When family child-care provider Joan Laurion began using a sliding scale to set family fees, "it was more symbolic than anything." Laurion saw a two-tiered child-care system developing around her. If parents could afford to pay for quality care, their children were apt to get quality care. Children whose parents couldn't afford as much often had to settle for something less. Laurion, who lives and works in Madison, Wisconsin, could have built a business caring for children of higher-income people like professors and state employees. She decided instead to try to attract a cross-section of the community using a sliding scale.
Windflower Enterprises, a national training, consulting, and advocacy group for family child-care providers, supports the use of sliding scales. They say that "providers are subsidizing all parents by charging less than the full cost of care. Caregivers," they say, "subsidize child care in this country because current rates do not cover the true or full cost of quality."
Low-income parents struggle to pay the current costs of child care, but upper-income parents could pay a lot more than they do. Families with incomes of $18,000 or less spend 22 percent of their income on child care, while families making $54,000 or more spend only 5 percent of their income (U.S. Bureau of the Census, 1994).
"If you have some upper-income parents," Windflower says, "you can use . . . a sliding scale to move gradually toward charging them the true cost of care. These graduated fees allow providers to earn more income while keeping their rates affordable for all. They also help providers include a mix of families from different income levels." "It is important," say members of Windflower, "that parents . . . understand that your top cost is only the true cost of care for each child. You, not they, are subsidizing the families who pay less."
Each year on Worthy Wage Day, Joan Laurion announces her rates for the coming year. She lets parents know how she set the rates. First, she considers Madison's inflation rate. She then looks at the salaries of Madison teachers to decide where she is headed. Laurion believes providers should be paid at a rate similar to public-school teachers if their experience and training are similar. She also factors in city reimbursement rates for low-income families.
There are four levels on Laurion's current scale: 0-$30,000; $30-50,000; $50-100,000; and over $100,000. Last year, she changed the scale to include more families in level 2. Increases for each level were not equal to reflect the reality of people's spending power. In The Language of Money, Kathy Modigliani gives an example of a sliding scale.
She says that you should consider the cost of living in your area when setting up your scale. The bottom of the scale, she says, will be limited by the number of low-income families in your home. You won't be able to offer as much if you have many low-income families. The top figure will be limited by "what the market will bear." You may be surprised, she says, at what a few parents will pay if you offer quality. Still, she cautions against raising your fees sharply all at once. Instead, she says, you should raise your rates 10 percent a year until you're where you think you should be. Obviously, she notes, sliding scales won't work in homes that serve only low-income families. Laurion realizes that she will have to decide how many lower-income families she can afford to take. "Three families in level 1 would really affect my income," she said. "I've had people tell me that it's going to get to the point where I'll have to say, ‘I have two level 1 slots.' That's probably true."
Vic McMurray, another Madison family day-care provider, also uses sliding scales. "I use the average rate of a person with my experience as top dollar. Then I work my way down with three more spots on the scale." The last spot on her scale is exchange of services. "If I were going to introduce a sliding scale to a group of parents, I would use two brackets," she said. "One would be higher and one lower than what I usually charge. If people agree to the higher rate, they wouldn't have to share their income. Otherwise, they sign a form giving me permission to check with the IRS.
If people choose the lower rate, I expect them to make up the difference with 2 to 2-1/2 hours of routine tasks per week." Both Laurion and McMurray give parents the option of helping out to reduce the amount they pay. McMurray calls her business a "parent cooperative." She says that, for her, helping out is more than just a financial arrangement. "I really believe parents need to take more ownership of the child care they're receiving," McMurray said. "When you just drop the kids off and pick them up at the end of the day, it's almost like going through the McDonald's drive-up. When parents are involved, I feel more supported and the quality of child care is better."
McMurray has attracted a lot of parents who are "selectively underemployed." These parents could put a lot more emphasis on their careers right now. Instead, they've chosen to work less to enhance the quality of their family life. "These people have a lower income, but they have a lot of resources," McMurray said. "I expect them to provide service at a higher rate. They can do field trips and other activities because they're available for that." >p> Parents may also help by cleaning up at the end of the day. Some parents have even worked on the addition the McMurrays are building. One favorite way for parents to help is to bring in one meal a week and wash the dishes afterward.
McMurray, like all providers on the USDA food program, receives money every month to reimburse her for what she spends on food. She gives the parents the amount of money she would have spent on a meal and lets them go shopping. "They know what they have to shop for," McMurray said. "I have to fill out forms telling what foods I offered each day, so I'm on top of what they're doing. I go a bit further than what the government says anyway. I keep meat and dairy products separate and provide a meat alternate if children prefer not to eat meat."
Another way for parents to help is to provide respite. Respite means that a parent or helper comes in and takes over so the provider can get away for a time. McMurray says that respite is important because family child-care providers work very long hours. She works 60 hours a week, but she is hoping to get that down to 40 hours. "If I have to take my child to the doctor or have something else I have to do during the day," she says, "respite gives me the chance to do that."
In McMurray's home, a second adult is almost always present from 9 to 2. "All my emergency care cards, for example, say V. McMurray or substitute caregiver," she says. As the licensed provider, McMurray is responsible for her substitutes. Her subs are all familiar with her policies, and McMurray knows the people who work with her. She is sensitive to the way they interact with the children and to any problems they may have. (Check the licensing requirements in your state to be sure the duties assigned to a parent comply with state standards.)
Laurion believes more providers would remain in the business if they could use respite. That way, they could help out in their children's classrooms or do other things they'd like to do. In Madison, where licensed caregivers can belong to a support system called Satellite, providers get seven free hours of respite per quarter. Laurion uses hers to work on a master's degree. Every Thursday afternoon, the same substitute caregiver comes to Laurion's home while she attends college.
What do parents say when providers decide to try some of these techniques? Modigliani says your success will depend on how well you explain what you are doing and why. Parents, she says, are usually surprised when they learn how little their provider actually makes. Often, she says, when parents hear the details, they are the first to suggest that fees be raised, but, she says, most parents do not want to pay for other parents. Make sure upper-income parents know that they are not paying for lower-income parents. Stress that they are only paying the true cost of care.
"We must help parents see that good child care is a good family investment," Modigliani says. "We must help clients understand . . . the hidden costs of keeping fees low. Higher fees will buy better care. [They will also buy] happy providers who are likely to keep taking care of children, rather than quitting because they can no longer survive or because something better came along."
REFERENCES
Casper, L.M., Hawkins, M., and O'Connell, M. 1994. Who's Minding the Kids: Child Care Arrangements. Fall 1991. Washington, D.C.: U.S. Bureau of the Census.
Windflower Enterprises. 1993. The Language of Money and Family Child Care. Colorado Springs, CO: Windflower Enterprises, Inc.
Reprinted with permission from "Scholarships and Sliding Scale Fees" by Kathy Modigliani in The Language of Money and Family Child Care. Published by Windflower Enterprises, Colorado Springs, Colorado.