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In addition to the problems stated in post #1, a new danger has arisen: Private Equity. These Wall Street vultures aim to suck child care dry. Story in the Atlantic (paywall site).
When private equity bought up nursing home chains one of the first things they did was cut the nursing staff in half. In half. And nursing homes were never known for being all that well-staffed to start with. Read about it in a book called The Big Fail which has a whole chapter on the private equity debacle that is long term nursing home care. Some states are now adopting new laws to require at least a minimum ratio of patients to nurse staffing. Now that the horse has run off, some states are closing the barn door; always in reactionary mode, never proactive.
The Atlantic articles talks about how the legal structures of ownership shield the firms from liability; if anything bad happens to your child you will have little or no legal recourse available to you. Swell. The deck is stacked in the house's favor.
As various states and the federal government invest more funds into child care, there seems little or no thought on how the money is spent, performance metrics, value, and accountability. I expect the usual greed-fest followed by the usual "how could we know THAT would happen" deflection from legislatures. The beat goes on.
What will private equity due to child care?
One thing that I have long held as a belief is that anything involved in 'critical infrastructure' should be off limits to private equity firms. Even though it appears contrary to 'free markets', the societal need outweighs the risk of squeezing every profit at any cost. Profit at the expense of public safety should simply be criminal.
One can make an argument that childcare and education are critical infrastructure- human capital as it is coined in industry. PE should stay out of that arena.
In addition to the problems stated in post #1, a new danger has arisen: Private Equity. These Wall Street vultures aim to suck child care dry. ....
What will private equity due to child care?
My first thought... To control child care and the profits therein... PE will just need to take over the USA Public Schools +/-
Quote:
Originally Posted by Threerun
...
One can make an argument that childcare and education are critical infrastructure- human capital as it is coined in industry. PE should stay out of that arena.
But... the current infrastructure who has been doing k-12 childcare for the past 50 yrs has not been able to accomplish the task while being paid a very handsome fee to so so.
Oh we are one paycheck house. I am the breadwinner while my wife is the Parent winner. We choose this path because she wanted too...ahmm and plus I did NOT like the idea of strangers watching my kids. They still grew up to be a royal pain but they are my royal pain. Its possible.
I take my hat off to you and your wife. Families CAN live with one paycheck. In many cases that I have seen, people love to live well beyond their means. Others, want to have what others have even if that means getting in debt. Also, many do not want to sacrifice to let go, at least temporarily, of things that are not necessary to survive.
Nothing wrong if all of us want to achieve in the world to feel accomplished. But to me, family is the most important goal in my life and my wife. We, as a couple, decided that it was also best for her to be a stay at home mom. She has no regrets and has said it was the best decision she ever made. She sees the results of her work on our children. But many do not feel accomplished if they are achieving a lot in the business world. They may not like to admit it, but deep inside, that is their most important goal than their own kids. Others are honest enough and have decided not to have kids. That is fine because they do not raise latch kids. I had so many soldiers that I had to "raise" because they were latch kids. Many parents fool themselves into saying that the kids learn to be self-sufficient. They do, but at what cost? Look at the stats an many of them end up with high divorce rates, drug problems, and lack social skills. I know somebody will not like what I am writing and that is fine. Someone will give the typical reply that those things do not apply to them. That may be true because there are exceptions as in many areas of life. I am talking of the big picture.
In the spirit of equality, I am not suggesting that the woman is the one that should stay at home. More and more I have seen the man doing so. The important thing is that there is no one better to raise children than their own dedicated parents.
This idea that "you cannot live with one income" has spread so much that many do not even sit down and think if it is possible to try if it is possible to try a one income family.
When I was in the Army, countless soldiers came to me for advice because they did not know how to live "check by check." Well, pretty much every time I sat down with them and went over their finances, I proved them that they can. I was a matter to learn to budget your money.
My wife and I did the same and still were able to have fun, travel, and raise our kids who had chance to see so many parts of the world by us learning how to spend our money and till enjoy life.
You have a great day,
elamigo
My first thought... To control child care and the profits therein... PE will just need to take over the USA Public Schools +/-
But... the current infrastructure who has been doing k-12 childcare for the past 50 yrs has not been able to accomplish the task while being paid a very handsome fee to so so.
Childcare can be challenging to find. My wife and I had two kids and we tried 3 different child care providers. One was what I'd coin as an institutional type- almost pre-school. We didn't care for it. We got on a waiting list for a highly regarded in-home type setting with limited kids under their watch. Best move for us and our kids.
