WHEN MOM MUST WORK:
FAMILY DAY CARE AS A WELFARE-TO-WORK OPTION

1.0 Introduction: Why This Project?

1.1.Changes in federal guidelines and funding for social assistance

For three decades provisions and cost-sharing under the federal Canada Assistance Plan (CAP) guided and supported the development of the country's social safety net. Under its provisions the federal government matched provincial spending on social assistance and programs (including child care) that were intended to address and prevent poverty. Federal requirements included eligibility based on need, the right to appeal, non-profit administration and prohibited restrictions based on residency.

In 1990 the federal government reduced its financial liability by capping CAP funding to a 5% increase annually for the three 'have provinces' - Alberta, British Columbia and Ontario. The federal budget of 1995 unilaterally eliminated the Canada Assistance Plan. Its replacement, the Canada Health and Social Transfer, combined welfare funding with federal transfers to the provinces for health and post-secondary education. The budget's multi-year plan then reduced cash transfer payments to the provinces by over $7-billion and removed all welfare protections save residency.

During the same period national and provincial economies experienced recession associated with massive restructuring from manufacturing, agricultural and resources towards a service-based economy. Governments at both levels saw income security costs escalate while tax revenues dropped and took unprecedented steps to control spending. In addition to shedding responsibility for welfare costs, the federal government took further action to limit its social responsibilities by restricting eligibility to unemployment insurance.

This combination led to increased reliance by those displaced by the job market to the income program of last resort - welfare. Provinces saw their social assistance costs escalate and undertook measures to contain them. Extensive reviews of social assistance systems were undertaken with a view to promoting, or even forcing, activity believed to lead to reduce caseloads and get recipients back into the labour market.

Notable was the change in labour market expectation for single parents of young children. Canada's five largest provinces now consider single parents to be employable when their children are much younger - school and pre-school aged, and as young as 6 months of age in Alberta. There are also increased links between welfare and voluntary welfare-to-work programs, or even mandatory work in exchange for welfare payments.

1.2. The social policy dilemma

It is understandable why the idea of expanding family day care as an employment option for social assistance recipients would be attractive to politicians¹ and some proponents of community economic development. On the surface this strategy has considerable appeal because it promises to address simultaneously several important social and economic needs: the shortage of affordable child care, welfare 'dependency,' and the lack of jobs.

The job generation potential of child care is well documented.² The proposal also reflects growing consideration of the 'social economy' or 'third sector'³ as a way of compensating the diminishing role of government in social provision.

The international literature suggests that there are two broad approaches to welfare-to-work: the workfare approach which seeks rapid labour market entry usually into low-skilled, low-wage employment; and, the human resource approach which works in conjunction with other policies to make longer-term investments in skill and labour market development and generally leads to higher paying more secure jobs.4 The second type of approach has proven to be much more successful as a strategy for supporting the transition of welfare recipients into the labour market, preventing poverty and preventing a return to welfare.

There is potential to develop recipient skills and the remuneration, working conditions and quality of care in the child care sector. However, simply expanding home-based child care as it currently exists in Canada to provide a welfare-to-work employment option is unlikely to be satisfactory under either approach to welfare reform. While the work is demanding and requires a high level of skill, studies of the sector indicate that typical earnings are quite low -- too low to even replace welfare. That makes it an unattractive option particularly for workfare approaches oriented to rapid exits off welfare into the paid workforce with minimal or no investment in skills and labour market development.

Child care, antipoverty, and welfare reform experts remain sceptical of this particular approach. From a child care and development perspective, there are well-founded concerns about the quality of care in home-based child care. Evaluations studies conducted in both Canada and the United States have raised serious questions particularly concerning the unregulated care sector.5 To the extent that the poor tend to reside in distinct neighbourhoods, concerns have also been raised about the potential to further ghettoize low-income families and thereby undermine community cohesion.

The goal of this study is to assess family day care as both a sustaining employment option for welfare-to-work programs and a source of quality care. The first section reviews the literature on trends and perspectives in social welfare programs, labour markets and family child care in Europe. The following section examines welfare-to-work and child care in more detail in the United States. Welfare systems and labour market trends are then examined in Canada. The next section focuses on the occupational status of family day care as an employment option. This is followed with a discussion of community cohesion and findings from key-informant interviews and case studies from across Canada. The final section offers recommendations.

