Image: Child care
Charles Rex Arbogast  /  AP
Mildred Hayag, left, and her daughter-in-law, Mila, are seen in a classroom at the New Horizons Learning Center in Rockford, Ill., as the kids nap on Oct. 15, 2008. The nation's economic woes are making it tough for day care centers as layoffs and reduced hours have forced many parents to abandon day care so they can pay bills.
updated 11/9/2008 1:07:10 PM ET 2008-11-09T18:07:10

The nation's economic troubles play out one family at a time at the New Horizons Learning Center in this struggling city two hours northwest of Chicago.

Some parents have been laid off and must pull their children out of the day care center until they can find a job. Others' employment hours have been cut, so they reduce their kids' attendance to a few days a week.

Financial strains prompt one mother to pay with a postdated check. Another chooses to work in the middle of the night — after putting her kids to bed — because of the extra dollar per hour that shift brings. And the stress shows on the faces of the children who can't understand why their friends, without explanation, stop coming.

"They act out more, cry a lot more," said Diane Kesterton, director of New Horizons, where a 38-child enrollment has been halved to 19 in just three months. "They don't know what's happening, they're confused."

Parents nationwide are telling day care providers they must scale back or abandon their services. Instead, they keep kids at home with grandparents or upend their work-life balance because gas and food prices have become prohibitive and average child care costs outpace rent and mortgage payments — even for those drawing salaries.

"I was paying more in day care than I was making in work," Meredith Hartigan, a Rockford single mother of two, said in explaining her decision to pull her 4-year-old daughter out of day care in August and switch to working nights and weekends.

Hartigan said her $38,000 office-job salary couldn't cover her bills and $6,900 in annual day care costs.

To make matters worse, Hartigan's ex-husband's salary as a roofer is set to plummet as it does every winter — and she's increasingly concerned his business won't pick up next spring as it has in years past.

Food or child care?
Child care providers have similar fears as centers that have had waiting lists for as long as anyone can remember now find themselves scrambling for children. Many are for the first time offering part-time services or changing hours to accommodate the growing number of parents working off shifts, or struggling to make ends meet.

"It is not about people making choices to drive a second car," said Diane Stout, executive director of Circles of Learning, also in Rockford. "For many low income people it is making a choice for food."

Diana Ochoa, a 27-year-old who lives with her sons, 4 and 6, at her parents' house in Rockford, said — even after a sharp decline in gasoline prices — she can only afford to fill her tank enough to bring her youngest boy, Kenneth, to New Horizons three days a week.

Major Market Indices

And when she can't afford child care, Ochoa stays awake through the day to care for her youngest son at least until her parents come home from work.

It's not just low-wage earners feeling the pinch. Day care costs average between $3,380 to $10,787 a year for just one preschooler, according to the National Association of Child Care Resource & Referral Agencies.

Even before this year's economic perils, the cost had climbed 5.2 percent between 2006 and 2007, said Linda Smith, the association's executive director. And in every state in the country, the monthly child care bill for two children is higher than median rent payments and as high or higher than a mortgage.

While 2005 U.S. Census Bureau data, the most recent available, indicated 2.65 million preschoolers attended day care, Smith's association says current national enrollment — or unenrollment — figures are not available.

Declining enrollment
But there are distressing signals.

In June, well before Wall Street's tumultuous fall, research firm IBISWorld Inc. predicted day care revenues would climb by just 1 percent in 2008 — just more than a third as much as in each of the previous two years.

In San Gabriel, Calif., Total Child Center owner Doreen Sonnadara said although no children dropped out, her enrollment fell from 51 at the beginning of last school year to 15 at the start of this one because younger children have all but stopped taking their older siblings' spots.

In the Rockford area, where manufacturing jobs have disappeared by the thousands in recent years and the unemployment rate jumped to 8.8 percent in September, day care providers are worried next year could be even bleaker.

"Even in the last couple weeks it feels like (economic troubles) are moving up in the next income level," said Toni Brown, who owns Stepping Stones Child's Center in nearby Roscoe. "First, the people living day-to-day who were immediately hit. Now it's hitting people who thought they were safe for a while."

General Motors Corp. this month announced plans to shut down its plant just across the state line in Janesville, Wis., putting 1,200 people out of work — and Brown is bracing for the repercussions.

"We have one family, the mom is a GM employee, and they have two children with us," she said.

"We just had two (children) in the last week, we were told they are now staying home with grandma until 'things get better,'" she added. "It's not getting better."

Desperate situations
When not having child care isn't an option, some fear financially strapped parents will put their kids in facilities or homes that are little more than waiting rooms.

"We are driving people into an unregulated system," said Peggy Liuzzi, executive director of Child Care Solutions, a resource and referral agency in Syracuse, N.Y.

Smith agreed, saying she expects even people who now qualify for aid from the state to not even bother applying.

"If you know there are 207,000 people on the waiting list in California, you probably aren't even going to get on the waiting list," she said. "Why fill out all the paperwork?"

And that means more children could be put in possibly dangerous situations as parents turn to cheaper, unlicensed care.

An example, said Liuzzi, was the woman in New York who, unable to find anyone to care for her 4-year-old daughter while she went to work in a shoe store, simply left the girl outside in a car with a sandwich and water, checking on her every hour.

The woman's decision, which came to light when someone spotted the child and called authorities, underscores the desperate situations facing a growing number of parents.

"People need to work," Liuzzi said. "They can't let their jobs go and they will make choices they will regret."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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