So not sure what you mean by 'current infrastructure not being able to accomplish the task'. It has, it's just not enough of them, and some-like the in home situation we used have been beset by ever increasing levels of regulation, some so onerous it's simply not worth the effort for a small outfit to do it any longer.
Running a child care business has long been a very challenging math problem: Many providers can barely afford to operate, yet many parents cannot afford to pay more.
During the pandemic, there was temporary relief. The federal government spent $24 billion to keep the industry afloat. Many providers were given thousands of dollars a month, depending on the size of their businesses, which they used to pay for expenses, the biggest of which was wages.
But that financing, which started in April 2021, expired in September 2023. Five months later, the child care business is more precarious than ever.
In addition to the end of the monthly checks, providers’ costs have increased along with inflation — for food, supplies and liability and property insurance. Rising wages at food service and retail jobs have made it harder to recruit child care workers, one of the lowest-paying jobs in the country.
Tax cuts for billionaires, nothing for kids. The U.S. Chamber of Commerce wrings its hands over an economy that fails to meet its holy grail of 3% annual growth to keep profits fat as the birthrate continues to decline because people can't afford to be parents.
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So not sure what you mean by 'current infrastructure not being able to accomplish the task'. It has, it's just not enough of them, and some-like the in home situation we used have been beset by ever increasing levels of regulation, some so onerous it's simply not worth the effort for a small outfit to do it any longer.
Yes, regulations designed so that your kids spend time in a clean, warm, safe environment cared by an appropriate number of care takers. Hopefully care takers with experience and/or education and maybe licensing.
Are you sure that this regulation is not needed? You really think all the day cares will self regulate when every regulation makes them less profitable by design... I have my doubts...
Yes, regulations designed so that your kids spend time in a clean, warm, safe environment cared by an appropriate number of care takers. Hopefully care takers with experience and/or education and maybe licensing.
Are you sure that this regulation is not needed? You really think all the day cares will self regulate when every regulation makes them less profitable by design... I have my doubts...
Some states have the same standards for Daycare centers that serve 100 kids or 5. Financial record keeping, frequency of inspections, standards for sleep areas, play areas, surveillance equipment... the list goes on and on. So yes- regulatory burdens can keep small in-home daycare providers out of the market. They can't afford to operate without raising prices which then leads to an affordability crisis.
There are fewer of them (smalls) today than 20 years ago when our kids were in daycare.
There is nothing immoral, unethical or illegal about Private Equity (PE) & their investments in childcare.
Remember where PE gets money to invest in the first place: the primary source is public sector union pension plans, which invest pension assets into PE to help pay the monthly pension checks of public sector union retirees, together with their health insurance.
Yes, regulations designed so that your kids spend time in a clean, warm, safe environment cared by an appropriate number of care takers. Hopefully care takers with experience and/or education and maybe licensing.
Are you sure that this regulation is not needed? You really think all the day cares will self regulate when every regulation makes them less profitable by design... I have my doubts...
And those regulations got the in home care takers with a child or two taking in a child or two out of business.
Quote:
Originally Posted by moguldreamer
There is nothing immoral, unethical or illegal about Private Equity (PE) & their investments in childcare.
Remember where PE gets money to invest in the first place: the primary source is public sector union pension plans, which invest pension assets into PE to help pay the monthly pension checks of public sector union retirees, together with their health insurance.
How many kids did you have in daycare when you were not in mogul income level and your wife worked as well to pay the mortgage?
WFH turned me into the after care pick up person of choice when parents were stuck in traffic. One minute over = $50. Try that with two kids and parents under 100k.
Last edited by Mike from back east; 02-29-2024 at 04:18 PM..
Reason: Merged 2:1
Infant care in my area starts at $3000ish/mo and you need to get on waitlists the moment you conceive. That sounds like a joke, but when I recently contacted local centers to recalibrate my expectations I was told that the waitlist was for a year out - 9 months + 3 months of parental leave.
It's so bad that it's even preventing me from becoming a foster parent. There is no guarantee that there would be childcare available, even if the state covers a fair amount of the expense. Forget about adopting - it's too expensive to pull off on one income (especially in the HCOL region where I live) but unless you are working with a pregnant mother up to the point of delivery from early on, it's unlikely that you could get off a waitlist for a spot.
I make in the top 15% of incomes in the country, and can't afford $4500/mo in PITI for a starter home plus $3000/mo for childcare for one (G-d forbid twins...). And very few of my friends have kids, and if they do they're all starting after 35.
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