Orange County is investing $75K to jump-start a childcare incubator. Will it work?

First 5 Orange County was awarded $75,000 from the county to jump-start a childcare business incubator. Officials say the money is badly needed, but it’s unclear how the investment will address the ongoing provider crises.

Around one-in-eight infants and toddlers have access to licensed childcare in the county, according to a recent study from First 5.

O.C. Supervisor Vicente Sarmiento, who issued the funds last month, said the money will boost support for childcare businesses.

“We must address the shortage of spots and assist local entrepreneurs in our district with the necessary training and assistance to successfully create these additional businesses to serve the needs of our residents,” Sarmiento said in a statement.

Leaders at the agency, which distributes funds generated from California’s tobacco tax, said the incubator aims to support the needs of working families, but the childcare crisis is a systemic issue.

Why it matters

A child’s early years are also critical for brain development, Goll added. Their brains are exploding with new things and researchers have shown just how much a child’s early experiences can affect their health and behavior later in life.

In Orange County, at least 68% of children need childcare, nearly on par with the 74% of kids statewide who need care, according to Kids Data. Those unmet needs can mostly be attributed to the exorbitant costs of childcare.

Kim Goll, CEO of First 5 Orange County, said the demand for childcare is “woefully” underserved in the region.

“We have one licensed childcare slot for every eight kids that we have,” Goll told LAist. “Stress and strain on parents and the lack of quality and accessibility is going to be a problem when we think about the impact of the child, but [also] when we think about the impact on the economy overall.”

Details on the incubator 

The incubator program will give entrepreneurs support in opening, stabilizing and expanding their childcare businesses.

Future childcare providers who join the program will spend two months building their knowledge of business basics, early child development and how to run a childcare program.

Those who finish the training and successfully apply for their childcare license will receive a stipend.

For childcare providers, economics are a hurdle, Goll said, even with financial assistance.

“Subsidized rates from the state of California are not competitive, so even if you want to run a subsidized program, it's very hard to pay your staff enough to keep them,” Goll said. “Rates often keep the workers within child care living at or below poverty, so it's not a really attractive workforce environment.”

Is the incubator program the solution? 

It’s complicated. Goll said that while the incubator program is aimed at addressing the needs of working families and their children, the childcare issue is a looming systemic one.

“Even if you can afford an apartment, but you can't afford childcare, or you're toggling between those two, you've upended both,” Goll said.

The reality is families are stressed out, Goll added.

“If we want people to be able to afford housing, they have to be able to get to work. Well, if you're a parent, your ability to get to work is significantly impacted by where you place your child, and most of our workforce are parents,” Goll said. “We have to solve this problem if we want to solve the rest of the problems.”

Interested applicants can request more information here.