Market Babies

by Tracie McMillan

In a post-welfare world, New York spends more on child care than ever before. We’ve bought a new legion of home-based entrepreneurs–and a shaky start for kids and workers alike.

Kwame Boame is only 6 years old, but he’s already got a helluva commute. Every Monday morning, Kwame’s mother, Kimberly Paul, rustles him out the door at 6:30 to take the A train from their apartment in the Dyckman Houses, at the northern tip of Manhattan, to the island’s southern border. In the Broadway-Nassau station, next to the magazine stand on the A platform, they meet Kwame’s great-grandmother, who shepherds Kwame onto the train to Bedford-Stuyvesant, where he goes to school. For the next five days, he’ll stay with his grandmother and great-grandmother. Kwame won’t see his mother again until Friday.

Kwame’s weekly commute and bi-borough living are Paul’s response to a common conundrum: a low-income parent’s need to find affordable, quality child care. Almost since the city began building its publicly funded day care for low-income families through its Agency for Child Development (ACD) in the 1970s, waiting lists have numbered from thousands to tens of thousands.

Then came welfare reform. The move of thousands of parents into the workplace was accompanied by a massive surge in the number of those who turned to the city to help them pay for child care. The city welfare agency, the Human Resources Administration (HRA), set up a second child care system exclusively serving families on welfare or recently off it. By August 2002, more than 40,000 children received child care paid for by HRA, up from 14,000 in 1998.

Kwame used to be one of them. When he was 4, Paul was trying to get off welfare by taking a paralegal course. HRA paid for Kwame’s child care while his mother took the class, as well as for the first year after she left public assistance, through a voucher she gave to his caretaker. Once she’d finished “transitioning” off of welfare, Paul’s child care was taken over by ACD. Again, she got a voucher–a coupon for child care that she could give to any kind of provider she could find.

But even with the $200 a month for child care–Paul is now responsible for an equivalent amount herself–she still couldn’t find a way to make it work. Her job at a law office regularly requires her to work late, and that calls for extra cash for child care that she just doesn’t have. “It’s very hard to be mommy over the phone,” she says, “but if I had someone [caring for Kwame] up here, we wouldn’t be able to eat because I’d have to pay the overtime.”

Paul is lucky, relatively speaking. Her mother, Sandra Robinson, isn’t just a grandmother to Kwame–she takes care of young children for a living, watching six young kids in her home every day. Though it’s a tight fit, the situation works. Paul can keep her job and stay off welfare. Kwame has stable adult supervision. And Robinson gets paid for caring for Kwame, which in turn helps her cover the housing costs for herself and her aging mother.

The after-school hours at Robinson’s house are busy, to put it diplomatically. Four wee ones, ages 2 to 4 years, toddle through the kitchen and living room, scrambling to play with cardboard tubes and grabbing at the Sesame Street guitar the older children are playing with. Milk mustaches have to be wiped after snack time, 2-year-old Diarrah stopped from wearing Robinson’s eyeglasses out of the house, and all of them lightly admonished for singing Eminem lyrics. When it’s time to go to the park, Robinson instructs Kwame and Ashad, who’s 8, to form a human barricade against the onslaught of toddlers trying to tumble out the door.

For her part, Robinson would recommend the job–with a few caveats. “Day care is very viable,” she says, “but you’ve got to love kids because they will drive you crazy.” As a former worker in youth nonprofits and social services, she’s still a bit astonished by her terms of employment. “So yes, for this full day, ACD pays me $1.88 an hour for the older ones, $2.30 for the younger. Is it amazing or what?” Robinson chuckles and shakes her head with a touch of incredulity. Last year, she grossed about $16,000. “It’s just unbelievable.”

In the field of child care, where the median wage nationwide is $7.43 an hour–barely more than that of a parking lot attendant–Robinson is getting by OK. But she still finds it a struggle to make her home a good place to take care of kids. “I’d be so happy just to have a backyard,” she says. “It took me six months just to pay for the fence.”


