker 1: straight from an authoritative source. His name is Scott Cotter,
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Speaker 1: and he's the president and CEO of Childcare Network brought
9:04
Speaker 1: to you by Bank of America. Merrill Lynch. Seeing what
9:06
Speaker 1: others have seen, but uncovering what others may not. Global
9:09
Speaker 1: Research that helps you harness disruption voted top global research
9:13
Speaker 1: from five years running. Merrill Lynch, Pierce, Venner and Smith Incorporated.
9:27
Speaker 1: Welcome back. We're joined now by someone who can give
9:29
Speaker 1: us an insider's view of childcare costs. Scott Cotter is
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Speaker 1: the president and CEO of Childcare Network, has two hundred
9:36
Speaker 1: and forty nine childcare centers across thirteen states in the
9:39
Speaker 1: southeastern US, from Texas to Florida and all the way
9:43
Speaker 1: up to Richmond, Virginia, not too far from d C.
9:46
Speaker 1: He's joining us now by phone from his headquarters in Columbus, Georgia. Scott,
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Speaker 1: thanks so much for being our guest today. Yeah, thank
9:53
Speaker 1: you for inviting me. I appreciate the opportunity. Glad to
9:56
Speaker 1: have you. Let me ask you first, how would you
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Speaker 1: break down your flee fees you're telling me earlier it's
10:02
Speaker 1: around people paying average of around seven hundred bucks a month.
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Speaker 1: Where do those dollars go into your costs? When it
10:08
Speaker 1: comes to labor facilities, administration, clients, insurance and so on
10:13
Speaker 1: and so forth. Yeah, absolutely, well as you would expect,
10:17
Speaker 1: you know, in a service business like this. Uh, we
10:19
Speaker 1: employ a lot of teachers. So you know, our number
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Speaker 1: one cost is labor, and it's roughly, you know, about
10:25
Speaker 1: half of our of our total costs, you know, overall
10:27
Speaker 1: in terms of the direct operating costs you know of
10:30
Speaker 1: a school, you know, the administrators, you know, through the uh,
10:34
Speaker 1: you know, teachers and other floating staff you know that
10:36
Speaker 1: we employ. You know, facility cost you're gonna be you
10:40
Speaker 1: know another and that's going to be roughly you know,
10:43
Speaker 1: the you know, the rents on the properties, the property taxes, UH, insurances,
10:48
Speaker 1: you know those those cost um and then you've got
10:51
Speaker 1: another another in a variety of variable costs from food,
10:56
Speaker 1: your supplies, consumables, utilities, repairs and and it's on a facility,
11:01
Speaker 1: uh you know those types of things. And in our
11:03
Speaker 1: corporate you know, administrative cost probably run between new five
11:07
Speaker 1: to six and a half percent you know, you know,
11:08
Speaker 1: per year. Uh. And that's generally how things you know,
11:11
Speaker 1: break down. I mean, it's certainly, but obviously the number
11:14
Speaker 1: one component is is the labor force, for sure? And
11:17
Speaker 1: which of those costs have seen the fastest increase in
11:20
Speaker 1: recent years, has anything been slowing or falling? And where
11:23
Speaker 1: have you been able to save money? Well, I'd say,
11:26
Speaker 1: you know, on the saving side, you know, generally food
11:29
Speaker 1: costs have been coming down or at least been much
11:31
Speaker 1: more stable. Uh. You know, we do provide um also
11:35
Speaker 1: after school program, so we've got you know, a fleet
11:38
Speaker 1: of six hundred busses that are on the road every day.
11:40
Speaker 1: And and so you know, gas cost over the last
11:42
Speaker 1: five years have been up and down, and certainly we've
11:44
Speaker 1: been in a down phase, you know, for the last
11:46
Speaker 1: you know, eighteen months or so. And I think some
11:48
Speaker 1: of that foodput has helped, you know, on the food
11:50
Speaker 1: cost side as well. But even though you know, individual
11:54
Speaker 1: unit costs for food or down, um, you know, the
11:56
Speaker 1: regulatory changes that us d A made, you know, with
11:59
Speaker 1: the meal components, you know, we're actually investing in in
12:02
Speaker 1: higher quality uh you know food that we're serving today
12:05
Speaker 1: with the you know, the changes in the in the
12:06
Speaker 1: food pyramid. So while the unit costs are less, you know,
12:09
Speaker 1: we're actually actually putting more dollars towards food associated with
12:12
Speaker 1: the menu changes you know that had been made. And
12:15
Speaker 1: then on the on the labor side, certainly if you
12:18
Speaker 1: go back to UM, you know, coming out of the
12:20
Speaker 1: recession in two thousand and eleven and on a for
12:22
Speaker 1: a child care business, that's definitely a you know, a
12:25
Speaker 1: double edged sword in that, you know, uh, it's jobs
12:28
Speaker 1: that drive the need for parents, you know, to seek
12:31
Speaker 1: out you know, child care services, and so you know,
12:34
Speaker 1: demand coming out of the recession was certainly lower, but
12:37
Speaker 1: at a ten percent unemployment, you know, the labor pool
12:40
Speaker 1: that we had to draw fund from was you know
12:42
Speaker 1: significantly greater, and we had you know, many more opportunities
12:46
Speaker 1: on on the employment side, particularly with you know, higher
12:48
Speaker 1: credential folks who may have been displaced you know, out
12:51
Speaker 1: of the public school systems and that type of thing.
