[House Hearing, 116 Congress]
[From the U.S. Government Publishing Office]




 
   TAKING CARE OF BUSINESS: HOW CHILDCARE IS IMPORTANT FOR REGIONAL 
                               ECONOMIES

=======================================================================

                                HEARING

                               before the

      SUBCOMMITTEE ON RURAL DEVELOPMENT, AGRICULTURE, TRADE, AND 
                            ENTREPRENEURSHIP

                                 OF THE

                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED SIXTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                            FEBRUARY 6, 2020

                               __________

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]                               
                               

            Small Business Committee Document Number 116-070
             Available via the GPO Website: www.govinfo.gov
             
             
             
             
                             ______

             U.S. GOVERNMENT PUBLISHING OFFICE 
39-604                 WASHINGTON : 2020             
             
             
             
             
             
             
                   HOUSE COMMITTEE ON SMALL BUSINESS

                 NYDIA VELAZQUEZ, New York, Chairwoman
                         ABBY FINKENAUER, Iowa
                          JARED GOLDEN, Maine
                          ANDY KIM, New Jersey
                          JASON CROW, Colorado
                         SHARICE DAVIDS, Kansas
                          JUDY CHU, California
                           MARC VEASEY, Texas
                       DWIGHT EVANS, Pennsylvania
                        BRAD SCHNEIDER, Illinois
                      ADRIANO ESPAILLAT, New York
                       ANTONIO DELGADO, New York
                     CHRISSY HOULAHAN, Pennsylvania
                         ANGIE CRAIG, Minnesota
                   STEVE CHABOT, Ohio, Ranking Member
   AUMUA AMATA COLEMAN RADEWAGEN, American Samoa, Vice Ranking Member
                          TROY BALDERSON, Ohio
                          KEVIN HERN, Oklahoma
                        JIM HAGEDORN, Minnesota
                        PETE STAUBER, Minnesota
                        TIM BURCHETT, Tennessee
                          ROSS SPANO, Florida
                        JOHN JOYCE, Pennsylvania
                       DAN BISHOP, North Carolina

                 Melissa Jung, Majority Staff Director
            Justin Pelletier, Majority Deputy Staff Director
                   Kevin Fitzpatrick, Staff Director
                   
                            C O N T E N T S

                           OPENING STATEMENTS

Hon. Abby Finkenauer.............................................     1
Hon. Jim Hagedorn................................................     3

                               WITNESSES

Ms. Cindy Cisneros, Vice President, Education Programs, Committee 
  for Economic Development of the Conference Board (CED), 
  Arlington, VA..................................................     5
Mr. Dan Levi, President, Levi Architecture, PLC, Cedar Falls, IA, 
  testifying on behalf of the Black Hawk Child Care Coalition....     7
Ms. Sarah Piepenburg, Owner, Vinaigrette, Minneapolis, MN, 
  testifying on behalf of Main Street Alliance...................     8
Dr. Veronique de Rugy, Senior Research Fellow, Mercatus Center, 
  George Mason University, Arlington, VA.........................    10

                                APPENDIX

Prepared Statements:
    Ms. Cindy Cisneros, Vice President, Education Programs, 
      Committee for Economic Development of the Conference Board 
      (CED), Arlington, VA.......................................    21
    Mr. Dan Levi, President, Levi Architecture, PLC, Cedar Falls, 
      IA, testifying on behalf of the Black Hawk Child Care 
      Coalition..................................................    33
    Ms. Sarah Piepenburg, Owner, Vinaigrette, Minneapolis, MN, 
      testifying on behalf of Main Street Alliance...............    38
    Dr. Veronique de Rugy, Senior Research Fellow, Mercatus 
      Center, George Mason University, Arlington, VA.............    43
Questions for the Record:
    None.
Answers for the Record:
    None.
Additional Material for the Record:
    First Five Years Fund........................................    50