Robinson’s high-energy apartment-based business is part of a booming cottage industry. There are about 8,500 registered “family day care” providers like Robinson in the city, up from 3,400 in 1993, according to Department of Health records; private research suggests that about half of them are actually caring for kids. About 13,000 children are currently in city-subsidized family day care. These chaotic microbusinesses are government’s best answer, for now, to the urgent challenge of finding child care for the tens of thousands of women on or leaving welfare.

“There has been a huge increase, a huge increase” in family day care, says Nancy Kolben, executive director of Child Care Inc., a citywide resource and referral nonprofit. Kolben attributes the boom, in part, to a rapid increase in the number of child care vouchers issued by the city’s welfare and child care agencies. Those vouchers brought in a wide new stream of cash for child care businesses, easily accessed by anyone with basic training in the field.

Today, family child care has been the fastest-growing kind of regulated care the city pays for, increasing by roughly 38 percent between 1998 and 2002. Care in formal child care centers increased by just 7 percent.

A lot is riding on the ability of family day care providers to make it work in the long haul. Though New York City only subsidizes child care for low-income families, it’s still straining to meet the need. In 2000, there were an estimated 570,000 children living under the federal poverty line in New York City. The city’s public child care system cared for a little under 100,000 of them–barely even one-sixth of poor kids. Today, of those who are covered, about one-third are in “informal” care–yes, public money pays their babysitters, who are virtually unregulated. Among children whose care is paid for by the city’s welfare agency, three in four are in informal arrangements.

The dire need for child care isn’t unique to New York. Before Congress adjourned for elections, one debate surrounding reauthorization of welfare reform hinged not on whether or not to increase child care spending, but if the increase should be $1 billion or $5 billion.

New Yorkers will benefit from those additional dollars–but only if the money goes into increasing access to government-regulated care. That won’t happen automatically. Virtually all of the expansion of child care following the welfare reform of 1996 has come in the form of vouchers. The city’s welfare agency covers its child care needs exclusively through vouchers, and vouchers accounted for nearly one in three of ACD’s children last year. In the early 1990s, only a couple thousand vouchers went out for child care annually, mostly used to tide parents over until a slot opened up at–or was added to–a day care center working under contract with the city. By 2002, more than 59,000 vouchers were issued to families, representing 60 percent of all city-subsidized child care.

Amid the flood of vouchers, toy-filled child care centers, with two dozen toddlers and a cluster of young, smiling teachers, haven’t materialized. There’s no central agency responsible for constructing child care facilities, and so far public dollars have not gotten much built.

Which is where people like Sandra Robinson come in. Because it doesn’t require the construction of new facilities, family day care circumvents the most formidable obstacles to expansion. Because it relies on an infinitely expandable pool of providers without increasing permanent capacity, family day care is extremely hospitable to a market-driven, voucher-based system. Because it does require training, licensing and registration, family day care addresses concerns from parents and policymakers alike about quality of services that arise with the use of informal caregivers. And because it draws on women’s child-rearing experience, some politicians and foundation officers are wagering that family day care could have an added bonus: providing employment for women leaving welfare.

But child care is a high-stress, low-wage vocation, and transforming welfare mothers into reliable, well-trained child care workers has proven a difficult proposition. Doing it well, it turns out, takes massive investment of additional dollars. In New York City, one program spends $4 million a year simply to pay salaries and provide supports to 125 former welfare recipients working as child care providers in their own homes.

The emerging business of family day care is exactly what the creators of New York’s voucher system dreamed of: a private, demand-driven marketplace for child care services. For that achievement alone, it’s not a failure. But unless the public and private sectors both take on the monumental task of making it viable–as a job, and as a dependable service for its customers–homegrown child care will never succeed in keeping low-income parents at work.


