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[We make this transcript available for your convenience and to increase the accessibility of our content. The transcript was generated by software and was slightly edited for clarity. If you are able to, we encourage you to listen to the recording.]

 

Juan Carlos Ordóñez (host): Less than a year from now, thousands of working families in Oregon could find themselves in a serious bind. That’s because Oregon’s program of subsidized childcare employment related daycare is on course to run out of money in less than a year.

In January 2027, if employment related daycare, known by its acronym ERDC, were to run out of funds, families would suddenly find themselves without childcare, making it difficult or impossible for the parents to work to earn the money needed to pay the rent and other bills. This would be a devastating blow to families and the state, according to today’s guests Marchel Kaleikini and Ivy Major-McDowall, who are with the organization For All Families Oregon.

For All Families Oregon is a grassroots organization that believes the economy can and must do more to support working families through policies like affordable childcare.

In today’s episode, Marchel and Ivy discuss the state of child care in Oregon, as well as the cloud hanging over employment related daycare. But before we get to our conversation with Marchel and Ivy, I want to share a story that illustrates just how crucial childcare is for families, how it can mean the difference between thriving and being in a state of crisis.

This is the story of Natalie Kiyah, a single mother who lives in Portland.

Natalie:  So in 2018, I came to a place where my marriage was ending and I had two two year olds. When we were separating, I realized I needed childcare. There’s no way I can work while having two toddlers. I at that time had my photography business.

And so, someone mentioned in passing ERDC, which I had never heard of, and they said basically it’s food stamps, but for childcare. And I was like, oh, cool. So I applied for that. I qualified and gained access nearly immediately. I called around multiple different daycares interviewing them, and a lot of daycares that I called took ERDC. So I really got to choose where they went. And they started pretty quickly after.

In 2023. I was a single mom at the time with three boys, and I was already accessing ERDC for my three boys for afterschool care and then daycare full time for my three year old at the time. And my business that I had been building was doing really well. I was like, I was doing well.

I was like, oh my gosh. Like, I might be on the way to like buying a house one day.

Juan Carlos: The success of her business, however, came at a huge price.

Natalie: I lost ERDC because my revenue for my business income was over the limit. I was working hard. I was working consistently, I was doing great. And then I lost a very critical support and I suddenly couldn’t pay anything.

Like it was so devastating. At that time when I lost ERDC, it covered the cost of childcare and the cost of my childcare was equivalent, if not more than my rent. So I essentially had two rents and I couldn’t afford it . I ended up trying to make it work. I tried to work from home with my toddler, and then the after school hours.

There’s no working with kids, I was paying out of pocket for babysitters when I could, but I just ended up using my credit card for like rent, for daycare. And I ended up pulling my son out of daycare, and I ended up having to make the painful decision of moving us into a family homeless shelter, because I could not afford life.

I couldn’t afford daycare, I couldn’t afford to work.

Juan Carlos: Natalie couldn’t continue running her business while living in the family shelter. Without income, she once again applied for employment related daycare. She was able to get back on the program. This allowed her to apply and land a job at the Oregon Food Bank, where she works today.

Natalie: A typical work week or work day in my life is jam packed. I wake up very early at 6 a.m. with these kids. They wake up early. I get them all ready for school. Lunch is packed, breakfast ate. Get out the door. As soon as they’re out the door, I start my workday. The first hour from 8 to 9, I’m actually doing my side business photography stuff or writing or whatever sort of side, well, I have lots of side gigs, but, you know, there’s that.

From 9 to 5. I am then doing my Oregon Food Bank work, which is a lot. It’s a lot. I love my work at Oregon Food Bank, but it is a lot and it is nonstop. Some days I don’t get a lunch break like it is nonstop.

Juan Carlos: Natalie’s back on her feet, but the looming threat to employment related daycare, the possibility that the program will run out of money is a source of deep worry.

Natalie: Honestly, my brain goes blank into, like, some disassociation trauma response. Because the last time I lost ERDC, I landed in a homeless shelter. I worked very hard to get this house, like, so hard.

And if I don’t have childcare, I cannot work full time. Childcare like it is the foundation of our economy.

Juan Carlos: Natalie is not alone. Thousands of Oregon families are at risk of losing their childcare if employment related daycare runs out of money, as Marchel and Ivy explained. Marchel is the political director at For All Families Oregon. Ivy is the organization’s care advocacy manager. Here’s our conversation. Ivy, Marchel, welcome to Policy for the People.