   TAKING CARE OF BUSINESS: HOW CHILDCARE IS IMPORTANT FOR REGIONAL 
                               ECONOMIES

                              ----------                              


                       THURSDAY, FEBRUARY 6, 2020

                  House of Representatives,
               Committee on Small Business,
   Subcommittee on Rural Development, Agriculture, 
                       Trade, and Entrepreneurship,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:08 a.m., in 
Room 2360, Rayburn House Office Building. Hon. Abby Finkenauer 
[chairwoman of the Subcommittee] presiding.
    Present: Representatives Chabot, Finkenauer, Craig, 
Hagedorn, and Stauber.
    Chairwoman FINKENAUER. Good morning. The Committee will 
come to order.
    I want to make sure I thank everybody this morning for 
being here, especially those who flew a long distance from Iowa 
or Minnesota. It means a lot that you are here to talk about 
this very important issue facing our country.
    In Iowa, when I talk to employers about workforce 
development and ways to bring new investment into our region, 
access to affordable childcare almost always comes up and it is 
almost always at the top of the list.
    Parents are turning down raises and promotions because they 
are afraid to lose childcare assistance benefits or just 
leaving the workforce all together because it is less expensive 
to stay home. Our businesses are losing thousands of dollars 
due to employee turnover because their workers cannot find 
reliable childcare. Jobs are going unfilled, and employers are 
struggling to attract talent because of the lack of affordable 
childcare in our communities. It is feeding our state's 
workforce shortages, and our entrepeneurs are feeling the 
effects as well.
    I met a young mom named Phoebe, who recently moved back to 
Iowa and opened a restaurant in Cedar Rapids with her husband. 
Her heart is in the business, but they are struggling to find 
childcare for their new little one. They actually had to hire 
front-house help that used to be Phoebe, which is kind of 
disappointing because she wanted to be part of the business as 
much as possible and now has had to step back partly because of 
the lack of childcare. Fortunately, they actually have family 
in the area, so they have been able to step up and help. But 
that is not the case for everybody, and it should not have to 
be. In Iowa in particular, more than 350,000 kids live in 
communities where they do not have access to childcare, meaning 
that thousands of parents are being forced out of the 
workforce.
    With the lowest unemployment rate of any state in the 
nation, this is an issue that we cannot afford to ignore in 
Iowa, and Mr. Levi, we are grateful you are here to talk about 
that. When parents cannot access affordable childcare, the 
effects are felt across the entire economy. This issue is 
especially pronounced in rural communities. In Iowa, more than 
one-third of our rural residents are living in areas considered 
childcare deserts, places where demand for childcare exceeds 
supply by more than three to one.
    For our rural businesses that already struggle to attract 
talented employees, access to childcare is another challenge 
they have to overcome when it comes to recruitment and 
retention. Even in areas where there are enough providers, 
childcare is so expensive that some families cannot afford it.
    Over the last decade, the cost of childcare has increased 
by 25 percent. A family of four in Iowa is paying as much as 
$1,300 a month to cover the cost of childcare. Some of my 
colleagues here today are from states where the average cost is 
much higher. In some parts of the country, the cost of 
childcare is even as high as college tuition.
    When I talk to business owners about access to affordable 
childcare, they want to be part of the solution. They do not 
want people to have to choose between a paycheck and starting a 
family. They know that a strong workforce is not just good for 
business--it is good for the future of their community.
    During today's hearing, I hope to explore how childcare can 
drive economic growth and help our small businesses thrive. We 
will look at how access to childcare, along with policies like 
paid family leave, can contribute to improved productivity and 
retention in the workplace. Our witnesses will also speak to 
some of the challenges and opportunities for small business 
owners who want to improve access to childcare, not only for 
their employees but for their own families as well.
    Small businesses are much less likely than larger firms to 
offer childcare benefits. For some small operations with razor-
thin margins, they might not have the resources or the 
expertise to even offer common benefits like childcare referral 
services or dependent care assistance plans, let alone onsite 
child care.
    Helping support small businesses and rural communities that 
want to improve access to affordable childcare will be an 
important part of our conversation here today.
    I also want to take this opportunity to announce that later 
today I will be helping introduce legislation led by my 
colleagues, Congresswoman Susie Lee and Congressman Pete 
Stauber, who sits on the Small Business Committee. This 
legislation would expand financing options for childcare 
operations through the Small Business Administration. Thank you 
for your leadership, Ms. Lee and Mr. Stauber.
    Today, we will also be hearing from Mr. Levi, who I talked 
about earlier, who came all this way from Iowa and we are 
grateful that he made the trip. His partnerships with nonprofit 
childcare centers is an example of how we can improve access to 
care.
    Lastly, I hope to touch on the importance of our childcare 
providers who are often small business owners themselves. 
Whether they operate a center or run their business out of 
their home, providers are the people on the ground trying to 
improve access. Federal proposals to increase access to 
affordable childcare will only further drive demand for 
childcare services. For example, the Child Care for Working 
Families Act would create 700,000 new jobs for childcare 
providers. We are going to need our small businesses to help 
meet this demand.
    Thank you all again so much for being here today. It means 
a great deal, and this is going to be a very important 
discussion and something that we need to be having in 
Washington and across our country.
    I would now like to yield to our Ranking Member for the 
day, Mr. Hagedorn.
    Mr. HAGEDORN. Well, thank you, Madam Chair. I appreciate 
your fine opening statement. And you holding this hearing. It 
is a very important issue. Something that many of us have been 
working toward. And I am also on that legislation with you, to 
make sure that we can focus SBA monies to loans and so forth to 
get providers going. Very important.
    So like health care, the childcare industry presents many 
challenges, especially for those in rural communities. Lack of 
access, lack of choice, and high cost consistently discourages 
parents from reentering the workforce. This reduces demand for 
the few childcare entities in those areas and raises costs 
while eliminating jobs. That is not good.
    Programs like Head Start or suggested universal childcare 
programs may only fill part of the gap, but a vibrant private 
sector option must be part of the calculus. And I think that is 
one of the things that we are going to focus on today is to 
make sure that that is available and there is great opportunity 
in those areas in the private sector.
    Each community, each parent, and each child has unique 
wants and needs that are better served when choices are 
expanded. With fewer restrictions and fewer regulations in 
those areas that do not increase health and that do not 
decrease or in any way get in the way of our health and safety 
outcomes for children, you know, more opportunities are often 
provided. So, when there are more choices for child care, 
parents are more likely to obtain full-time employment and 
promote economic developments in our communities.
    In my home state of Minnesota, child care costs are over 
$16,000 per child annually, and that comprises about 21 percent 
of median family income. I represent southern Minnesota, and in 
that our largest city is Rochester, and the average cost in 
Rochester is approximately $1,200 per child per month. So, it 
is pretty extraordinary when you think about it.
    According to the U.S. Department of Health and Human 
Services, child care is considered affordable if it costs no 
more than 10 percent of a family's income. Yet, Minnesota is 
not alone in being unaffordable. In fact, every state in the 
union, including D.C., is unaffordable by that standard. So 
that is quite something.
    These costs only increase when variables, such as 
additional children, medical requirements, and single parents 
are in the mix. So that is pretty much best-case scenario is 
$16,000 per child in Minnesota. That is best case scenario, and 
from there it gets higher.
    I look forward to hearing the challenges presented within 
the childcare industry and what we can do to reduce burdensome 
regulations and costs within this field. I would note for the 
record that there are people that have traveled even further 
from the great state of Minnesota. I am looking forward to all 
the testimony from our witnesses. And thanks again for holding 
this hearing.
    Chairwoman FINKENAUER. Thank you, Mr. Hagedorn. The 
gentleman yields back.
    If Committee members have an opening statement prepared, we 
would ask that they be submitted for the record.
    I would now like to take the opportunity to explain our 
timing rules. Each witness gets 5 minutes for testimony. There 
is a lighting system to assist you. The green light will be on 
when you begin, and the yellow light will come on when you have 
1 minute remaining. The red light comes on when you are out of 
time, and we ask that you stay within the timeframe to the best 
of your ability.
    I would now like to introduce our witnesses who have taken 
time again away from their families and their businesses to be 
here today for this important hearing.
    Our first witness is Ms. Cindy Cisneros. Ms. Cisneros is 
the vice president of Education Programs at the Committee for 
Economic Development. She is responsible for leading their 
portfolio of education work, which includes early childhood 
education, K-12, postsecondary, and workforce development. Ms. 
Cisneros has in-depth experience providing technical assistance 
to state and district educators on the successful 
implementation of national education laws. She previously 
worked for the U.S. Department of Education.
    Thank you so much, Ms. Cisneros, for being here today.
    Our second witness is from my district, Mr. Daniel Levi 
from Cedar Falls. Mr. Levi is the principal and owner of Levi 
Architecture, an Iowa small business. Levi Architecture has 
worked on a variety of projects, including commercial, 
industrial, residential, and educational, with a special 
interest in childcare facilities. Mr. Levi has been 
instrumental in development of childcare infrastructure. 
Through his work as a board member of Exceptional Persons, 
Inc., and the Black Hawk County Child Care Coalition, which is 
an incredible organization and group of folks, Mr. Levi has 
been working alongside community partners, businesses, and 
childcare providers to address the need for childcare in 
northeast Iowa.
    Thank you for all that you do and for taking time away from 
your business and your family to be here. We look forward to 
hearing from you.
    Our third witness is Ms. Sarah Piepenburg.
    Ms. Piepenburg is the owner of Vinaigrette, a family-owned 
and operated food store in Minneapolis, Minnesota, with five 
employees. A former HR consultant, Ms. Piepenburg and her 
husband have firsthand experience struggling to find affordable 
childcare for their family, and they work hard to provide a 
supportive work environment for their employees. Ms. Piepenburg 
is the mother of three, a board member of Ripples of Kindness, 
the Minnesota Breastfeeding Coalition, and a member of Main 
Street Alliance.
    Thank you for taking time away from your business and your 
family and traveling all the way here.
    I would now like to yield to our Ranking Member for the 
day, Mr. Hagedorn, to introduce our final witness.
    Mr. HAGEDORN. Thank you, Madam Chair. I appreciate that.
    Our final witness today is Veronique de Rugy. Doctor, 
before I go any further, did I get that close? All right. That 
is not too bad. You know, for southern Minnesota, not too bad.
    A senior research fellow at the Mercatus Center at George 
Mason University, where I went to school, George Mason, a fine 
institution of higher learning. Her expertise includes the U.S. 
economy and taxation. Before her tenure at the Mercatus Center, 
she was a resident fellow at the American Enterprise Institute, 
a policy analyst at the Cato Institute, and a research fellow 
at the Atlas Economic Research Foundation. She also oversaw 
academic programs in France for the Institute for Humane 
Studies here, received her M.A. in Economics from Paris 
Dauphine University, and her Ph.D. in Economics from the 
Pantheon-Sorbonne University.
    All that pretty good so far? Good.
    In addition to her extensive knowledge and expertise in 
economics, she is an acclaimed writer with articles published 
in the New York Times, the Wall Street Journal, and many 
others. She was named one of Politico's Top 50 Thinkers, Doers, 
and Visionaries Transforming American Politics in 2015. Thank 
you for taking time to speak with us. We look forward to your 
testimony.
    Chairwoman FINKENAUER. Thank you, Mr. Hagedorn.
    Now I would like to recognize Ms. Cisneros for your opening 
statement.

