L.A. County Child-Care Industry Found in Dire Need of Investment

Licensed child care in Los Angeles County is a $1.38-billion industry that generates more than 64,000 jobs, but is plagued by low wages, high turnover and an inability to locate financing for facilities construction and expansion, according to a new study.

The report--to be released next month by the Oakland-based National Economic Development & Law Center--aims to draw attention to child care as a growing and viable industry in dire need of public and private investment.

Welfare-to-work efforts, a largely underserved Latino population disproportionately living in poverty, and the high cost and low availability of child-care space pose particular challenges for the industry in Los Angeles County, the report said.

Results of the study were previewed Friday in a briefing for local, state and federal policymakers sponsored by the Los Angeles County Child Care Advisory Board. The county, which helped fund the study, is working with the Oakland group on its statewide initiative to improve the child-care industry through public and private partnerships. Los Angeles was the last of nine California counties to be analyzed.

According to the report, the child-care industry in 1998 created 34,700 direct jobs and nearly 30,000 indirect jobs such as accountants employed by child-care providers. The direct employment is comparable to that in the air transportation industry, according to the group. Licensed child-care employment in Los Angeles County grew 49% between 1988 and 1997--almost 25 times faster than overall civilian employment, the study said.

The numbers are a wake-up call that the industry must be taken seriously by public and private funders, said Julie Sinai of the Oakland group. The industry also is the keystone that allows many in the work force to remain employed in other industries, she said.

“It is a growth industry. It is a job generator,” Sinai said. “By not infusing resources, you’re weakening the highway. You’re creating tremors and the infrastructure is going to fail you. If the highways fail, people can’t get to work.”

Conventional lenders have shied away from child-care providers because of the industry’s high costs and low wages. Child care has also fallen below the radar of many public policymakers. For example, only three out of 88 cities listed child care as a priority for their federal block-grant money--one of the only sources of public funding that can be used for construction or expansion of such facilities, said county child-care coordinator Kathleen Malaske-Samu, who is spearheading the county’s participation in the Oakland project.

“If these kinds of dollars are going through the system, and the need is only increasing, then that reduces some of the risk because the industry is here to stay,” she said.

The report also highlighted special challenges faced by the industry in Los Angeles County. The county’s growing service and retail sectors, for example, contribute to a greater demand for child care outside the conventional 8 a.m. to 6 p.m. schedule.

The growing Latino community--already underserved by child care--is rapidly growing. And a shortage of industrial space, combined with dropping vacancy rates in residential, commercial and office properties, make it difficult to develop new facilities or expand existing ones.

The figures highlighted by the report should help bring legitimacy to the industry, said Jack Kyser, chief economist of the Economic Development Corp. of Los Angeles County. But leaders nevertheless will have to focus on unconventional ways to stimulate growth, such as offering developers incentives to build child-care facilities, he said.

“When you say child care, most people would curl their lip. But given the way we are growing and our demographic profile, it should be a viable business,” he said.