12:54
Speaker 1: So but really, you know, over the last you know
12:56
Speaker 1: five to six years, as the you know economy has
12:58
Speaker 1: recovered and the labor repool has tightened up, and we've
13:01
Speaker 1: really seen uh you know, pretty significant tightening you know
13:04
Speaker 1: in the last you know eighteen months UM and so
13:08
Speaker 1: really there's been a real driver on you know, you know,
13:10
Speaker 1: our cost per hour of labor in the last you
13:13
Speaker 1: know a couple of years as we continue to try
13:15
Speaker 1: to uh, you know, maintain the you know, the quality
13:18
Speaker 1: of our staff, and particularly the teacher credential component because
13:21
Speaker 1: one thing that you know, most states are not changing
13:24
Speaker 1: the minimum requirements, but they've instituted what are called voluntary
13:29
Speaker 1: quality um rating and Improvement systems q r i S systems,
13:33
Speaker 1: and so we do our best to participate in those systems.
13:36
Speaker 1: Systems have been you know, highly successful. But you know,
13:39
Speaker 1: one of the measurements that they use is the education
13:41
Speaker 1: level of your staff. And in order to score high
13:45
Speaker 1: in those measurements, so if I have an associate degree
13:48
Speaker 1: teacher and she worked or leave, that I've got to
13:51
Speaker 1: go back into the workforce and try to replace that
13:52
Speaker 1: individual with an associate degree teacher in order to maintain
13:56
Speaker 1: my current rating. And that's where we're seeing you know,
13:59
Speaker 1: signific think at UH challenges today and replacing someone you know,
14:04
Speaker 1: on the higher end of the credentials and ultimately, you know,
14:07
Speaker 1: the you know, incurring higher costs to employ that that
14:11
Speaker 1: that person moving in and and I'd also say, while
14:14
Speaker 1: we um you know, the cost for you know, labor
14:17
Speaker 1: hour or going up today pretty pretty rapidly. Our business
14:21
Speaker 1: has just become you know, so much more complex. And
14:23
Speaker 1: I don't know that this is necessarily specific, just to
14:27
Speaker 1: you know, child care network, but we have lots of
14:29
Speaker 1: just other programs outside of just childcare for working parents.
14:33
Speaker 1: So we're involved in Headstart Early head Start, State pre
14:36
Speaker 1: K programs, and you know, in a variety of other
14:39
Speaker 1: you know, very specialized programs. And you know, each one
14:42
Speaker 1: of those comes with its own unique set of programmatic
14:44
Speaker 1: requirements and regulations. And so ultimately we're just having to
14:48
Speaker 1: employ more people to you know, run our business, to
14:52
Speaker 1: you know, ensure you know, the quality control side, to
14:55
Speaker 1: invest in professional development, you know, with our teachers from
14:58
Speaker 1: a from a training perspective. So the business has definitely
15:01
Speaker 1: gotten more complex and and and ultimately, you know, we're
15:04
Speaker 1: just generally takes more people, you know, to run a
15:06
Speaker 1: high quality center. What what can I interrupt for a second?
15:09
Speaker 1: What you know, would you say your profit margins are reasonable?
15:12
Speaker 1: Have they gotten bigger, smaller over the last five to
15:15
Speaker 1: ten years. I would just say they're stable. I mean,
15:18
Speaker 1: you know, we've managed to uh, you know, coming out
15:21
Speaker 1: of the recession, We've managed to grow our enrollments, so
15:23
Speaker 1: our facilities are more highly utilized. But again, these other
15:27
Speaker 1: cost drivers where we are you know, investing in the
15:30
Speaker 1: quality of our programs and trying to improve you know,
15:33
Speaker 1: our our rating in the in the systems they've been
15:36
Speaker 1: it's you know, it's been stable. Um, you know, it's
15:39
Speaker 1: you know three to five percent you know on you know,
15:42
Speaker 1: on the bottom line, so it's you know, very thin margins.