    STATEMENTS OF CINDY CISNEROS, VICE PRESIDENT, EDUCATION 
PROGRAMS, COMMITTEE FOR ECONOMIC DEVELOPMENT OF THE CONFERENCE 
   BOARD; DAN LEVI, PRESIDENT, LEVI ARCHITECTURE, PLC; SARAH 
   PIEPENBURG, OWNER, VINAIGRETTE; VERONIQUE DE RUGY, SENIOR 
   RESEARCH FELLOW, MERCATUS CENTER, GEORGE MASON UNIVERSITY

                  STATEMENT OF CINDY CISNEROS

    Ms. CISNEROS. Good morning. My name is Cindy Cisneros and I 
serve as the vice president of Education Programs at the 
Committee for Economic Development, or CED, which is the public 
policy center of The Conference Board (TCB), and it is a 
nonprofit, nonpartisan, business member-driven organization. 
Our business leaders know that a skilled workforce is paramount 
to economic prosperity.
    From CED's perspective, access to quality affordable child 
care is a two-generation strategy. It helps fuel economic 
growth by supporting working parents and supporting the healthy 
development of young children.
    Americans are working today, including mothers of very 
young children. Over 15 million children under age 6 have 
working parents.
    In 2019, CED released a study, Child Care in State 
Economies, which reviewed the use of child care by families and 
the economic impact on states. We found that child care is an 
industry that plays a significant role in economic growth. The 
industry, which includes both center-based and home-based child 
care, had a total economic impact in 2016 of $99.3 billion. 
This includes $47.2 billion in revenue, plus another $52.1 
billion in spillover in other industries.
    Service industries of comparable size include medical labs 
at $47 billion, and spectator sports at $46 billion. In terms 
of jobs, the spending of 1.5 million sole proprietors, or home-
based providers, and wage and salary employees in the childcare 
sector, support more than 507,000 workers in other industry for 
a total jobs impact of over 2 million.
    CED's study analyzed the use of market-based care--that is 
paid childcare services using the U.S. Census Bureau Economic 
Census, County Business Pattern Data, as well as Non-employer 
Statistics data from 2016.
    Without access to child care, parents reduce their hours or 
opt out of the workforce, and 94 percent of those are women. 
The use of paid child care is highest among two-parent families 
working full time at 88 percent, and single-parent families 
working 35 hours or more per week at 83 percent. Both family 
types far exceed the overall usage rate of 59 percent.
    Families regularly struggle with the availability, 
affordability, and quality of child care. Employers are 
impacted, with some estimates by more than $4.4 billion per 
year in lost productivity. Just last week, the Center for the 
Study of Child Care Employment estimated that parents forego 
about $30 to $35 billion in income because of challenges with 
child care.
    The supply of child care is uneven across communities. 
Childcare centers open in areas where the population is dense 
enough and has sufficient income to sustain a viable business 
model. Of concern, particularly in rural areas is the decline 
in family childcare homes, which we estimated at 20 percent 
over the past 10 years. For home-based providers, the hours are 
long, and the fees charged to parents do not offer an economic 
incentive to stay in business. Average revenue is only about 
$15,000 per year, which is below the poverty line for even a 
family of two.
    The current business model for childcare centers, which 
also depends on parent fees, is challenged to keep rates low 
enough for parents to pay but high enough to hire and retain 
high-quality staff. This has led to a childcare workforce that 
earns low wages at about $11 an hour and has high turnover. And 
yet, the childcare workforce is critical as it is the workforce 
that literally supports all other workforces.
    There is no easy way to make quality child care more 
available and affordable. However, there are approaches that 
can be considered.
    First, the National Academy of Sciences released a report 
in 2018 suggesting ways to better finance our Nation's 
childcare system. CED was represented in a NAS public hearing 
to inform that report with a business leader perspective. This 
set of recommendations is worth reviewing.
    Second, to help fill the gap between what parents can 
afford to pay and a livable wage for individuals working in 
child care, Congress could enact a refundable workforce tax 
credit that is linked to achieved competencies in early 
childhood education.
    Third, expand Small Business Development Centers (SBDCs). 
Child care is a business, yet many who operate within the 
childcare industry know early childhood but not best business 
practices. SBDCs could be required to partner with state 
childcare agencies to offer business technical assistance for 
centers and homes.
    Thank you for your time today. I am pleased to answer any 
questions.
    Chairwoman FINKENAUER. Thank you, Ms. Cisneros.
    Now, Mr. Levi, you are now recognized for 5 minutes.

