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Minnesota launches major pay increase program for child-care providers

Minnesota Gov. Tim Walz announced Monday a $316 million fund to increase pay for child-care workers in an effort to address a startling workforce shortage.

The fund is set to be available to over 8,000 different child-care providers, addressing what the Governor said is one of the lowest-paying jobs requiring a high school diploma. Median pay for a child-care worker is currently around $14 per hour. The fund is designed to keep businesses operating and reduce turnover.

Clare Sanford, the Government Relations Chair of the Minnesota Child Care Association, said that the fund is a tremendous step forward in ensuring that child care is seen as a vital part of the economy.

“It's set the precedent for public funding to come in and say ‘This system isn't working, so we're going to invest in it,’” Sanford said. “This is an educational and economic underpinning for the entire economy, and it is worth investing in at a baseline level.”

Walz echoed that sentiment in a statement Monday, writing,”“Minnesota’s economy doesn’t work without child care providers. Without the dedicated care they provide, parents can’t work and children miss early learning opportunities critical to brain development.”

The fund is set to address a major staffing shortage in the industry, with nearly a quarter of Minnesota children living outside areas with reliable access to child care. The Great Start Compensation Support Payment Program, which was used to support child-care facilities during the COVID-19 pandemic, will be used once more to give grants to child-care providers without them needing to raise rates. The $316 million is set for the next two years, and will provide $130 million each year after that.

“On the other hand, it's also true to say it's a drop in the bucket, in terms of what the industry really needs to be thriving and be able to serve the needs of all Minnesota, children and family and the employers that depend on them,” Sanford said.

The fund is open from now until Oct. 25. Those applying must be licensed, certified, or registered in the state, be in good standing with the MN Department of Human Services or their Tribe, and be open and serving families as they apply. After receiving a grant, recipients will also be subject to random audits.

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