Ivy: Thank you for having us.

Juan Carlos: Thanks. So today we’re going to talk about the crisis that’s brewing in employment related daycare. And this is a state program that helps low income families afford childcare. Before we get into that, though, I’d like to talk more generally about the state of child care in Oregon. How would you summarize the situation when it comes to child care in our state?

Ivy:  think the best way to describe it is childcare costs a lot. It’s unaffordable and really hard to find. Even though we know, it’s great to have so parents can go to work. It supports our economy and especially though being able to have kids join a childcare or center and get quality care is so helpful in their development and supporting them later in life.

Juan Carlos: You mentioned the cost of childcare. Can you give us a sense of just how much it costs for families? How big a strain does it put on family budgets?

Ivy: It’s quite expensive. So it can cost up to $20 to $24,000 a year, which if you can believe, is even more than some of our own Oregon public university tuitions.

It’s a lot of money, $20 to $24,000 a year. And that can vary too. Right. What if your kid is younger? Infant and toddler care is more expensive. What if you are an at home base childcare or a center base. And then also if you live in a more expensive city in Oregon, costs can be even more potentially than the $20,000.

Juan Carlos: You were talking about just how much of a bite the cost of childcare takes from family budgets. And so it seems like parents are caught in this awful dynamic where they need childcare to go to work. And yet childcare is really expensive, taking a lot of the money that they make. I wonder if you can describe what that means for families.

Ivy: With even just doing that math, right, it just doesn’t work for working families to afford childcare, go to work. And so many times it’s having a choice of like, can I really afford to live and work in Portland, or other parts of Oregon? And having to choose between rent or putting food on the table, or paying for quality childcare?

Marchel: Yes, to everything Ivy said.  And I think what we are hearing most from our base, and what I had to do until my kids went into elementary school, is patching child care in whatever capacity that means to make it work. Right. And so for some folks, for some families, it’s one parent working the day shift, the other parent working overnights. There is the need of like, okay, which parent will work?

And be able to have the flexibility to pick up their child and take them to another, family friend or neighbor for after school care. And I mean, with the cost of care, even part time, care is just beginning to be really unaffordable for parents. We see a lot of gig workers, people who are doing, we hear, are doing like DoorDash delivery or Instacart, things that are friendly to having your child with you, instead of needing to pay for care.

Juan Carlos: And to add to the complexity of the issue or the challenges that present themselves in the space of childcare, is that even though it’s so expensive for parents, the profession doesn’t pay very much. I wonder if you can talk about the wages and working conditions that workers in the childcare industry face.

Ivy: Yeah, I think on average statewide, a child care worker makes around $35,000 a year, which really I think shows how much we undervalue care work historically. Even though the majority of childcare workers are female and women of color, so they’re not making a lot, and they have to make that choice because as running a business like childcare, they need to be able to do the balance of what can they afford to staff and how many kids can they take care of, but also to make it at a reasonable price.

So then working parents can then use their services and be their clients. And so they’re always running that balance. Even though we’re seeing such higher costs for things like materials, learning materials, but then also like food to provide, the cost keeps rising up but they have to keep some of their salary down as a way to be affordable for the parents they provide service to and kids.

Marchel: The only thing I would add is, you know, providing child care because of the low wages, it often has high turnover. And we see a lot of childcare providers and early learning folks who leave that workforce to go on to higher education, because it pays more. There’s benefits, right? When we think of childcare, we think unlimited time, with your child care worker will not get sick.

And that’s not true. There’s more germs than ever in a childcare place. And, you know, I think for a lot of the parents that we talk to, their journey into starting their childcare business was frankly, because there was no other choice for them to otherwise stay at home. And so why not offer that to the rest of the community?

So you’re not talking about large investors who have overhead, right? These are people who are doing the work because they see the need or they  had the need themselves and are filling the gap. So we actually have the largest workforce shortage in childcare workers, across the state and really need to invest in that industry, frankly.

Juan Carlos: That’s a good sort of segue for the main issue that I wanted to talk about today, which is employment related daycare, which is a state subsidized program. And I wonder if you can talk about what the purpose of employment related daycare is, which is also known by its acronym, ERDC.

Ivy: Yeah. So it’s our Oregon’s childcare assistant program. So it helps support families who, at their income, are needing extra support so they can afford childcare. And so we currently know that there are 12,000 families, currently active and connected to a provider through ERDC and using that. And there’s over, I think, 4,000 childcare providers across Oregon who also accept ERDC payments, and sustain their businesses as well.