                     STATEMENT OF DAN LEVI

    Mr. LEVI. Thank you very much. Appreciate the opportunity 
to speak today.
    My involvement with child care started through a very 
personal opportunity with a nonprofit we are associated with 
that houses our childcare resource and referral. We had a 
recruitment and retention problem. Part of that issue is the 
pay structure. We had opportunities but our community was not 
involved in the conversation that child care was a legitimate 
crisis in our area, and it is a crisis in our county.
    Over the last 5 years, the trends are we have lost 37 
percent of the childcare centers in our area, and it is 
continually impacting my clients in my professional practice 
where they are unable to expand due to lack of talent.
    So, we decided to attack the problem through a coalition of 
volunteers called the Black Hawk County Child Care Coalition, 
specifically addressing the private sector, making this a 
bottom-line issue, a cost issue, a quality control issue, and a 
recruitment issue. The state of Iowa has record-low 
unemployment as we have seen across the Nation. We have had 
this conversation with CEOs, CFOs, decision-makers at small- 
and medium-size businesses across our area to try to impede on 
them what the impact is if they are willing to listen. And many 
businesses already had the data and are now looking into that 
data.
    Our coalition quickly expanded, and we were asked to expand 
our reach just beyond our county. We are now into counties all 
across the state of Iowa, and all of these small towns have the 
same thing. They say we have a lack of talent for our 
businesses to expand and we have moms and dads moving away from 
our small towns. It is hurting rural economies. It is hurting 
our communities. We are seeing school districts reduce in size.
    Child care can be one of those economic drivers in the 
smaller communities. We have a series of examples that we have 
been engaged with, one of which is work through the Iowa 
Women's Foundation where we created a Center in a Box. It is 
not a very creative name but what we did provide was 
communities an opportunity to see what a child care actually 
could look like on paper in terms of its size and its cost 
while meting all of the state requirement regulations. The most 
important piece to that is a business plan that goes along with 
that model so these communities can understand what it is going 
to take not only to start a center from a startup cost 
standpoint, but also sustainability. We cannot have centers 
that open and close. It hurts the economy. It hurts the 
vitality of our small communities. And leaves moms and dads in 
a very difficult position where they may choose not to be 
employed any longer. Mr. Hagedorn brought that up specifically 
in his opening statement. We see that on a regular basis.
    So, what we have done is when we get into these communities 
through volunteerism, we talk to them about the resources that 
they need and the resources that they may have available to 
them. They simply do not know in many of these communities, 
they have neither the expertise, the talent, or the experience 
to understand how to attack these problems. When we involve the 
private sector and we partner with our school districts and we 
partner with other nonprofits and foundations, rather than just 
adding together our resources of varying types, we actually can 
multiply those resources to create something much better than 
we could when we try to do it all on our own.
    The smaller the community, the more important the school 
district can be in that they have different types of resources. 
Businesses have different types of resources that they can 
bring to the table that moms and dads do not. And when we start 
to get the private sector to understand that this is a black 
and white issue for them, this is a bottom-line issue for them, 
they have willingly come to the table and enthusiastically get 
involved in our conversations.
    In one example in Cedar Falls we have a co-op opportunity 
where we have major businesses sponsoring, and in exchange, 
they take down one of the two significant barriers to child 
care, access.
    In Black Hawk County, the average center has 37 kids on the 
waiting list. It could take a year or more to get a child into 
your center. When businesses partner in this way, they have 
guaranteed slots in the center. Then, on top of that, if they 
choose, they have the flexibility to also supplement or provide 
benefits to their employees to reduce the cost, but we leave 
that up to the individual employer. So, we try to create a 
system where there are flexible options to bring on different 
resources, people with different talents, people with different 
interests and different scales at all times. We found that this 
model works very well, and it is scalable, and it has been very 
successful across the state of Iowa so far.
    Specific examples of how policy, not more money, can make 
significant change is the state of Iowa has tied the quality 
rating system to centers to change the reimbursement structure 
on childcare assistance, which encourages centers to either 
expand the number of children that they take on assistance, or 
it actually makes them break even on that, reducing the 
incentive to cap their childcare assistance.
    Thank you very much.
    Chairwoman FINKENAUER. Thank you so much, Mr. Levi, for 
being here.
    Ms. Piepenburg, you are recognized now for 5 minutes.

                 STATEMENT OF SARAH PIEPENBURG

    Ms. PIEPENBURG. Chairwoman Finkenauer and members of the 
committee, thank you for this opportunity to testify today 
about how a robust infrastructure for child care would
    support my small business and other Main Street businesses.
    My name is Sarah Piepenburg, and I am a small business 
owner of Vinaigrette, a specialty oil and vinegar shop in 
Minneapolis, Minnesota. I have been running my business since 
2009 and currently have five employees. I am a member of Main 
Street Alliance, a national network of more than 30,000 small 
business owners.
    In Minnesota, we have the fourth highest costs in the 
Nation for infant care with the average cost for enrolling a 
Minnesota infant in a childcare center running $310 per week, 
or over $16,000 per year.
    For 2 years after we had our son, we did our best to piece 
together daycare and work. We sat on countless waitlists. I 
even delayed taking a job until my son had aged out of the most 
expensive infant care category, which costs more than in-state 
college tuition.
    I then took a part-time job and put my son in part-time 
child care. Even with all our juggling, I was still only taking 
home $244 a paycheck after childcare expenses.
    It did not seem worth it. I quit my job to stay home, but I 
knew we would have to find another solution.
    My husband and I became small business owners for a reason 
that does not fit neatly into our marketing materials. We 
needed child care and we could not make it work any other way.
    For my husband and me, the best choice was to go into 
business ourselves, arranging our schedules as best we could, 
and getting help with child care from family and friends. We 
used the $16,000 we would have put into child care to launch 
our business.
    While this may seem like an extreme solution, it is more 
common that you might think. In a Small Business Majority 
survey of small business owners, 29 percent stated that lack of 
access to child care was a major reason for starting their own 
business, due to the need for increased flexibility in their 
work schedules. But an even larger portion of entrepreneurs 
surveyed, 36 percent, say the lack of access
    to affordable, high-quality child care is a barrier to 
their business.
    Small businesses like mine operate on thin margins and 
cannot match the more generous childcare benefits offered by 
larger employers, resulting in a hiring disadvantage. A more 
robust childcare infrastructure would level the playing field 
between small and large businesses. Even if parents can afford 
child care, they often cannot find it. In my state, for 
example, 44 percent of Minnesotans live in a child-care desert, 
where there are simply no spots for anyone. That is lower than 
the average. More than half of families in America live in 
childcare deserts, areas where licensed child care is scarce 
and does not meet the needs for the number of children in the 
area.
    Rural and low-income urban communities are hit hardest by 
this lack of childcare infrastructure. Creating childcare 
infrastructure in these communities would increase labor force 
participation among parents driving local economic growth.
    Work schedules are also a challenge. Most daycares close at 
6 p.m., but my shop opens at 11 a.m. and closes at 7 p.m. 
Finding childcare coverage is even more complicated for shift 
workers and 24-hour employees in other industries.
    We need innovative solutions like the Child Care for 
Working Families Act to address the crisis from three fronts: 
maintaining quality, ensuring jobs, and capping costs for 
families.
    Passing Paid Family and Medical Leave would also help solve 
a key part of the childcare puzzle. A social insurance program 
like the Family Act would provide families with two caregivers 
up to 24 weeks of key bonding time with a new infant and 6 
months less of expensive infant child care. That is why small 
businesses overwhelmingly support paid family and medical leave 
policies like the Family Act.
    All of these challenges affect a robust small business 
economy. If we believe in small business, we need our lawmakers 
to change this system. Child care is not only a family issue; 
it is an economic one, too.
    Chairwoman FINKENAUER. Thank you so much, Ms. Piepenburg. 
Again, we really appreciate that you came here all the way from 
Minnesota.
    Now we would like to recognize Dr. de Rugy for 5 minutes.