It’s just after noon, and MilagrOS Espinal is crouched at a table that barely meets her knees. She’s sharing her table with five small kids chasing peas and carrots around plastic plates, underneath a wall covered in finger paintings. The room is not large, but in addition to the lunch table it holds two more tables, an additional eight minuscule chairs, one lounge chair, three large shelf units crammed with books and toys, a television and VCR, a crib, a side table, and a few large toys neatly tucked against the wall. As the kids finish their lunch, Espinal is fluttering between spoon-feeding 1-year-old Jalani, keeping the five kids quiet at the table, and making sure that 2-year-old Patrick continues his asthma treatment, a steaming nebulizer securely over his nose and mouth. Meanwhile, her husband, Luis, off for the day from his job in the Saks stockroom, drags naptime cots into the room.

The room where Espinal cares for the kids used to be her living room. Now it’s a full-on, home-styled version of a child care center. She and Luis, their three children, and their black Labrador retriever all pretty much live in the apartment’s two bedrooms and modest kitchen. Her bedroom has a computer desk and filing cabinet shoved in next to the bed and dresser.

The business is in operation six days a week, from about 7 a.m. to 6 p.m. on weekdays, 8 to 6 on Saturdays–a full 65 hours of work. For her efforts, Espinal brings in about $4,000 in subsidies and private cash a month. After expenses and taxes, she nets about $2,000, or a little less than $8 an hour.

Espinal is doing pretty well. Still, the work can be thankless. Even some of her own clients think that child care is just something that women do. “Some parents think that you are not professional, that it’s not a job,” says Espinal exasperatedly. “You enjoy the kids, but it’s a job.”

With such massive demand, though, child care retains a significant appeal as a business enterprise. “The need never ends,” explains Nancy Biberman, executive director of WHEDCO, which runs a day care training and referral network for day care providers in the Bronx. “And frankly, the potential for generating new home-based child care is pretty endless.”

Biberman’s sales pitch jibes with Espinal’s experience. “I’ve gotten so many calls and I have to send them to a friend, and the friend sends them to someone else because she doesn’t have any room,” says Espinal, who’s had her own child care battles. A mother at 16, Espinal dropped out of college because she couldn’t find child care, and she spent four years on and off of welfare. When she finally decided, after working as a child care home monitor, to open her own day care business, the fact that she’d be able to be home when her kids came home from school was a selling point, too. “That was my major reason,” she explains. “They weren’t doing good in school. Ever since I’ve been back at home, they’ve been doing great in school.”

Now in her sixth year as a child care provider–she upgraded her skills through WHEDCO’s training program two years ago–Espinal has expanded up to a group family child care home, licensing her to watch over as many as 12 children. Rotating some through in shifts means she cares for 13 daily. The volume of kids means she makes enough money to employ an assistant; she ended up hiring one of her charges’ parents, a woman who was sick of working in a factory. Now the assistant is taking child care and ESL classes in addition to working for Espinal–she wants to open her own child care place.

Still, the price of success in the child care business is steep: It is a life-consuming enterprise. In a city famous for the tiny dimensions of its apartments, providers effectively give up their living room and kitchen for the job. Sandra Robinson, for example, lives in the front room of her three-room flat with her mother and Kwame. “When the Department of Health comes in, you have to get rid of everything. If you have a couch, that’s it,” she chortles matter-of-factly. “You’re not going to have a couch anymore.”

The hours for family day care providers are long, generally at least 8 a.m. to 6 p.m.; if parents are late, work hours stretch even longer. Most providers don’t have health insurance–those that do pay for it themselves–and there are no sick days or holidays. If a provider gets too ill to work, she has to close up shop until she can work again, and she won’t get paid until she does. And, of course, her clients have to scramble to find care for their children that day.

On top of the long days come many unpaid hours spent shuffling paperwork in order to get paid. There are medical release forms, medical history forms. There are payment forms for ACD. There are payment forms for HRA. There are daily menus to compile, right down to the last peanut butter cracker, to get money for food from a federal program. There are constantly new regulations to keep up with and implement. In formal day care centers, this is work done by administrative staff, not caretakers.

