On-Site Care: Boon to Employers and Workers
Each weekday at 5:40 a.m., Carol and John Ludwig load a precious cargo into one of their three vans and set off for the hourlong trip from their home in Walnut to their jobs in downtown Los Angeles. Safely stowed in the van are Mary, 2, and Mikey, 9 months, who make the 35-mile commute with their parents.
The children are dropped off at a day-care center in City Hall South, and their parents go on to work at nearby Veterans Administration sites, where Carol is a pharmacist and John is a podiatrist.
“Commuting is not the best way to spend two hours a day with our kids,” said Carol, “but it’s very important that we have the time. We read books and we play games and we listen to tapes. There is something to be said for taking your kid to work with you.”
The City Hall South Child Development Center, an airy group of rooms and an outdoor play area for children ranging from age 3 months to 5 years, is a short jaunt from City Hall on Los Angeles Street.
It opened in January, 1989, a joint venture of the city and federal governments, and is able to serve up to 100 children of employees. Nursing mothers stop in at lunchtime, and parents are encouraged to visit whenever they want. Carol Ludwig visits her children twice a week during lunch. When they were teething, she was the one who soothed their pain by rubbing Tylenol on their gums.
Employer interest in child care is at its highest point since World War II. Many businesses give employees information on how to find care, schedule flexible hours or even offer programs in which pretax dollars are deducted for child care.
But only a handful of businesses offer the ultimate in child-care services: on-site centers. Out of the estimated 7,525 Los Angeles County businesses with 100 or more employees (2,001 employ more than 1,000), only 40 offer on-site care.
Employers take the plunge into on-site care for a combination of reasons. Mostly, however, they do it because it is beneficial to the bottom line.
“It is the greatest payback in terms of recruitment and retention of employees,” said Sandra Burud, president of Burud & Associates, a Pasadena child-care benefits consulting firm. “It is the No. 1 (child-care benefit) that employees want. Everything else is a distant second.”
One client of Burud’s, a bank, spent $430,000 on a center that opened in 1987. Less than two years later, the bank estimated that because of reduced employee turnover and absenteeism, it had more than earned back its investment.
L.A. County Child Care Coordinator Kathleen Malaske-Samu surveyed employers last summer and found that six kinds of employers generally sponsor centers: hospitals, banks, industry, entertainment, government and education. Hospitals, with 17 centers, and government, with nine, lead the way.
The county sponsors or co-sponsors five on-site centers that serve about 400 children, who are eligible to attend when they are 6 weeks old.
According to Laura Peterson, vice president of operations for Cornerstone-West, which operates the City Hall center and specializes in employer-sponsored day-care centers, employer interest has taken a dramatic leap in the past year.
“A year ago, I was talking to probably 30 companies in Southern California,” said Peterson. “Now I am talking to maybe 150 corporations, which are forming task forces and asking questions about child care.”
Besides the City Hall South center, Cornerstone runs a center for its corporate parent, National Medical Enterprises in Santa Monica, and 10 others, mainly in New England. Peterson is setting up on-site centers for six Los Angeles-area employers, including developers in Brea and Santa Monica, who are adding centers to business parks as a rental incentive.
An Expensive Plunge
It is expensive, scary and sometimes frustrating for employers to plunge into the day-care business.
The Los Angeles City Hall South Child Care Center cost the city and the federal government $940,000 in capital expenditures. The government entities continue to subsidize the center to the extent that they pay for maintenance and utilities and do not charge the center’s outside operator rent. Operating costs are paid for by parent fees, which range from $352 a month for preschoolers to $390 a month for children younger than 2.
When employers consider day-care centers, the first word they utter is usually liability . Liability insurance for an average-size center of about 60 children can range anywhere from $6,000 to $20,000 a year. Many employers who want to offer their workers on-site day care find it easier to turn to outside contractors, which carry the liability insurance, hire and train the employees, and run the center.
“The employer provides the space and the people to fill it,” said Peterson. “We do the rest.” But to attract parents to the center, Cornerstone-West also requires some kind of employer subsidy to make the fees about 25% lower than the market rate for comparable quality. The employer subsidy is usually in the form of free rent and/or upkeep of the center and utilities.
Often, it can take longer than anticipated to fill the spaces. Sometimes, employees will express great interest in an on-site center in principle, but will not be willing to uproot their children to bring them to work.
This was the case at the City Hall center. From initial employee response, the city was sure the center would operate at capacity right away, but it took months for the all the spaces to be filled.
Now, the waiting list for infant slots is about a year and a half. By then, unfortunately, a child is almost too old to qualify for an infant space.
“It’s a Catch-22,” said the center’s director, Rose Mary Jiles. “I have close to 175 applications for infants right now, and we only have 28 spaces. They are placed on my waiting list even before they are born. When a female employee gets pregnant, she comes over and fills out an application, (giving) her projected birth date and the projected time she will return to work.”
If parents fail to get spots for their infants, they often make other arrangements. Then, if a space later becomes available for the child, who may now be a preschooler, the parent won’t want to uproot the child from the care he already has.
Sometimes, parents need to transcend an emotional barrier in order to feel comfortable bringing their children to the workplace. They worry about uprooting their kids from homes and neighborhoods, keeping them occupied during rush hour commutes, and exposing them to the gritty underside of the city.
“This is a whole new concept, parents bringing their children closer to the job,” said Jiles. “Typically, there is also some concern about the downtown area. It is busy, there are a lot of transients.
“But we have never had a problem. We are very secure here. (The center is on the ground floor and people are buzzed in.) The thing a lot of parents have a hard time with is all the driving back and forth. The advantage, though, is that it reduces the time they are away from their children.”