                 STATEMENT OF VERONIQUE DE RUGY

    Ms. DE RUGY. Ms. Chairwoman, Mr. Ranking Member, and 
members of this Commitmtee, thank you for having me today to 
testify.
    Ensuring that a family can afford to raise children in 
America is an uncontroversial public policy concern. Many 
families have difficulty finding affordable and quality child 
care. In some places like Washington, D.C., daycare for infants 
and children younger than preschool age costs an average of 
$24,00 per child. This is a serious problem for most parents, 
especially for lower-income parents.
    Thankfully, not all states face the same childcare cost 
burden. But understanding what is driving the cost of child 
care in some areas and not others is key to designing the right 
policy. Before we start throwing more money at the problem or 
assuring new regulations, we must look at one important barrier 
to affordable childcare provision, and that is childcare 
licensing laws and requirements.
    I will share here three main findings from the academic 
literature on the issue.
    First, however well-intentioned, the imposition of strict 
licensing requirements actually restricts the supply of health 
care and make it harder for families by raising prices.
    Two, strict licensing requirements raise barriers to jobs 
for childcare workers.
    Three, this increase in cost is not accompanied by 
commensurable increase in quality or safety.
    So, what comes next in my testimony is an overview of the 
economic literature on occupational licensing across 
industries.
    So, first, licensing requirements generally restrict the 
supply of services in a licensed industry by prohibiting some 
perfectly competent workers from working as a provider.
    Occupational licensing laws also impose a high cost on the 
employees by forcing them to pay high fees, undergo many days 
of training or experience, or earn arbitrary certification.
    My written testimony includes some charts to that respect.
    By restricting competition between providers, occupational 
licensing also increases the price of goods and services for 
consumers.
    An often-cited report by the Obama Administration Council 
on Economic Advisors found that licensing laws can increase 
prices by 16 percent. Higher prices are hurting low-income 
consumers the most, obviously.
    Second, licensing hurts low-income workers as well. 
Economist Morris Kleiner found that restrictions from 
occupational licensing can result in up to 2.85 million fewer 
jobs nationwide and an annual cost to consumers of $203 
billion. The Obama Administration's report noted that these 
costs fall disproportionately on certain segments of the 
population--immigrants, military spouses, and reformed 
convicts.
    Other research supports these findings. Licensing laws are 
also a serious impediment to income ability by making it more 
difficult for low-income Americans who reach the first rung in 
their climb out of poverty.
    In addition, these licenses also operate as a substantial 
barrier to interstate mobility; hence, better labor markets as 
the licensing requirements vary between states and cannot 
transfer usually from state to state.
    Third, licensing requirements are often justified on the 
ground of quality control and public safety, and in theory, 
licenses might increase quality if it acts as a well-designed 
screening system. But on the other hand, it might decrease 
quality by limiting competition.
    Reviews of the academic literature suggests that the two 
effects cancel each other out, though more studies find that 
licensing reduces quality then find that it enhances it.
    Finally, the occupational licensing literature that focuses 
on childcare industries specifically reveal exactly the same 
pattern. Excessive staff-to-child ratio education or parking 
requirements increase the cost to the supplier, restrict the 
supply, and ultimately increase the price for parents.
    The solution to the current shortage of affordable care is 
not to drive costs higher with more money and more regulations. 
The first step is for state and local officials to look at ways 
to reduce excessive regulations that contribute to the high 
cost of child care.
    For instance, estimates suggest that relaxing the average 
mandate staff-to-child ratio by just one child across all age 
groups would reduce childcare prices by 10 percent or more. In 
Minnesota, that is $1,600. In D.C., it is $2,400. I mean, it is 
important.
    In order to fight the high childcare costs and lack of 
child care availability, Arlington County where I live, the 
County Board adopted a change to allow small, in-home daycare 
providers to care for up to nine kids without having to go 
through the county's extensive use permitting process. They 
also reduced parking requirements for childcare centers after 
business owners complained they were extensive and county staff 
found parking spaces were often unused. Other state and local 
governments follow this example.
    But I want to leave you with one warning. While these 
reforms might not be the whole answer to the challenge of high 
childcare costs, a failure to make these challenges will make 
other reforms by the Federal Government ineffective. Thank you.
    Chairwoman FINKENAUER. Thank you, Dr. de Rugy, for being 
here today as well.
    Now we will start our questions. I yield myself 5 minutes, 
and I would like to start with Mr. Levi.
    One thing I know you talked about in your testimony was the 
fact that people are struggling to move back to Iowa, or they 
are even leaving, because they cannot find childcare. I have 
seen this firsthand. I am 31 now. I have a lot of friends that 
I graduated high school with who went off to college, would 
love to move back home, raise their family, and be close to mom 
and dad in Iowa. However, they are struggling to do it, facing 
barriers related to jobs or to childcare. This is such a huge 
issue, so thank you so much for all that you have done with the 
Black Hawk County Child Care Coalition.
    One of the things I know you talk about with the Black Hawk 
County Child Care Coalition is the ``Child Care Center in a 
Box,'' which offers sample budgets, business plans, and other 
resources for childcare centers. That is huge.
    Can you talk about the need for this type of support and 
technical assistance, how folks are reacting to it, and what 
you think we can be doing to make sure that more people have 
the assistance that you have been putting out there?
    Mr. LEVI. Sure. I would be happy to.
    Again, the Black Hawk County Child Care Coalition was 
formed to address the crisis in Black Hawk County specifically. 
And as we started to do some speaking engagements, as our 
childcare resource referral department headed through EPI is 
doing talks over 19 counties, they started to get more and more 
inquiries. We started to see that this was far beyond our issue 
of just Black Hawk County. To do that Child Care in a Box, we 
partnered with the Iowa Women's Foundation who was across the 
state and regularly fields these questions of we also have a 
childcare problem. What can we do about it? We do not know what 
the next steps are. A small community, again, lacks the 
expertise and the experience. They would be referred to our 
coalition. We would pile in the car and make a road trip.
    And so now we found ourselves over about two-thirds of the 
state now, which does not speak to our expertise. It speaks to 
the need and the lack of expertise and the lack of resources 
that small communities have, not knowing even how to address 
the problem.
    Chairwoman FINKENAUER. Yeah. Have you found federal 
resources to expand on these efforts at all?
    Mr. LEVI. No.
    Chairwoman FINKENAUER. No?
    Mr. LEVI. It is all at the state or volunteer level.