15:45
Speaker 1: And again that's across the network of you know, two
15:47
Speaker 1: hundred and fifty schools, So you know it's ah, um,
15:50
Speaker 1: you can be you know somewhat variable because our in
15:53
Speaker 1: childcare it's a very fixed cost operation. So you know,
15:57
Speaker 1: the first hundred students in a building, um may not
16:01
Speaker 1: even get you to break even depending upon you know
16:03
Speaker 1: what those fixed documentcy costs. So it's only the last
16:06
Speaker 1: few children in a particular classroom or you know across
16:10
Speaker 1: a building, you know, a facility that where any margin
16:13
Speaker 1: would be generated in terms of you know profits. So
16:17
Speaker 1: this all sounds pretty reasonable the way the way you're
16:19
Speaker 1: describing it, even while you know people like to complain
16:23
Speaker 1: about the cost of childcare in this country takes a
16:26
Speaker 1: big chunk, but it sounds like, you know, it's not
16:28
Speaker 1: a terribly uh you know, hugely profitable business and there's
16:32
Speaker 1: all sorts of costs and issues you have to deal with.
16:34
Speaker 1: Is there anything outside of direct government subsidies or kinds
16:40
Speaker 1: of tact additional tax deductions that would lower the cost
16:43
Speaker 1: for the for the for the customer, you know, unfortunately not.
16:48
Speaker 1: I mean it's just an expensive operation to to maintain.
16:52
Speaker 1: And you know you think about you know, the cost
16:53
Speaker 1: of say a pre K program you know in the
16:55
Speaker 1: public schools. Well, you know those programs are only operating
16:58
Speaker 1: for for the school days, say six six and a
17:00
Speaker 1: half hours. Uh, you know, in you know, in child
17:03
Speaker 1: care settings, you know, we're open for for twelve hours
17:06
Speaker 1: or more per day. Uh, you know, we don't have
17:08
Speaker 1: a specific drop off and pick up time. You know,
17:11
Speaker 1: parents we're trying to meet at working parents needs, so
17:13
Speaker 1: depending upon their schedules. You know, children are coming in
17:16
Speaker 1: and out of the program, you know, throughout the day.
17:19
Speaker 1: And um, so from trying you know, having to have
17:21
Speaker 1: a staffing model that meets those uh you know, parents needs,
17:25
Speaker 1: it's just it's pretty pretty intensive, to be honest, I
17:28
Speaker 1: mean in terms of total hourly um you know, an
17:31
Speaker 1: hourly schedule that has to be maintained you know in
17:34
Speaker 1: a center. So um, you know, I really think it's
17:37
Speaker 1: ultimately gonna take you know, as a country and US
17:40
Speaker 1: you know, deciding that this you know, certainly given all
17:42
Speaker 1: the brain research you know that's out there that you know,
17:46
Speaker 1: this is something that's very foundational. And you know, we've
17:48
Speaker 1: got to prepare to students for you know, for kindergarten
17:51
Speaker 1: so that they're prepared for success what you know, when
17:53
Speaker 1: they enter the polic school system. And and you know today,
17:56
Speaker 1: I just don't think we we are have are making
17:59
Speaker 1: those investments. I mean, certainly over the last five years,
18:02
Speaker 1: there's been a lot of talk um and and uh,
18:06
Speaker 1: you know, I see potential, you know, on the horizon,
18:08
Speaker 1: both with you know, both with what both candidates have
18:11
Speaker 1: have somewhat promised in their campaigns, and there's been an
18:14
Speaker 1: increased focus on childcare. And well, if I can jump
18:17
Speaker 1: in speaking about those two campaigns, I mean, you know,
18:20
Speaker 1: they both have come out with two different approaches to
18:24
Speaker 1: pre kindergarten care and childcare. I mean, or is there
18:27
Speaker 1: one in particular that you, as a business person prefers
18:31
Speaker 1: that you think would be better for your business? Not
18:35
Speaker 1: not specifically, because they haven't really provided a great deal
18:38
Speaker 1: of detail. I mean, one thing that I would hope
18:40
Speaker 1: that you know, we can preserve, you know, through any
18:44
Speaker 1: additional investments that are made, whether they be federal or
18:48
Speaker 1: various state investments, is to be able to preserve parental choice.
18:52
Speaker 1: You know, I think that that a one size fits
18:54
Speaker 1: all model is not going to be best and ultimately, um,
19:00
Speaker 1: you know, not lead to the outcomes that you know
19:02
Speaker 1: that we're looking for you for children. So I think
19:05
Speaker 1: that we should be able to have a variety of
19:07
Speaker 1: models and variety of settings that you know, can you
19:10
Speaker 1: know that are all quality of course, um, and meet
19:13
Speaker 1: those requirements. But but I think just giving giving parents
19:16
Speaker 1: choice in whatever systems are developed is critically important to
19:20
Speaker 1: the you know, overall you know success because I generally
19:25
Speaker 1: you just believe that's important to be maintained today, Rebecca,
19:28
Speaker 1: do you want to jump in with one question that
19:30
Speaker 1: you could not find the answer to in your previous reporting. Yeah.