“The food menus is what takes up most of your time,” confides Robinson. “The only time I have for paperwork is late evening. When they’re sleeping, you want to rest a minute.”

Robinson gets up every morning at 6, readying the place for the onslaught of toddlers that begins just before 8 a.m., and won’t be completely over until 7 p.m., when it’s just her, Kwame, and her mother. On weekdays, Espinal also rises at 6 a.m., with kids arriving at 7:30 or 8 and leaving at 6. Saturdays are shorter–she’s open from 8 to 5. By the time she’s closed up shop, fed and spent time with her family, and done the day’s paperwork, it’s often 1 in the morning before she can even think about going to sleep.


“It started with welfare reform,” says Anania Almonte. “Some of the women couldn’t go to work because they didn’t have child care, and some women were licensed [day care providers] but didn’t have children.”

Almonte is the coordinator for Providers United, a network of home-based child care workers in the Bronx. The group traces its roots to 1998, when tenant organizers working in the northwest Bronx for University Neighborhood Housing Program began hearing some residents complain about being stuck on welfare because they couldn’t find child care. Meanwhile others griped that, as licensed day care providers, they couldn’t find customers.

Providers United’s first meeting drew 80 women who were registered family day care providers; about 35 stuck around to build and support the new group. Today, the network boasts 61 members, 32 of which have been there since its founding. The network helps with advertising and recruitment of clients, boasts a lending library of toys and books for its members, helps providers obtain small grants, keeps up to date on regulations, offers financial literacy assistance, and offers a way for providers to gather, to swap handy hints, and connect for referrals.

Just as important, the network helps ensure that workers have a decent income. Some caregivers have a reliable cash flow because they subcontract work from a nonprofit agency that itself holds a contract with ACD to provide child care services. Robinson has four of those via her network, the Child Development Support Corporation. Before she began taking ACD children last February, Robinson was responsible for keeping her roster full–and found that she only had a couple of kids coming to her on a regular basis. “After that, it was not a problem,” says Robinson. “I had a full complement of kids.” If she can get the paperwork arranged properly, Robinson will care for six children all day, and two more after school, doubling her gross income to $32,000 a year. Before vouchers, ACD paid for all family child care through such contractual arrangements.

Caregivers who rely on vouchers and on parents who pay cash, on the other hand, have no way of knowing how many clients they’ll have at any given time. Virtually all independent providers who make the job work have come to rely on networks like Providers United, which help with outreach and paperwork to steer kids their way. Still, there are no guarantees that providers will find enough kids to get by. Says Almonte, “We can give them training, we can give them resources, we can give them information, but we cannot pay them for the child care services they are providing.”

Family child care networks have been around since the city started subsidizing care, but the recent boom in child care vouchers has spurred a proliferation of new organizations that support freelance providers. Cynthia Rowe, assistant director of Child Care Inc., says there are now about 55 networks that have city contracts, and another 35 that are highly organized and fairly formal. Rowe says grassroots networks have also grown in number.

Independent networks have to shoulder the cost of these supports with their own private fundraising. Several philanthropies, including the Surdna and Enterprise foundations, are making an effort to help family child care providers do their jobs well.

Surdna spends about $1.1 million a year supporting family child care networks across the country. Program officer Carey Shea says the foundation decided to target its grants to the networks because it saw an urgently needed public service that simply didn’t have the resources to remain viable. “We are interested in seeing the family child care infrastructure grow,” explains Shea. “Ultimately, strengthening the infrastructure is going to strengthen the industry. We would like to see the family child care industry have more political power.”

With that power could come an ability for family child care, as an established interest, to secure more adequate public funding. Shea knows the odds are long. “I would like to see a lot more government support for the care of young children,” adds Shea, “but in these tough budgetary times, it’s not going to be a lot, whatever they do.”