    Chairwoman FINKENAUER. Yeah. Thank you for everything that 
you are doing. This is where we really need to be stepping up 
in this area.
    Ms. Cisneros, I know you had the opportunity to hear from 
Mr. Levi as well about his efforts to partner with businesses 
to start childcare centers in northeast Iowa. We know that more 
investment from the federal level is needed to address the 
childcare crisis. However, we also need an ``all hands on 
deck,'' approach to solve this.
    Can you talk about successful public-private partnerships 
that have been implemented to address this issue similar to Mr. 
Levi's or in that same space?
    Ms. CISNEROS. Yes. It is inspiring to hear what Mr. Levi 
had shared. There is a lot of creativity happening out there in 
the states. And there really are some innovative public-private 
partnerships, and that is something that CED has also promoted 
in terms of problem solving.
    One aspect in terms of thinking about these issues is 
really bringing all stakeholders or nontraditional 
stakeholders, like the business community, together.
    So, we have an example from Minnesota that we wanted to 
highlight, and that is First Children's Finance, which is 
headquartered in Minneapolis. And it is a nonprofit financial 
intermediary that works not only in Minnesota but also in 12 
other states throughout the Midwest. And First Children's 
Finance, they provide loans and grants to expand the supply of 
child care and improve the quality, and also provide that much-
needed technical assistance on running a business and being a 
business owner. They work directly with communities in both 
urban and rural areas. They help actually launch new childcare 
businesses, and they help provide support, again, to better 
manage the business aspects of operating a childcare business. 
And they help businesses expand.
    I thought these were great details about the project, and 
it has involved 19 rural communities. It has created 533 new 
childcare slots, 583 participants came together in town halls 
to develop right size solutions to increase the supply of 
affordable child care, and 87 percent of childcare businesses 
that participated in the project improved their business model.
    Chairwoman FINKENAUER. Interesting. Well, we are running 
out of time here, but I do want to ask you one other question.
    How would you change or improve the Child Care Development 
Block Grant to improve access to childcare and better support 
public-private partnerships?
    Ms. CISNEROS. In brief, wow, that is a big question because 
it does not really address the supply of child care. But it 
could be considering different uses of the Child Care and 
Development Block Grant such as for construction and things 
related to facilities and the condition of facilities. So, 
while the reauthorization in 2014 did put a higher emphasis on 
safety and development for kids, there are other considerations 
for use of that money to states as well.
    Chairwoman FINKENAUER. Thank you so much. Again, I 
appreciate your expertise and being here today.
    With that, I am out of time, so I will yield to Mr. 
Hagedorn for 5 minutes.
    Mr. HAGEDORN. Thank you, Madam Chair.
    Like I said at the beginning, it is a very important issue, 
and we talk with folks all across southern Minnesota and 
elsewhere about how difficult it is across the board. Obviously 
for our families with the extreme cost. I mean, that is taking 
money out of their back pockets and it is putting enormous 
pressure on our families. And from that standpoint alone it is 
an issue that we are going to continue to work on this, but we 
should be focused on it very intently.
    The other part of it though is when you get into some of 
the rural areas that I represent, you can get into towns where 
they do not have any providers. And then you start to think, 
well, how is that town going to continue to thrive and maintain 
its schools, because it is tough to attract teachers in who 
might be of child-bearing age, for instance, if you cannot find 
anybody to take care of the kids and you have to travel 20-30 
miles for that. Pretty soon they will want to go to some other 
town to teach. And on it goes.
    And so, you know, across the board, do we support the tax 
credits? Of course. Yes. And I think they need to be increased 
from even where they were under the tax bill. Individual Tax 
Reform is coming along so that is something that I am going to 
support wholeheartedly.
    But then we get into you talk about the different types of 
providers. So, Julie Eberhart of Rochester, she is an in-home 
provider as is another lady that I spoke with in Springfield. 
Two different towns. One is 115,000 people, the other is 2,000. 
But Ms. Eberhart tells me that these regulations in Minnesota 
are just unbearable. We started printing them out. There are 
250 pages of them here. There is another 150 to 200 pages of 
them, just the state of Minnesota, what they have to comply. 
So, if you are an in-home provider, you need to figure out what 
is in all this paperwork and then you have to comply with it. 
And that is on top of the work that you do which is incredible. 
It is driving up your costs, making your life miserable. So, we 
are going to encourage the state of Minnesota to make sure that 
this is streamlined, and we can do everything possible.
    But Doctor, you mentioned this a little bit. Could you 
maybe expand upon the cost and the enormous problems that they 
face because of these regulations?
    Ms. DE RUGY. Yeah. I mean, it is unquestionably a real 
problem. And as I said at the end of my oral testimony, I 
actually think that this is the number one thing to focus on 
because you can subsidize, you can give tax credits, you can do 
all of that stuff. If you do not actually do the fundamental 
work to lower the cost of being a supplier and being willing to 
supply, because here you are talking about the cost for people 
who are already in the business. But what is harder to see is 
all the people who do not get into the business precisely 
because of these costs. And the academic literature seems to 
suggest that it is not insignificant. It does really shrink the 
supply of child care. So, this should be the number one 
priority.
    The question for the Federal Government is what can the 
Federal Government do? And that is the hardest question because 
these are state and local regulations. I do think that there is 
hope because there is a big bipartisan movement right now to 
try to kind of highlight the cost of these regulations, but it 
is certainly, I think, the number one problem.
    Let me just say, you are trying to expand child care or 
make child care more affordable by subsidizing it. The problem 
is, if you subsidize it, you may increase the demand, right, 
and that increase in demand may trigger an increase in the 
supply but it will not be enough if the regulations are so 
strict that no one wants to get in. And what you are going to 
have is basically an extra increase in the price of child care. 
So, it is going to be counterproductive. This is why it is 
important to focus on this first because it is going to make 
any other policies you are trying to put in place not 
effective.
    Mr. HAGEDORN. Point well taken.
    So, Mr. Levi, I appreciate what you are doing and 
encouraging, for example, businesses to partner up. The City of 
Luverne, I was just there a couple weeks ago. They have a 
childcare issue, and I was talking with the mayor and others 
and I said, you know, maybe one of the deals is, you have a 
very forward-thinking city here, maybe some of these 
businesses, they are expanding, about 400 jobs in a city of 
5,000, so what are they going to do with the kids? So, you 
