Ramstad: Minnesota is catching up after falling behind on child care – Star Tribune

Tales of Minnesota exceptionalism are spun so persistently by political and business leaders and news media that, when the state falls really behind on something, it feels pretty shocking.
I’ve felt that shock again and again since writing two columns on child care last month.
The first suggested Minnesota policymakers should consider copying Iowa’s tax breaks for businesses that provide child care. The second suggested the top-down, expensive but effective approach of Finland and other Nordic countries as a model.
Numerous parents, policymakers and experts reached out to let me know I was barely scratching the surface of the problem or the solutions. Some told me about other states that do better than us.
And some said I made a mistake in the first column by writing the phrase “making child care a healthy industry again.” Child care has never been a healthy industry, they said. The perception that it was healthy in the past overlooks that women were providing at relatively low cost when their career options were more limited.
I’m learning more about child care because of the role it can play in bringing more Minnesotans to work. The state’s workforce is constrained by slow population growth and the exit of baby boomers into retirement. With labor force participation already at some of the highest levels in the U.S., Minnesota has to work hard on the margin to make work more attractive or simply possible. Parents of young children are in that margin.
Earlier this month, a few days before the Legislature convened its 2024 session, a handful of state lawmakers, aides to Minnesotans in Congress, child care center inspectors, consultants and others met at Leo Augusta Children’s Academy, a child care center that opened in Blooming Prairie in 2022. They talked about how to extend help for child care to more Minnesotans.
They started with creating a more graduated set of benefits rather than the cutoff that exists when a family’s income exceeds $46,423.
“The families who are hurting are middle income,” Amy Hinzmann, board chair of Leo Augusta, said. “As soon as baby number two arrives, they start exiting our facility and dropping out of the workforce.”
Rep. Natalie Zeleznikar, a Republican serving her first term in the Minnesota House, drove all the way from Hermantown in northeast Minnesota to Blooming Prairie, which is about 30 miles north of the Iowa border, for the meeting. A career nursing home administrator, she noted that many of the challenges in child care also exist in elder care. The state licenses people in the two fields separately, but maybe it should make it easier for prospective workers with a single caregiving standard, she said.
“We keep setting up requirements that have nothing to do with outcomes,” she said.
Beyond the economic prism, the child care issue requires a deeper rethinking about families and education that hasn’t taken place in America since high school attendance became common a little more than a century ago.
In essence, that rethinking boils down to erasing the line that divides childhood at age 5 in the minds of most people. Before age 5, society does relatively little for children. After age 5, it invests in them heavily via public education.
“Education doesn’t start at age 5, and care doesn’t end at age 5,” said Elizabeth Davis, an economist at the University of Minnesota. “This idea that one of them is child care and one of them is education is a false dichotomy. Brain science certainly shows the importance of early experiences for later everything, later education, later quality of health, later labor outcomes.”
A day after my first child-care column last month, Davis and three colleagues published a study showing that providing vouchers directly to parents is a hugely efficient way to increase both the use of child care services and the supply of them.
“There is expansion,” said Aaron Sojourner, a Minneapolis-based economist for the W.E. Upjohn Institute for Employment Research and one of the co-authors. “If I’m a provider, it’s easier for me to get by because revenue is more predictable. If I’m thinking of entering the business, I’m more likely to do it because there’s more effective demand.”
State lawmakers last year significantly raised the reimbursement rate to child care providers who use the federal/state Child Care Assistance to serve low-income Minnesota families. The state slashed that rate about 20 years ago and fell behind nearly all other states. In 2019, the federal government said the state would be penalized if it didn’t meet minimum requirements.
The Legislature last year brought Minnesota back to where it was before the Pawlenty-era cuts, but they didn’t provide any help to middle-class families. The lawmakers, however, did set a goal to get child care costs down to 7% of household income while also improving providers’ finances to a level where care staff are paid around the level that school teachers are.
That’s quite lofty when so many Minnesotans still view child care as a kind of welfare program rather than the economic necessity that it has become.

Evan Ramstad is a Star Tribune business columnist.
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