The Right Thing to Do
The key to getting a day-care center off the ground is commitment at the top. At City Hall, the mayor and City Council were intent upon making Los Angeles a “model employer” in the child-care field.
At TRW’s center, which is to open in August at its Redondo Beach headquarters, it was the dedication of TRW President Ed Dunford and Human Resources Vice President Jeff Wilkens, said Betsy Bosak, the center’s program manager.
“They could have stopped it so many times,” said Bosak. “We have had many layoffs and cutbacks, yet they persisted with this project.”
Wilkens said the company decided to go ahead with the center for two reasons: It is the right thing to do, and it will help attract professionals in the middle of the decade, when a predicted shortage of engineers and scientists occurs.
“We think there is an obligation on the part of the employer to participate in the problems of family and child care,” said Wilkens. “While we may be going through a downturn now, at some point there will be a recovery and we want to make sure we are postured correctly. An on-site child-care center is really the right strategy.”
The TRW facility will accommodate 204 children. The company has brought in an outside contractor, Children’s Discovery Centers, to operate the center, but it will maintain the building. Parent fees will range from $125 a week for children under 1 to $95 a week for children 4 and older.
The parents of about 400 children applied, and the spots were recently awarded in a lottery. The firm hopes to compare the parents of children who won slots to those of children who didn’t to see if there is any correlation between corporate care and improved employee performance.
But as progressive as employer-sponsored day care seems, it is not exempt from the problems that plague the entire industry: high provider turnover, low wages and lack of benefits.
According to the 1989 National Child Care Staffing Study by the Child Care Employee Project, a private, nonprofit advocacy group in Oakland that works to improve the working conditions of care providers, the national staff turnover rate at day-care centers is 41% annually.
Almost all the literature about the meager wages earned by child-care workers includes comparisons with menial jobs: less than $15,000-a-year Caltrans leaf rakers, less than janitors, less than garbage collectors. In 1989, the Child Welfare League of America reported that the median salary for adults who care for children was $12,800, while the median pay was $14,872 for garbage collectors and $12,844 for janitors.
“In reality, the cost for child care overall is being borne by the workers,” said Karen Hill-Scott, director of Crystal Stairs Inc., a Los Angeles resource and referral agency. “The wage structure subsidizes the market price. For education and experience, they are among the lowest paid workers.”
TRW’s Bosak said the company was attracted to its provider, Children’s Discovery Centers, by, among other things, its wages and benefits package and low staff turnover rate. Care providers will earn between $8.50 and $9 an hour, and will have vacation time and a medical plan as well.
“If they are paying $8 or $9 an hour in this area, that is on the low end of the scale (in terms of earning a living wage),” said Carollee Howes, a UCLA education professor and child-care researcher. “I have studied corporate child care in other states where employers have have franchised it out too, and I find that they still err on the side of not hiring sufficiently well-paid staff because somewhere there has to be a profit.”
At the City Hall South center, entry-level staffers (with no college units and some experience), earn $5.65 an hour, said Jiles, who laughed when asked if child-care workers can earn a decent living.
“Are you kidding?” she said. “I’ve been in this field 16 years, and basic school district starting salaries are comparable to what I am making now.”
Handling Trouble
On Jan. 17, the parents of children at the City Hall South center found out that tragedy can strike anywhere and anyone: A baby girl had stopped breathing and later died at White Memorial Hospital. She was 3 months old and had been at the center only three days.
“It is hard to think about,” said Patsy Lane, the city’s child-care coordinator. “It is the horror of every parent. It appears that the staff did follow the standards that they have set for this kind of thing. There were people trained in CPR on the site. Once the paramedics came in, the staff’s immediate focus was on the other children and making everything normal.”
At the time, the center was still under the management of the first operator, which had already decided not to renew its contract to run the center.
The Community Care Licensing Division of the California Department of Social Services investigated the death and found no violations of state regulations. The center was adequately staffed at the time and paramedics were called promptly, said Ronald L. Tate, licensing program supervisor. He said the coroner’s report indicated the death was consistent with Sudden Infant Death Syndrome.
Carol Ludwig would rather stay at home with her children. But with school loans to repay and a big mortgage, she just can’t afford to, even though her day-care bill is $711 a month.
She’s fairly happy with the quality of care her children are receiving, but she believes lapses still occur. She noticed on her son’s chart recently that he did not receive food or drink for five hours one day, which upset her. And she wasn’t told until a day after it happened that another child had bitten her daughter’s finger.
“I go home angry and try to figure out what to do,” said Ludwig, who chats frequently with center director Jiles and Cornerstone’s Peterson.
“I do mostly feel that the center does a good job,” she said. “And I do feel safer having my kids in a day-care center than I would having them in someone else’s home. Unfortunately, there is no perfect day-care center, and if there was, no one would be able to afford it.”
The Series at a Glance
SUNDAY: Los Angeles is rated as a top city for child care, but is it really? There are critical shortages for children of certain ages. Quality is next to impossible to monitor. And, as working parents quickly discover, child care eats up a huge portion of the family budget.
MONDAY: What has America done for its children lately? Last year, Congress passed major legislation appropriating millions for child care--but some say it’s only a drop in the bucket.
TODAY: Many companies express an interest in helping employees with child care, but very few offer the ultimate: on-site centers. The city of Los Angeles and TRW are two employers who believe children and the workplace are not incompatible.
WEDNESDAY: Every day, thousands of Los Angeles children are dropped off at private homes for family day care. Only a small percentage of homes are licensed, and no one really knows what kind of care is delivered behind closed doors.
THURSDAY: Finding child care is a desperate search for many families. But some parents in Mount Washington have joined forces to create their own parent-run child-care center. It won’t be easy.
For more information on the series, call (213) 237-6569.
