State officials approve $100M in child care aid

Funding aims to alleviate industry labor shortage, expand access

Daniel J. Munoz//July 6, 2021

State officials approve $100M in child care aid

Funding aims to alleviate industry labor shortage, expand access

Daniel J. Munoz//July 6, 2021

New Jersey is setting aside $100 million for the state’s child care industry, a move that business advocates say will help revitalize the workforce.

Under Senate Bill 3990, which Gov. Phil Murphy approved on July 1 before the Fourth of July weekend, the state would offer federal dollars for grants that child care businesses could use to improve their brick and mortar facilities, and money for workforce development and technical assistance.

The state would also use the funds to study the current state of the industry in New Jersey.

“Without access to child care, many New Jerseyans are unable to work to provide for themselves and their families,” the governor said in a July 2 statement.

Under the law, the Department of Community Affairs would get the full $100 million and dole out $15.5 million of it to the Department of Children and Families to create “workforce development supports” and conduct the landscape study.

The Department of Human Services would get $30 million, which would go to child care centers to hire and retain employees. The New Jersey Economic Development Authority would get $54.5 million for grants to help centers improve their facilities and for administrative and organizational support.

Hundreds of child care facilities were forced to close during the onset of pandemic, with the exception of centers that looked after children of essential workers and first responders.

“This law is important to the entire business community, not just the child care industry, because, without access to safe child care, parents cannot return to work,” reads a statement from Chrissy Buteas, who heads government affairs for the New Jersey Business & Industry Association.

That lack of access to child care, the governor argues, has played a major role in the worker shortage affecting the retail, restaurant and hospitality industries. Some of those industries play a key role in the multibillion-dollar summer tourism industry, which is struggling to rebound from the COVID-19 pandemic.

“New Jersey families will face financial difficulties and our economic recovery will falter if we cannot provide a sufficient network of high-quality, affordable licensed child-care providers throughout our state,” reads a July 2 statement from the Assembly Democratic sponsors.

Other efforts are being employed to combat the labor shortage, including a newly signed law that allows anyone 16 and 17 years of age to work up to 50 hours a week, up from 40 hours a week, through Sept. 6, 2021. And a variety of state subsidies, publicly-funded back-to-work bonuses, and tax credits have been considered in order to help businesses cover the increased costs of hiring back more workers.

Businesses claim the added $300 in federal unemployment weekly benefits has, in turn, disincentivized people to return to work and fueled a disappointing April jobs report, which saw 266,000 jobs added rather than the projected 1 million. Job rebounds sped up in May, according to federal data. States like North Dakota, Montana and South Carolina are dropping the benefits, but Murphy says there are no similar plans in New Jersey.

Labor rights organizations contend that the combination of low pay, poor working conditions and lack of health and safety precautions are driving a shortage in applicants.