And I think too, we know right now the average pay our families who are on ERDC need to make is just $10 to the program, which is so affordable. You’re able to be able to access this great program because the state is funding it. You just pay $10 for it.

And then your kids, probably multiple of them, are able to then get that quality care for $10 out of the household’s pocket.

Juan Carlos: What families does employment related daycare serve?

Marchel:  That’s a great question because the assumption would be people who are working since it’s employment related daycare. But we made some big changes in the state legislature in 2021, where we prioritized survivors of domestic violence, to jump the waitlist and get connected to care immediately.

We also prioritize children who are in the foster system or currently going through that process. And then we also expanded the program to include students and TANF recipients, cash assistance families. And that’s because all of these different agencies housed a child care program. And as a parent, you needed to call all the different agencies to figure out what your options were.

And that didn’t make sense. And that doesn’t make it easy for parents who are already balancing work and five different schedules. So we made the Department of Early Learning and Care. And so not only does it include and prioritize those families, the income limits are actually pretty feasible. You have to make within the 200% poverty level.

But an example is for a family of four, that gross income limit is around $5,300. And so looking at Oregon’s median wage, it covers so many families that are looking for care. And that’s part of the reason why we have over 15,000 families on the waitlist, hoping that this program stays intact and funded.

Juan Carlos: And that figure that you mentioned, that’s a monthly figure?

Marchel: Yes, that’s a monthly figure.

Juan Carlos: Yeah, I can see that. It would cover quite a bit of people.

Marchel: Can I share more about some of those changes that I think are key though to also explaining how did we make it a $10 copay? And that’s because when those changes happened, we capped those co-pays at 7% of a household income.

And you might think, oh my gosh, $10 is so low. But when you look at the cost of care, that’s now more than the cost of rent, right? And so when you look at how a family’s budget after taxes is split up, this really allows the family to build their wealth and ultimately, hopefully get off of the program.

Something that I  was really excited about is that exit limit also increased. Right. So we talked about a family of four having to make around $4,300. When they are exiting the program, when they submit their pay stubs for proof of employment, they now can make up to $9,000 a month when exiting.

And so it really encourages families to pursue their career or, you know, take that promotion. Whereas prior to that, people were really afraid to grow in their career because when, you know, you make $200 extra a month and you’re over that limit. All of a sudden you’re stuck, you’re kicked off the program and stuck with a $4,000 bill that you have to pay for.

The other thing that I think was really important for childcare providers is they were paid based on enrollment instead of attendance, so that as a childcare business, they have that predictable, stable funding because kids get sick, kids also go on vacation. And that should not prohibit a child care provider from being paid because the cost of rent and your utilities, they don’t change because a kiddo is sick.

And the last thing that I wanted to mention is the program also allowed for extended hours so that families who are working those nontraditional shifts or longer days, could still use the program. And it will not be such, like 9 to 5, just unrealistic, time frame.

Juan Carlos:  For All Families Oregon has said that employment related daycare is on the brink. Can you talk about the funding crisis that ERDC currently faces and how we got here?

Ivy: We know because we have been talking to our state agency, the Department of Early Learning and Care, and they had reported to the state legislature in November that they are seeing a shortfall for the ERDC program. That had also happened because when they were approved their budget for 2025 through 2027, it did not meet current service level.

So we knew as advocates that this was going to be a problem. And here it comes straight at our door. And so DELC has said it’s estimated to be a $73 to $88 million shortfall in the program as it’s at its current caseload of serving 12,000 families. That’s on average 24,000 kids statewide running out of money by January 2027. So next year.

Juan Carlos: So what happens if the program runs out of money a year from now?

Marchel:  It literally means no childcare. Families won’t be able to use their subsidy. Childcare small businesses will have to close. Right. Families right now are paying $10. You take away this subsidy and that average cost is paying another rent bill.

The math will never math for our families on ERDC. So it’ll be catastrophic to Oregon’s economy.

Ivy: We have from our own base who has submitted testimony in support of ERDC. A lot of them are rural providers who depend on or are able to run their small childcare business because of ERDC slots. So if we take those slots away, that just puts the childcare businesses in such a huge pinch, they may have to close their doors.

And that’s just, even if like, funding, for example, returns the next year, that’s possibly making a business close now in this year that we can possibly not recover from.