1.3. Methodology

The study starts from the premise that employing social assistance recipients in child care is inherently neither a good nor a bad idea. To qualify as a successful strategy, it would have to provide:

To ascertain the above the project undertook:

1.4 Definitions

For this study family day care or home child care refers to the non-parental care of small groups of young children by paid caregivers in a home setting.

A caregiver, provider, family day care provider or home child care provider refers to someone who cares for children, for pay, in their own home or the child's home. The caregiver is responsible for the safety and well being of the children in her care. Over 98% are women. In this study they are referred to as female.

Regulated family day care provides child care in the caregiver's home. There are two models of regulated family day care. Some jurisdictions directly license providers. Others license agencies who then contract with caregivers and provide monitoring and support according to legislated standards. In either case, most regulated family day care providers are self-employed. Regulations will include background checks on the provider; limits on the numbers and ages of the children in care; health, safety and nutrition standards and a program of learning activities.

Unregulated family day care provides child care in the caregiver's home. There are no regulations governing this care although legislation may limit the number of children who can be cared for at any one site without a license or permit. Unregulated providers are self-employed. They are sometimes referred to as 'babysitters' or 'informal' caregivers.

In-home care is the provision of child care in the child's home. The caregiver may live-in, or come to the home as required. Caregivers may be the employees of the parents or employed through an agency.

Government regulation of family day care providers is usually exclusive to care in the provider's home. Nannies, the commonly-used term for those who provide care in the child's home, usually operate outside child care legislation, although they are more likely to fall under employment standard and labour law.

Home Child Care - is used to refer to both family child care and in-home child care.

Social Assistance: also called welfare, refers to income security programs that use a "needs" or "means" test (a test of basic needs and resources) to determine eligibility for benefits. Welfare is the income program of last resort for people with little or no other income. In Canada welfare is mainly under provincial/territorial control, so there are 12 welfare systems. In European literature welfare may be referred to as minimum income schemes. In American literature welfare may be referred to as public assistance.

Workfare Approach - (a contraction of work for welfare) when first introduced workfare meant the performance of unpaid work for welfare benefits as a condition of eligibility. However, workfare has also come to mean requiring participation in any of a number of work-related activities as a condition of eligibility for social assistance. Workfare is also used to describe one of two general approaches to welfare reform. The workfare approach restricts eligibility, reduces social assistance benefits and seeks the shortest and most rapid route for recipients into the labour market. The second human resource approach to welfare-to-work maintains the social minimum established through welfare while investing in human and labour market development.

Endnotes:

1 Wallace, J., (September 28th 1999) "Back to School for Teen Moms", Toronto Sun. Harder, J., (May 14, 1995) "The dole patrol", Toronto Sun.

2 Cleveland, G., Krashinsky, M. (1998) "The benefits and costs of good child care: the economic rationale for public investment in young children",
Toronto: Childcare Resource and Research Unit. Human Resources Development Canada (1994) Social Security in Canada, Ottawa.

3 Putman, R. (Spring, 1993) "The Prosperous Community, Social Capital and Public Life" The American Prospect Number 13. Rifkin, J. (1995) The End of Work: The Decline of the Global Labour Force and the Dawn of the Post Market-Era, New York: G.P. Putnam.

4 Mitchell, A. (December 1997) "What is a Successful Welfare to Work Program?" Women and Welfare, Vol. 1, Issue 6, Toronto: Workfare Watch. Friedlander, D, Burtless, G. (1995) Five Years After: The Long-term Effect of Welfare-to-Work Programs, New York: Russell Sage Foundation. Torjman, S. (1996) Workfare: A Poor Law, Caledon Institute: Ottawa.

5 Galinsky, E. et al. (1994) The study of children in family child care and relative care, New York: Families and Work Institute. US News and World Report, (November 3, 1997) " Workfare Mary Poppins: Should welfare moms take care of other people's kids?", Doherty, Gillian, (1991) Quality Matters in Child Care, Huntsville, Ont. Jesmond Publishing.