That’s not to say that government hasn’t recognized Shea’s work with Citizens Advice Bureau, Forest Hills Community House and other community groups: Their networks are among six that will soon be awarded ACD child care contracts for the first time, providing their workers with a more stable living and bringing new and committed organizations, with close ties to their neighborhoods, into the mix of child care providers. The contracts are part of a long-awaited addition of more than 3,100 day care slots.

But as long as the city relies largely on vouchers, not contracts, providers and their networks will have to scramble to keep their rosters full and enough dollars coming in. Foundations may fill the gap for now between government spending and the true cost of providing child care, but their commitments won’t last forever. The voucher revolution, says Rowe, has fueled a new industry without building an enduring infrastructure. “There’s been a tremendous growth in providers,” she says. “But not a growth in resources.”


Most family day care networks take the industry as it is and attempt to make the best out of a marginal job. But one local organization has been more ambitious about trying to turn home-based child care into a viable business. In 1997, the Consortium for Worker Education, a union-funded group that is a heavy hitter in job training for low-wage workers, set forth a plan to employ former welfare recipients as family child care providers–in real jobs, with tolerable conditions.

Under its Satellite Child Care Program, providers have a guaranteed annual income of $18,200, plus health benefits and overtime. They are members of DC 1707, the city’s child care workers union. They undergo 20 weeks of training before they start working on their own, including an internship at a child care center. They get $1,500 in start-up materials like naptime cots, books and toys. CWE pays their liability insurance. There are sick days and holidays. And providers can get tuition reimbursement, allowing them to further their education.

The model was devised to address virtually every problem with family day care, from unreliable income to little room for advancement to insurance costs, and initially it pulled in a wide swath of partners. In early 1998, CWE won a $5 million welfare-to-work grant from the feds, good for two years. The organization forged partnerships with numerous city agencies and nonprofits, even convincing HRA to count their training as a welfare-to-work program.

A draft proposal envisioned a hive of activity, training 3,000 to 5,000 family day care providers citywide, caring for 12,000 to 20,000 children. Each provider’s home was supposed to serve as an outpost for preexisting neighborhood child care centers–hence, “satellite.” Where the child care took place would be merely a matter of real estate. By the time CWE–heretofore inexperienced in child care–launched the program, it had scaled back its ambitions, aiming to create a thousand new jobs, four thousand new child care slots, and caring for 12,000 children in the program’s first two years.

It didn’t quite work out that way. The program has largely floundered financially since its inception in 1998, largely because the cash flow just wasn’t sufficient to fully realize the vision. By November 2002, the program had cumulatively hired just 174 day care providers, caring for a total of about 1,400 children citywide since it began–abysmally short of initial projections.

Part of the problem was that welfare recipients battling their own troubles don’t necessarily make the best child care providers. With welfare rolls already shrunk to the toughest cases, few are in a position to set up their own business. “Let’s face it, we’re working with a much smaller group of people on public assistance,” explains director Tarmo Kirsimae. “These are in many cases the hard to employ, less skills.”

Angela Threadgill, 33, started the child care training program at CWE this past October. A single mother of two, Threadgill has been on and off public assistance since her first son was born eight years ago. “I stayed on it long enough to take care of my son,” explains Threadgill, who, like many women, helped supplement her welfare checks by informally babysitting for local children. Her biggest barrier to work is really just that she hasn’t had much of it in the formal workplace.

Threadgill, who joined the program after seeing a flyer–always interested in working with kids, she “just snatched it off the pole”–is confident she can pass official muster. Her apartment has the two exits required by the fire code. She’s drug-free and hasn’t had any difficulties with the law. And she’s never had a visit from the Administration for Children’s Services; an open case–tens of thousands of families are investigated each year–would prevent her from gaining her license.

Ultimately, it’s her familiarity with child care, and a professed love of children, that led Threadgill to the program. “There’s a lot of other jobs I could be applying for, but this is something I know more about,” she says.