Juan Carlos: And just to see if I’m understanding it clearly, if the program runs out of money in January 2027, does that mean that the 12,000 families would lose their subsidy?

 Ivy: Yes, absolutely. Or it’s also the policy choice for our state legislators to just cut off or reduce the caseload as well that of the families currently served. So either way, thousands of Oregon families  could lose their access to this childcare assistance that’s so vital for them. And that’s the policy choice that legislators are making if they don’t fund this.

Juan Carlos: So we’re speaking on the eve of the start of the 2026 Oregon legislative session. What are you asking Oregon lawmakers to do with respect to this funding crisis that ERDC is facing?

Marchel: Our ask to lawmakers is to be bold and to disconnect from the federal tax code. And we don’t need millionaires and corporations to have doubled their loopholes in their taxes.

And if we do that, that gives us, you know, almost $400 million in revenue, depending on which codes we disconnect from. And that literally will not just cover the ERDC shortfall, but really support other agencies that are struggling because of the federal government’s attacks on Snap and Medicaid. The other thing that I would uplift to lawmakers is the time they can step up in their leadership to fund ERDC during a time when Headstart is being federally attacked.

Preschool for All is also under attack from the wealthy folks in Portland. And so that return on investment of child care is $4 to $16 for every $1 we invest. So it seems like it should be a no brainer, but it starts with that choice to prioritize funding this program and making sure that no families are cut.

Juan Carlos: I wonder if you can explain a little bit, walk us through the issue of disconnect. It’s a bit of a complicated topic, perhaps, as tax issues tend to be, but I wonder if you could break it down for the listeners, like how an ordinary person might understand what this is all about.

Marchel: I can try to tackle this. I’ve been having conversations with my ten and 13 year old about this. So the best way that I could explain it is, you know, I was saying Trump and his administration, they created tax breaks for his wealthy friends and corporations. Oregon is one of those states that copies and pieces almost exactly what those federal tax breaks look like.

So if you are wealthy and you do business in Oregon, or you have a corporation here, or you are wealthy and you live here, you get double the tax break and double the loophole, or we can join almost every other state in the country by saying we actually don’t want the same tax breaks and loopholes for wealthy people and corporations who pay their CEO millions of dollars.

We’re going to have them pay the exact same tax rate that they’ve been paying every single year. And just by doing that, we have so much more money to support our roads, our hospitals, our schools, child care, Oregon Health Plan and all the things that are so important to our community and our neighbors. And you know what my kids ‘responses are to that?

It’s like, why haven’t they done that yet?

Juan Carlos: As we wrap up, I wonder if you have any final thoughts that you’d like to share regarding the state of child care here in Oregon and in particular, employment related daycare, and perhaps kind of what the way forward is?

Marchel: I wouldn’t be in my position if I wasn’t an organizer first. And at heart, to really welcome everyone who’s listening to join the fight. You know, our team is in the building (Salem capitol) all the time, and we hear from lawmakers that they need to hear from their constituents on just what we experience living our day to day lives. And all of these issues are interconnected. If I have to pay my childcare bill, I can’t put the same amount of groceries in my refrigerator.

I might not be able to pay rent. If transportation is cut, I might not have a ride to my job and need to start over there. There’s you know, at the end of the day, it is the working class and working families that are the core of our communities that are under attack from these really wealthy folks.

And we need to really stop fighting each other and come together. So get involved with our organization or organizations that fight for issues that you care about, meet new people and be like, oh my gosh, we are actually all struggling with the same thing together. And it’s not because we suck, it’s because of the policy choices. So get involved. Let’s take action.

Juan Carlos: And Ivy, if folks want to get in touch with For All Families Oregon, how can they get in touch? And also, if you have any final thoughts you want to share with us, please go ahead.

Ivy: Definitely follow For All Families Oregon on Instagram. We also have a Facebook, but definitely Instagram is more active, that has our registration link.

That’s how you can sign up and volunteer with us. Also, you can  reach out to me specifically, Ivy@forallfamilies.org. I would love to get you involved as well. Because yeah, all the time I am meeting with these legislators and they’re tired of seeing my face, and they need to hear from their own constituents.

Find out who is your state rep and state senator or call them, email them, or also join us in person in Salem. Because there’s a lot of ways you can take action now. And we’d love for you to join us.

Juan Carlos:  Well, Ivy and Marchel, thank you so much. Thanks for your comments. And thank you for listening to Policy for the People. We will see you next time.