start getting the businesses to partner together, and I would 
open it up to anyone, what can we do at the Federal level to 
facilitate that? To make sure that that is possible and to 
encourage that? Because that seems to make a lot of sense.
    Mr. LEVI. The encouragement of getting, especially in 
small, rural communities, getting businesses to move to those 
communities or to expand, child care is obviously a significant 
issue. If you would tie dollars to mandated public-private 
partnerships, require communities to step up to the plate in a 
more significant way than they have been. That means the 
private sector needs to get involved because they have to 
understand this is affecting their bottom line. And if we want 
to get real movement on that, the private sector has to come to 
the table on this. This cannot be just the Federal Government 
paying for it, but it has to be something where we are tying 
any kind of assistance, be it CDGB funds or other programs, it 
has to be tied to a partnership.
    Mr. HAGEDORN. I do not know if I want to mandate and do 
those types of things. I just want to see that if they have the 
interest, that we do not stand in their way and we do 
everything we can to facilitate it. But I think the competition 
that the doctor and others were talking about makes the most 
sense.
    With that I will yield back. Thank you. Appreciate it.
    Chairwoman FINKENAUER. Thank you, Mr. Hagedorn.
    With that, I will recognize my good friend from Minnesota, 
Ms. Craig, for 5 minutes.
    Ms. CRAIG. Thank you so much, Madam Chair.
    I would just like to note for the record that we have 
perfect attendance from Minnesota on this Committee this 
morning. It is a great bipartisan delegation. So, it is great 
to be here.
    Honestly, I have four boys, and they are 22, 22, 21, and 
16, and I am having flashbacks of multiple car seats in the 
back seats here this morning. So, thank you. Thank you for that 
anxiety-ridden morning, Madam Chairwoman.
    Look, this is a critical issue across my congressional 
district and across the state of Minnesota. And what is 
stunning is it is so interrelated to the other issues that we 
face in our local communities. For example, the great city of 
Red Wing in my congressional district, we have got good jobs. 
What we do not have is affordable, accessible housing and child 
care. In fact, my local businesses often tell me that they have 
got an employee who is willing to move from the cities to Red 
Wing and there is a 9 month waitlist for daycare or child care 
in that community, and that is just something that parents 
really struggle with in our community.
    So, I will start with Ms. Cisneros just with a question. 
Especially in our small cities and our rural communities, at 
the Federal level, what would you have us really focus on? And 
then I am interested in Mr. Levi's response to sort of the 
regulation question. And then Ms. Piepenburg, you, being from 
Minnesota as well, anything that you would have to add to that.
    Ms. CISNEROS. So I definitely agree, it is an issue trying 
to figure out how to really create additional supply in rural 
areas. And we have talked about this partnership approach is 
really a primary strategy. There are a number of states who 
have really just taken it upon themselves and their communities 
to figure out with employers because they know employers need 
to rely on employees. Employees need to know that there is 
available child care. That will help draw industry. So, it is 
really pulling together and problem solving at a very local 
level. And so, we would support that type of grassroots 
approach rather than trying to mandate something at the Federal 
level.
    There are a lot of communities, such as in Charlotte, North 
Carolina, who came together and the business leaders decided 
they wanted to expand these opportunities and create more 
access for children, for 4-year-olds in terms of pre-K, and 
they funded a feasibility study and they got together with the 
county and said we are going to invest in this. They ultimately 
provided funding for scholarships so that they could get more 
educators, early educators into the field to help increase the 
supply.
    Ms. CRAIG. Is there an increased role for SBA in financing 
and helping to start up these businesses?
    Ms. CISNEROS. I think we would need more information in 
terms of what is really the need. If it was available, how 
would it be utilized? And with loans, it is challenging because 
you have to present a viable payback plan. And so, for this 
type of industry, not a lot of income, not a lot of annual 
revenue, and that could be problematic, but I think it is worth 
exploring.
    Ms. CRAIG. Thank you.
    Mr. Levi, would you care to comment on the regulation point 
my colleague made a moment ago and just where I should be 
focused on this?
    Mr. LEVI. Certainly. There are two kinds of regulations. 
There is obviously the licensing, the programmatic side, and 
then there is the physical plan. And so obviously, as an 
architect, I am going to go into facilities existing and new 
facilities and look at the physical plan. The State of Iowa 
administrative code combined with the building code is pretty 
strict. It has some very significant barriers, especially on 
renovation of existing buildings. It makes it extremely hard to 
be cost effective. If you really want to make some change about 
competition and you want to make these businesses, people 
expand and get into the industry, it needs to be profitable. 
So, it is an actual career path for individuals. And the only 
way you are going to do that is you have to attack the number 
one cost and that is labor cost. We design buildings 
specifically, very detail-oriented, around the student-teacher 
ratio. Classrooms are exact minimum sizes to maximize those 
ratios. You cannot have six infants in a room when your ratio 
is one-to-four. That room has to be sized exactly for four or 
eight or 12. It has to be on that ratio. If you change that 
ratio, we can change room sizes. We can get more kids in the 
room and we can reduce the cost across the individual students. 
That is going to change the bottom-line profit and loss of a 
childcare center.
    Ms. CRAIG. Ms. Piepenburg, I did not leave you any time so 
maybe we will come back to you in a moment.
    With that, Madam Chair, I yield back.
    Chairwoman FINKENAUER. Thank you very much, Ms. Craig.
    We have the other Minnesotan. I would like to introduce Mr. 
Stauber, Ranking Member of the Subcommittee on Contracting and 
Infrastructure.
    Mr. Stauber, you have 5 minutes.
    Mr. STAUBER. Thank you, Chairwoman Finkenauer, and Ranking 
Member Hagedorn, for allowing me to speak at this Subcommittee 
hearing today.
    We all know child care is a pressing issue for many 
individuals in my district, and I am grateful to have the 
opportunity to be a part of this conversation this morning.
    With more and more parents choosing to dually work and 
raise their family, child care is hurting across the Nation now 
more than ever. Those in rural America are particularly 
impacted by this shortage, and we cannot continue to punish 
those who choose to live in our rural areas in the communities, 
like Minnesota's 8th Congressional District.
    That is why I was happy today to report that I, alongside 
Congresswoman Lee, and several members of this Committee, 
including Chairwoman Finkenauer and Congressman Hagedorn, to be 
introducing the Small Business Child Care Investment Act. This 
legislation will allow nonprofit childcare providers to apply 
for SBA loans. These loans will go a long way in keeping the 
doors open at childcare centers and providing for families that 
want to participate in the workforce.
    Additionally, I am also the cosponsor of the Family Care 
