Child Care As Economic Indicator
Mon September 16, 2013
Job Recovery From Small Town To Big City
The economic downturn attributed to the Great Recession tested the resilience of many workers and careers.
King County’s unemployment rate is more than 2 percent lower than the national rate. In fact, the Seattle area is seen as a bright spot in the recovery. But the farther you get from the big city, the more likely a different picture emerges. In some rural areas, incomes and job security are lower, and this has made for a tougher recovery.
As you turn onto the gravel driveway to Amber Rooks' home in rural Skagit County, a miniature yellow traffic sign puts visitors on notice: "Caution, Children at Play."
It’s a fair warning. Inside, a group of toddlers giggle and squirm as their classmates put on an imaginative puppet show. Rooks looks on proudly, with an occasional shush for the audience.
This day care Rooks started more than 17 years ago now fills the lower level of her home in this rural community of Lyman, about 20 miles east of Mount Vernon.
“Who’s ready for cheese and sour cream?” Rook asked at lunchtime during a recent visit, as she ladled homemade taco soup into the kids’ bowls. The soup is loaded with fresh vegetables and, as Rooks predicted, nearly every kid wants seconds.
In Rooks' blue-collar community, her day care parents do jobs like clean houses, cut hair or teach public school. Rooks felt the ripple effect of the recession as parents lost jobs and day cares lost kids.
“A lot of them just had no other choice but to close,” Rooks said. “So, your heart has to be into it right now if it’s what you want to do because it’s hard to afford the quality to run your business like it should be.”
Child Care Industry As An Economic Indicator
Fluctuations in the child care industry give some indication of how the recession affected the workforce in different locations, especially for parents in jobs that are lower paid, less stable or in a rural area.
In the past five years, about 800 licensed child care facilities have shut down across the state. In Skagit County, one out of every three closed. Many day cares that managed to stay in business expanded their hours, ran up debt or cut back on their programs.
Rooks struggled to keep her business afloat through the downturn. She took in more part-time kids and shopped for cheaper groceries. Also, to meet parents’ needs and fill up her day care, she expanded to a 14-hour day, beginning at 4:30 am.
“Some [parents] were going to be out of work if they weren’t willing to be more flexible with their employer,” Rooks said. “I had quite a few families that were laid off, or a two-hour shift a day wasn’t cutting the bills so they were better off not working.”
A few years ago, Rooks tried to estimate her hourly pay, factoring in business expenses and the extra hours she’d clean, shop and plan activities. Her wage penciled out to around $4 an hour. She said it's definitely less than that now since her income is lower and expenses are higher for things like electricity, gas and groceries.
In Washington, child care workers earn on average around $23,000 a year. People like Rooks, who manage or own a facility, tend to make a bit more.
This fall, Rooks’ day care is nearly full to capacity again, but business is still shaky. She still sees instability with the parents’ jobs and finances.
“Whether it’s bad checks or I’ll pay you next week, I’ll pay you next week – by nature I want to help them out, but that’s taking a big chunk lately more than anything – bad funds," she said.
Rooks’ business is just one of many feeling the pinch in this rural area, even though economists say the recession ended in 2011.
Rural To Urban Differences
Just down the road at Lyman’s historic City Hall, Deborah Boyd, the town’s clerk/treasurer, said the recession hit Lyman pretty hard. “Yeah, we were hurt,” she said, referring to reduced government revenue, business closures and other job losses.
Asked if she thinks the recession is over in Lyman, Boyd let out a deep sigh. “No, I wouldn’t say that,” she said. “I wouldn’t say it’s over, but I’d say we’re getting to the peak of the bad part.”
Boyd pointed to some hopeful signs of recovery. Three new homes are being built in Lyman – that’s a big deal for this town of about 400 people.
When you compare a rural town like Lyman to the state’s urban center of Seattle, different trends emerge about recession and recovery.
In June, Toby Paterson analyzed these trends as an economist with the state Employment Security Department and he found something that surprised him.
“Just the extreme nature of how much Seattle had recovered in comparison to smaller cities as an aggregate,” Patterson explained. “Basically Seattle recovered more than 80 percent of the jobs since recession and the smaller cities were just around 40 percent.”
If you picture a map with a bulls-eye on Seattle, the farther you get away from that center, the slower the recovery. It’s the same scenario with other urban hubs, like Portland, Ore., and Boise, Idaho.
The general explanation, Patterson said, is that big cities tend to offer a more diverse economy and more economic opportunity.
Recession’s Toll By Income Level
Across the country, the recession’s toll tends to match up with a person’s income. High earners held steady with nearly full employment, but as you drop down the income ladder, the jobless rate climbs higher.
For people who make less than $40,000 a year, the unemployment rate averaged around 16 percent last year. For comparison, that’s more than double the national unemployment rate, which is currently 7.3 percent.
You can see this different pace of recovery at a day care in the home of Ronda Stevens, or "Miss Ronda," as she is known to many families in West Seattle.
Unlike Rooks’ day care in Skagit County, Stevens describes most of her families as upper-income, with parents in white-collar jobs. They include IT professionals, doctors and an airline pilot.
In her backyard on a recent sunny afternoon, kids play chase on the lawn, climb in the wood fort and scoot around in toy cars.
Later, after both kids and parents hug Stevens goodbye for the day, she says this had been a stable business for her, for nearly two decades.
“I would have people call and get on my waiting list for sure,” Stevens said.
Then, the recession hit.
“I haven’t had that [waitlist] in years now, sadly,” she said. “I’m not even full for next month. I have quite a few openings.” A few years ago, Stevens even had to dip into her savings to make the mortgage payment.
In this case, it’s not that her day care parents were losing jobs or income. In fact, many families could afford to only have one parent work. But Stevens said that some of her stay-at-home moms became more cautious about money and opted to cut back on their day care hours.
“Instead of adding more kids during summer, they actually started taking their kids out because their other kids weren’t in school either,” Stevens recalled. “That’s how they were saving. So, that really impacted me.”
Stevens hasn’t been able restore her savings back to where it was before the recession, but she was able to save a little money this past year. However, she fears she might need to dip into it soon. Her income still fluctuates month to month, depending on the number of hours kids are enrolled in her program.
At age 50, Stevens admits her plan to rebuild her savings and put away more for retirement – it’s just not happening.
And this is the bottom line for people in the workforce like Rooks and Stevens, whose occupation falls toward the lower income range: Washington state economists forecast most job openings this decade will be in low-paid fields. They’re the type of jobs that pay in the ballpark of $25,000 a year or less, and the type of jobs that make it tough to ride out an economic setback or move ahead to a better situation.
This story is part of The Big Reset, KUOW’s series that explores how the Puget Sound Region has emerged from the Great Recession.
Determining Poverty Line