19:34
Speaker 1: I so you may have alluded to some of the
19:36
Speaker 1: answers already, but I haven't trying to track down why
19:39
Speaker 1: childcare costs are reportedly rising faster than inflation. Um, and
19:45
Speaker 1: I it seems like maybe you think like the competitive
19:48
Speaker 1: job market might have to do with it. Are you
19:49
Speaker 1: paying your labor more? Yeah? No, absolutely, no, absolutely I'm
19:53
Speaker 1: paying more and I see that, and really I think
19:55
Speaker 1: some of the UM data and statistics that are out there,
19:58
Speaker 1: you know, there's a lag peer read. Uh, And I've
20:01
Speaker 1: seen a real acceleration UM in those costs, you know,
20:04
Speaker 1: in the last you know, twenty four months, I found that,
20:07
Speaker 1: you know, it's reported that child care workers make something
20:10
Speaker 1: like ten dollars an hour. It's something like really low rate,
20:13
Speaker 1: but it sounds like you pay them more than that.
20:16
Speaker 1: Now i'd say, you know, we're in that range. I mean,
20:18
Speaker 1: we're in depending upon an individual's credentials. And again keep
20:22
Speaker 1: in mind that we operate in the South predominantly, you know,
20:25
Speaker 1: we're not we are in a number of you know,
20:27
Speaker 1: urban or metro markets, but we're also across you know
20:30
Speaker 1: a lot of smaller, you know, sort of second tier cities.
20:33
Speaker 1: But you know, so we're in that eight to twelve
20:35
Speaker 1: dollar an hour plus you know range. Uh. You know,
20:38
Speaker 1: there are other benefits associated with that, and we're particularly
20:42
Speaker 1: many of our teachers also have children in our centers,
20:46
Speaker 1: so they ultimately get significantly reduced um you know, childcare.
20:49
Speaker 1: So you sort of look at that real wage, you know,
20:54
Speaker 1: if they had to place their own child in childcare
20:56
Speaker 1: and then seek employment you know elsewhere in terms of
20:58
Speaker 1: what that might uh look like. But there's definitely been
21:01
Speaker 1: a real acceleration you know over the last you know,
21:03
Speaker 1: twenty four months in wage costs for us as we're
21:06
Speaker 1: you know, in the market trying to compete you know,
21:08
Speaker 1: for highly qualified staff. And then I guess, as I
21:12
Speaker 1: said earlier, we're just employing more people because again, the
21:15
Speaker 1: business is becoming more complex. There's so many other programmatic
21:19
Speaker 1: requirements from this program to that one that just takes
21:21
Speaker 1: more people. And and in all honesty, you know, I
21:24
Speaker 1: think if you were to pull my administrators today, um,
21:27
Speaker 1: you know, there there's pretty significant fatigue and burnout you
21:31
Speaker 1: know right now, Uh you know, with them just given
21:34
Speaker 1: you know, all the additional responsibilities that they have today, Um,
21:39
Speaker 1: you know, with various you know, oversight, you know, which
21:43
Speaker 1: is necessary. I'm not I'm not complaining about it, but
21:46
Speaker 1: it's just a significant the different environment than even just
21:49
Speaker 1: five years ago. All right, Scott, We're going to have
21:52
Speaker 1: to leave it there. This has been very, very informative,
21:55
Speaker 1: and we really appreciate your time. Thank you so much
21:57
Speaker 1: for joining us. No, I appreciate the opportunity to thank
22:00
Speaker 1: you very much. And Rebecca, thank you very much for
22:02
Speaker 1: being with us too. Thanks for having me all right well,
22:05
Speaker 1: Benchmark will be back next week and until then, you
22:07
Speaker 1: can find us on the Bloomberg Terminal and Bloomberg dot com,
22:10
Speaker 1: as well as on iTunes, Pocketcast, and Stitcher. While you're there,
22:14
Speaker 1: take a minute to rate and review the show so
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Speaker 1: more listeners can find us and let us know what
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Speaker 1: you thought of the show. You can talk to us
22:20
Speaker 1: and follow us on Twitter at at Scott Landman. You
22:23
Speaker 1: can find me at by Kate Smith, and you can
22:25
Speaker 1: find our guest Rebecca at RZ Greenfield and our guest
22:29
Speaker 1: company is on Twitter at at Childcare n E t
22:33
Speaker 1: w K. Thank you very much and see you next week.
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