The child care industry faces multiple challenges as the state heads toward a new legislative session.
Advocates say now is a great opportunity for lawmakers to stabilize and support the business model providers.
The state of child care is no secret in South Dakota, with low pay, low margins, and shuttering businesses contributing to a challenging situation for providers.
Kayla Klein is director of Early Learner South Dakota, an early-childhood education advocacy group. She contextualized the losses businesses are seeing.
“In the rural settings we’re looking at a loss upwards of $230,000 to $240,000 on an annual basis," Klein said. "In the more urban areas, that number probably goes down to about $15,000 to $20,000 a year.”
That means many of these businesses are operating at a loss statewide, a model Klein said is impossible long term.
“If you’re not getting the true cost of what you’re providing care for, you’re operating essentially at a deficit right out the gate," Klein said. "We know that kids need childcare assistance, and we know that because only 7% of the kids in South Dakota who qualify for child care assistance that are actually receiving it. There’s a huge gap in care and assistance these families are needing.”
And with lawmakers due to reconvene in less than a month, Klein said it’s time to support a business she describes as essential.
“We’re taking a focus on trying to support the childcare assistance piece for providers," Klein said. "At the very least, if we could get reimbursement rates to match the true cost of care, instead of the market rate, that would be extremely beneficial.”
According to statistics from Indeed, the average South Dakota childcare worker makes just above $14 per hour.