Her classmate Selisa Bethea is a bit more pragmatic. A single mother of an autistic child, Bethea turned to public assistance last year when she couldn’t find proper child care for her son. “I want something stable, with good benefits,” she explains, having worked at a series of retail and clerical jobs. “It’s bad enough if I’m taking minimum wage, but if you can’t go to the doctor either, that’s kind of self-defeating.”

But providing all the extras that lured Threadgill and Bethea–sick days, tuition reimbursement, guaranteed income, training, health insurance–costs money, and lots of it. To keep its current 125 providers employed, caring for about 400 children, as well as train an average of 60 more each year, the program spends about $4 million annually. To make that formula work, CWE has had to pour its own resources into the program, juggle grants from various sources, wrangle extensions for its federal money and, really, just hang on. “Another agency, frankly, may have abandoned this project. We’ve eaten a lot of costs that we’re never going to regain,” laments Kirsimae. “Our board of directors hasn’t been too pleased.”

One reason money’s been so tight is that even though CWE claims its providers have training and offer services comparable to those at child care centers, HRA pays them its rates for family day care providers. It’s not a negligible difference: Center-based care for children under age 2 pulls in almost $270 per child, per week, while family day care brings in $135. (Informal care garners $101.) The family day care rate, Kirsimae asserts, set CWE back considerably. “We’ve been operating in a deficit,” he says. “It’s a couple million dollars a year.”

CWE lobbied the city aggressively, from the beginning, to obtain a higher rate for each child in its care. By last spring, finances had gotten so strained that CWE sent layoff notices to its providers–and sent copies to government officials familiar with the program. They finally won a promise from the state that Satellite would get payment equivalent to 95 percent of the rate for child care centers. As of late November, however, CWE was still waiting for the money to start coming through.

CWE’s model is struggling elsewhere as well. Despite the program’s difficulties, CWE won another federal welfare-to-work grant in 1999, this time for $12 million to expand the program nationally. That program’s initial goals were to train 1,400 providers and employ just over half of them, providing care for about 3,000 children. By the fall of 2002, 200 providers were being employed by the national program (31 of them in New York). The program has scaled back its goals, and of the seven sites initially planned for the program, just two–Milwaukee and a conglomeration of counties in rural Alabama–were still fully operational.

The obvious way to battle high costs is to cut down on the benefits offered to providers, but that would defeat the purpose of the program. Asked if she’d still pursue child care in other circumstances, Bethea hesitates. “Well, I wouldn’t mind doing it,” she says quietly. “But not without health insurance.”


It’s 9:30 at night, and Kimberly Paul got home about an hour ago. Her job as a paralegal temp often keeps her late when a case is due, and tonight was no exception. Still, she got home in time to say good-night to Kwame and say evening prayers with him over the phone, the way they try to every night.

In most every way, Paul is a welfare-to-work success story. She’s no longer on public assistance. She’s held a steady, skilled job for over a year. She takes home, on average, about $1,400 every month. There have been bumps along the way–the eight-month wait before her child care subsidy kicked in, for one thing, which would have brought her stability tumbling down if Kwame were being cared for by anyone other than his grandmother. “In my circumstances, I have a mother who is a day care provider, but if not, I’d probably be at home, on welfare, trying to figure out how to make ends meet,” says Paul.

Still, Paul’s success is contingent on the fragile web that holds up the working poor–subsidies coming through, nobody getting sick–and carries with it a price that no middle-class mother would consider paying: her child doesn’t live with her.

And she can’t see how that will change anytime soon. Since Paul was sick for a day last week, she needs to work an extra hour or so every day next week. She’s paid hourly, so her check shrinks when she doesn’t show up.

And she’s thinking that, maybe, if she could find someone to shuttle Kwame to school in the mornings–she has to leave a good 45 minutes before he does if she’s going to make it to work on time–and if she could find someone to pick him up, and if she could find someone who’d deal with her occasionally unpredictable hours, and if she could arrange all that with her voucher from the government, then maybe Kwame could live with her.

Research assistance by Helen Matatov and Jamie Katz.