Child care is essential to rebuilding Alaska’s economy

The COVID pandemic has been devastating for many working families, and women have been disproportionately affected. More women have been pushed out of the workforce, in many cases because of a lack of child care, than at any other time in history.

In the Alaska House of Representatives, the Labor and Commerce Committee has been working to strengthen our child care system. It’s not enough to rebuild the prior system — which suffered from inadequate supply, as well as persistent low wages and benefits. We need systemic reforms so working families can find quality, affordable child care, and so that child care workers earn a living wage with benefits.

Fortunately, recent federal reforms present us with a once-in-a-lifetime opportunity to transform the child care industry. Congress’ passage of the American Rescue Plan included a permanent increase in child care funding of $76 million per year in Alaska. As a result, if we put in place the right policy framework, we can raise wages and benefits for child care workers, who currently earn an average of $13.21 per hour, and expand availability of child care without raising prices on parents. We have to do both — merely increasing subsidies in a system that underpays workers won’t fix the problem of high turnover and inadequate supply of child care.

To capitalize on this opportunity, Labor and Commerce committee members have developed multiple, complementary pieces of legislation. First, we have already passed out of committee House Bill 121, which provides tax credits for employers who sponsor or subsidize child care for employees. Currently, there are only a small number of employers who offer child care on the job site. It is a huge benefit for working parents that reduces employee turnover and increases job satisfaction. Our legislation would also offset employer costs if they offer a voucher for employees to use offsite child care facilities. This pro-business legislation encourages but does not require employers to make child care more widely available, and is a win-win for businesses and their employees.

Our committee is also considering legislation — HB 149 — to raise wages and benefits for numerous employers through negotiations with the state. This legislation is based on a model 11 other states use, after Illinois developed it in 2005. Here’s how it works: Child care providers and their employees vote on whether they want to negotiate on wages and benefits with the state. If a majority of providers vote yes, they negotiate wage and benefit increases for the sector. Employers who don’t want to participate don’t have to, but evidence from other states suggest that most do, because higher wages and benefits are good for everyone in the industry.

Industry collaboration with the state is key, because the state will manage the forthcoming $76 million per year in additional federal child care resources. Employers and employees should be at the table to allocate this funding efficiently, raising wages and benefits while expanding access for working parents.

For too long, the child care industry has suffered from a low-wage trap that results in inadequate supply of child care, high turnover, and pressure on parents to seek care in unlicensed facilities. We have an opportunity to reverse the disproportionate effects of the pandemic on working women and address longstanding structural problems in the child care industry. If we’re successful, we’ll help rebuild child care capacity at a time when Alaskans are ready to get back to work.

Reps. Zack Fields and Ivy Spohnholz co-chair the House Labor and Commerce Committee.

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