Low wages for New Hampshire child care workers driving recruitment, retention challenges

NHFPI logoRecruitment and retention of New Hampshire’s child care workforce is an ongoing challenge for Granite State child care providers. A key factor contributing to this challenge is low wages.

The U.S. Bureau of Labor Statistics reported the 2023 median wage for a New Hampshire child care worker was $15.62 an hour. This wage falls between the median income of fast-food workers ($14.01 per hour) and retail salespersons ($16.71 per hour), and is slightly less than half the median salary for New Hampshire’s kindergarten teachers. These low wages may contribute to high turnover among early childhood educators, which New Hampshire Employment Security projects may be as high as 17 percent annually from the second quarters of 2023 to 2025.

High turnover rates may be impacting New Hampshire’s limited child care supply. Between 2018 and 2022, New Hampshire had an average annual shortage of about 8,400 child care slots. However, the shortage may be more critical than this figure suggests, as many providers are not operating at their full licensed capacity due to staffing challenges. As of spring 2023, New Hampshire’s Department of Health and Human Services reported a 26 percent vacancy among early childhood educators. Without adequate staffing, child care providers have been forced to close classrooms, further limiting available slots.

In addition, providers may have decreased child-to-teacher ratios to best meet children’s needs due to mental, behavioral, or developmental disorders and delays, which the U.S. Centers for Disease Control and Prevention estimate may affect as many as 1 in 6 children between ages 2 and 8. Reducing class sizes can help ensure children receive the care and education that meets their needs, and help reduce teacher burnout, which is a strong contributor to teacher turnover. Reducing ratios, however, further increases the cost of care for each child in a classroom and limits available child care slots.

Currently, providers receive an additional $100 per week for children receiving full-time care with significant special needs (as verified by a licensed professional that is not the child care provider), but only for children receiving New Hampshire Child Care Scholarships, a federal-state funding partnership that helps ensure families with low and moderate incomes can access high-quality child care.

The stipend equates to approximately six hours of additional staffing each week using the 2023 median child care worker wage and does not include any other costs related to employment, supplies, or other needs. If a classroom has multiple children with higher needs, especially if some of those children are not receiving child care scholarships with the additional stipend, the extra hours of staffing will likely be inadequate to provide high-quality care.

There have been several temporary policy initiatives implemented to address early childhood educator workforce challenges. The current New Hampshire state budget made a one-time $15 million allocation intended to help recruit and retain early childhood educators. In the coming weeks, the funds will be disseminated to child care providers who can use the grants for a variety of purposes, including wage increases, sign-on incentives, and paid time off.

Additionally, the remaining $29 million in one-time American Rescue Plan Act discretionary funds are being used by contracted organizations for a variety of projects intended to bolster the long-term stability of the early child care sector. Example projects include business health assessments for providers, employer and business engagement roundtables, and pilot wellness programs for early childhood educators. Funds for these initiatives must be spent by the end of September 2024 or they will be returned to the federal government.

Even with one-time pandemic-related investments, the future of New Hampshire’s child care industry is uncertain. The industry was fragile for years prior to the COVID-19 pandemic. Providers have relied on the approximately $161 million in one-time state and federal pandemic-related funding to help pay their operating expenses and remain open for Granite State families.

Access to high-quality early care and education for families is vital for the Granite State workforce and economy. Without child care, parents cannot work. According to U.S. Census Bureau survey data collected between March 2023 and March 2024, an average of nearly 15,500 New Hampshire residents were not employed each month because they were caring for a child not in school or in a child care setting.

A 2021 report from the Bipartisan Policy Center estimated households, businesses, and governments experienced collective financial losses in wages, productivity, and tax revenues ranging between $44,100 and $66,816 ($48,611 to $73,634 in 2023 dollars) per unavailable child care slot in New Hampshire.

While one-time COVID-19 pandemic-related funds helped stabilized the early care and education industry for the past four years, additional investment from federal and state governments, employers and businesses, and private donors will likely be needed to help ensure parents have access to child care for generations to come.

Nicole Heller, Ph.D, is a senior policy analyst at the New Hampshire Fiscal Policy Institute, a nonprofit, independent policy research organization based in Concord and focused on the state budget, New Hampshire’s economy, and policies affecting Granite Staters, particularly those with low and moderate incomes. Learn more at nhfpi.org.