Act. This legislation will allow families with permanently or 
totally disabled dependents to claim the Child Tax Credit, 
which is worth up to $2,000 per qualifying dependent. Just 
another example where we are trying to help families as they 
try to provide care for their kids.
    I want to thank all the witnesses here today for sharing 
your testimony and expertise. It is you who help us as 
legislators create good public policy.
    I just want to ask a general question of each of you. What 
is the most pressing challenge regarding child care for future 
businessmen and women?
    And Doctor, you can go first.
    Ms. DE RUGY. So, I mean, as I said in my testimony, I think 
increasing the supply of child care is important and one of the 
ways to do it, and you have to do this, you know, first I think 
is to lower a lot of the requirements that are not, I mean, I 
am not saying just get rid of all the requirements but there 
are a lot of very strict requirements which do not add in terms 
of quality, increased costs, reduced supply, and then 
ultimately increase the price of child care. And this would be 
a priority.
    Mr. STAUBER. State and local rules and regulations?
    Ms. DE RUGY. Yes. And that is what makes this issue so 
difficult. That said, as I said, I think there is hope because 
there is a bipartisan consensus on this and I think President 
Obama's report on the issue got a lot of traction and is 
actually drawing a lot of attention to something that a lot of 
people were already talking about. And more half of this body 
in terms of information as opposed to regulation or money is 
worth doing.
    Mr. STAUBER. To your point, I know that the childcare 
provider for my four children is contemplating leaving the 
business because of the redundant rules and regulations, and so 
far their family has stayed in it but that is a real choice for 
her and her family to continue.
    Ms. DE RUGY. And it prevents new providers from entering.
    Mr. STAUBER. Stay that again?
    Ms. DE RUGY. It prevents new providers----
    Mr. STAUBER. Sure, absolutely.
    Ms. DE RUGY.--from entering the market.
    Mr. STAUBER. Absolutely.
    Ms. DE RUGY. As people leave.
    Mr. STAUBER. I concur with you.
    Ms. Piepenburg from the great state of Minnesota, can you 
answer that question? What is the most pressing challenge for 
those businessmen and women who want to start up reference 
child care?
    Ms. PIEPENBURG. Well, as a small business owner and a 
mother, I mean, if businesses lose over $4 billion because of 
absenteeism, and as a small businessowner I need people to work 
in my store. I would like to expand my business, but we need 
help in getting child care and to level that playing field 
because I cannot compete with Delta Airlines that has a 
childcare facility. And so, I need actual bodies, and so I need 
people to be able to work in my store.
    Mr. STAUBER. So is it a combination of child care and lack 
of workforce?
    Ms. PIEPENBURG. Absolutely.
    Mr. STAUBER. Thank you.
    Mr. Levi?
    Mr. LEVI. I would say the number one issue facing child 
care is the fact that they are simply not profitable. It is a 
business model that, at least myself as a small businessowner, 
I would not get into when you look at the labor cost associated 
with it and the potential revenues that you can reasonably 
charge a mom and a dad, you can strip regulations and you can 
reduce any of the expenses you want, that labor ratio based on 
the amount of income you can bring in simply is math that does 
not work. So, others have to come to the table. It has to be a 
community solution to a community problem.
    Mr. STAUBER. Thank you.
    Doctor, I wanted to talk to you about the regulations. As 
Ranking Member Hagedorn just showed, these are Minnesota's 
regulations. And you talk about people looking at this, a lot 
of paperwork, to get into child care. That is daunting for 
them. These are just the State of Minnesota's.
    Ms. DE RUGY. It is. These regulations are often put in 
place in the name of the quality of service and safety. And 
unfortunately, at least the academic literature that has looked 
at this issue, both for the childcare industry and for all the 
other industries, shows that on average a majority of these 
requirements do nothing to increase quality for consumers and 
safety. And in fact, there are more regulations that harm that 
aspect.
    Now, quality is hard to measure, right, but so it is a real 
problem because among all these regulations, some of them may 
be extremely valid and important to have. But many of them are 
either poorly designed or they are driven actually by special 
interests trying keep out the competition. So there is a lot of 
problems and it would be so important for state and local 
governments to really go and check each one of these 
regulations and really assess what is it they are doing and 
what they are achieving really and the impact they have on 
costs because everyone talks about an educator as a childcare 
provider. This is well and fine if there is no cost at all, but 
everything is a matter of actually not driving providers out of 
the system in order to increase the degrees of educators or the 
number of educators in the field. It is a tradeoff. Everything 
is a tradeoff.
    Mr. STAUBER. Thank you very much for that answer.
    Ms. Cisneros, I am out of time, and I apologize.
    Chairwoman Finkenauer, thanks for the extra couple minutes.
    Chairwoman FINKENAUER. Thank you, Mr. Stauber. And again, I 
appreciate your work on the issue.
    I just cannot say thank you enough to all our witnesses for 
your expertise on these issues. As we have heard today, access 
to affordable childcare is not just a family issue--it is an 
economic issue. Ensuring that the youngest and most vulnerable 
among us are safe is also something that Democrats and 
Republicans can both agree on. States differ on how they 
regulate childcare providers, yet the cost of childcare has 
increased around the country over the last decade. Whether for 
a small home-based business, a licensed provider, or a large 
childcare center, regulations are there for a reason. There are 
bad actors, but most of our providers get into this business 
because they love our kiddos. They care about their health and 
well-being. In Iowa, however, seven children have died in 
childcare since the beginning of 2018. Many of those deaths are 
the result of safety and licensing standards not being met. It 
is important that we enforce those standards and make sure that 
folks are following them. At the same time, we must continue to 
look at ways to meet the growing demand for child care by 
supporting providers, helping communities invest in childcare 
solutions, and making it easier for our businesses to be part 
of the solution. I strongly believe that this is an area where 
we can find bipartisan agreement.
    We just heard from the President on Tuesday about the need 
to further expand access to childcare. I hope that he and our 
colleagues in the Senate are willing to work with the House 
represented here in a very bipartisan Minnesota and Iowa way 
today on this issue across the aisle and across chambers. It is 
incredibly important to address this crisis and bring down the 
cost of childcare for working families.
    Thank you again so much to our witnesses who in some cases 
have come a long way to share your perspective with us.
    I now ask unanimous consent that members have 5 legislative 
days to submit statements and supporting material for the 
record.
    Without objection, so ordered.
    If there is no further business to come before the 
Committee today, we are adjourned. Thank you.
    [Whereupon, at 11:10 a.m., the Subcommittee was adjourned.]
    
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