Employers say higher minimum wage is hard on childcare, expecting more challenges in 2018
TRI-CITIES, Wash. – It's been nearly a year since the new minimum wage increase in Washington was implemented.
Coming up at the start of the new year, another wage increase will go into effect. Plus, businesses will also have to budget for paid sick leave for all employees, not just full timers.
The minimum wage increase of 2017 was a shock to small businesses, especially childcare providers.
Action News spoke with leaders at Kid’s World Childcare in the Tri-Cities at the start of the wage increase. On Monday when we followed up, their administrators said this year was full of fiscal challenges.
"Our priority is quality of care and how are we going to continue to give quality care and keep our doors open," said Ginger Still, executive director of Kid's World Childcare in the Tri-Cities.
With more than $150,000 in payroll increase this year, Still said they had to make tough decisions, including closing their Pasco location.
"Regardless of the amount of changes that we made it was not going to survive," Still said. "We don't profit $100,000 and so that money had to come from somewhere."
‘Somewhere’ also included reducing service hours, losing employees through attrition, and passing some of the pay increase off on parents.
"It hits the employer, the businesses, the consumer, it hits everybody," Still said.
Plus, Still said they aren't alone.
"Around the state of Washington childcare centers have been closing and the Department of Early Learning is quite aware of how many childcare centers closed down."
Looking back on the past year, Still said they've not only faced financial pains but physical pains too.
"When you lose six or seven staff, then you have to absorb the workload of those people who are no longer there," she said.
Still and her staff are trying to balance the budget once again, anticipating another $0.50 increase in January of 2018, $0.50 in 2019 and $1.50 2020.
Plus, providing paid sick leave will be a double hit to childcare centers because they must pay for the person gone and they are required to bring extra staff in to fill their place.
"Every year this is going to be an issue," Still said.
Today, looking at the books, she finds herself asking the same question.
"Where are we going to come up with $70,000?" she said.
However, their goal is to find a way to lessen the burden the on parents.
"There's only so much we can cut,” she said. “So we'll have to see how that plays out as far as making changes for the upcoming year."