The data behind the problem
One of the event speakers was Neil Harrington. He’s the director of policy and research at NC Child, a nonprofit child advocacy organization. He began by outlining a significant problem.
“The cost of child care nationally has been rising rapidly for decades. It's more than doubled since 2000, and it's risen much faster than the cost of other household essentials, like housing, groceries, or all items in the Consumer Price Index,” he told the crowd.
On average, child care workers in the Wilmington area are paid less than other hourly workers: $14.58 an hour compared to $16.08 for retail and sales and $20.50 for fast food workers.
Harrington said NC Child estimates that unresolved issues in child care are costing New Hanover County $79 million a year. The bulk of that loss stems from industry turnover and absenteeism ($61 million), followed by a $19 million reduction in state and local tax revenues.
NC Child also finds that only half of children under the age of six with working parents are enrolled in licensed care. That’s because, Harrington said, there aren’t as many slots available due to workforce shortages and other factors that limit the number of children that providers can serve at one time.
Leanna Martin is an early childhood education policy analyst who was also a presenter. She works with Harrington at NC Child and said that because tuition paid by families alone doesn’t cover the cost of doing business, it’s a constant struggle for care providers.
“Tuition doesn't offset the cost of care. So it's a puzzle, monthly, quarterly, and annually, trying to see what types of funding you can find so that you can at least break even,” she said during the event.
Martin added that most providers' profit margins are too low. In their ‘Building Blocks and Bottom Lines’ report, they looked at the issue in North Carolina.
“The average profit margin was 5.8%. To put this into context, an average profit margin, or a good profit margin, is about 20%, an average one is about 10%, and a low one is considered 5% or less,” she said.
According to Martin, those margins prevent providers from accessing loans or investing in capital projects to expand their services.
Unfortunately, Martin said they sometimes have to make tough choices, such as which meals to provide.
“‘Okay, so what is our least expensive meal? And how many times can we put that on the menu for April without parents starting to question why we've had that several times this month?” she said
Since February 2025, NC Child reports that New Hanover County has experienced a 76-slot reduction and that three area programs have closed. There are also 472 children on the waiting list to access child care subsidies.
“So what happens is, when we're losing these slots for private paying parents, and we have 472 children and families on our subsidy wait list, we're losing the ability to really catalyze the workforce in the way that we are hoping for,” Martin said.
Policies that businesses say would help
After data presentations by Harrington and Martin, there was a panel of business leaders who spoke about their issues with child care. Amber Rogers, a childcare provider, was on the panel and is the founder and CEO of Palmetto Preschool. She owns and operates four locations in the Carolinas, two of which are in New Hanover County.
She shared her insight into the financial issues affecting her bottom line with the audience. For one, she said, state subsidy reimbursement rates are not where they need them to be. A bipartisan state task force convened by Governor Josh Stein is investigating ways to increase these rates.
And when they are reimbursed, it’s a 60-day lag.
“When you've already run three payroll cycles, and payroll is 50% of every dollar that comes in, if not higher, and so that's asking child care providers to carry quite a burden when you're asking them to wait 60 days,” she said.
Rogers added that she’d also change how reimbursements are made, saying the state should fund them based on enrollment, not attendance.
“What that means is it provides budget instability because you are affected in your income based on a child being sick for a week, or a family taking a vacation, if that family is receiving subsidy pay, and you don't know that in advance,” she said.
Audience member Autumn Bishop, the chief early education program officer for One Place in Onslow County, pointed out the issue with funding child care in this way.
“That would be like having a gym, and people only have to pay on the days that they're there; that you can't operate in that way,” Bishop said.
Another onerous item on Rogers’ balance sheet is the rising costs of liability insurance.
“Our liability rates have quadrupled in a little under five years, and so that's just not a sustainable model for them to keep charging that, and I feel blessed that we haven't had trouble even accessing it, just paying for it,” she said.
She’s advocating for the state to change tort law, which she sees as a way to reduce these costs by limiting liability for centers.
She’d also like to see child care teacher supplements increase. Rogers said recent supplemental state funding helped her employees in the short term.
“It was a great initiative, but it did not achieve its purpose long-term, particularly because subsidy rates and parent pay rates did not keep up with the money that came in to supplement the teachers' pay. So even though rates went up when the stipend went away, the rates had not gone up enough to offset [it] going away,” Rogers said.
Another panel member was Lisa Leath, the chief people officer at Vantaca Software, headquartered in Wilmington. She noted that employers can offer a pre-tax deduction of up to $5,000, allowing employees to contribute those funds to childcare expenses without paying taxes on them. It can help, but Leath noted — rather pointedly — that it’s not enough. She said that the amount should be closer to $12,000.
Leath previously served as head of human resources at Alchemy and described what policies were in place there.
“If employees earned under a certain amount, they would subsidize child care. It was a redline item, but it was helpful. So if you can do it, it’s an option,” Leath said.
She also mentioned that while the company is okay with children sometimes being visible on internal Internet calls, it’s not professional with the clients they serve; hence the need for consistent childcare.
Future programming, advocacy
The Wilmington Chamber of Commerce also supported the event along with NC Child and ExCEL NC. Chamber President and CEO Natalie English said it’s not always about asking for more money, but about specific policy changes.
“I'm not a proponent for going with my hand out to the state legislature every year. I'm not. I'm not because, on the one hand, we also say we pay too much taxes. So I'm not going to be in the front of the line of always saying we need more money,” she said. “But I know some people are, but when it's appropriate, yes, more money, but we have to figure that balance out. But I am a proponent for changing the policies that impact the cost.”
One such policy, English noted, was NC TriShare, a state pilot program in which child care costs are split a third among the state, the company, and the parent or guardian.
The former director of New Hanover County Smart Start, Jane Morrow, who recently announced her retirement, was in the audience. She told the group that companies must enroll (none thus far have enrolled in New Hanover County). Additionally, only those employees earning 185% to 300% of the federal poverty level qualify.
“In Moore County, the hospital was very interested, but most of its staff earned too much. But then a nursing home became very interested, because most of their staff were in that salary range,” Morrow said.
Last week, The Endowment announced that it would contract with NC Child to perform an early childhood system landscape analysis. WHQR asked The Endowment how much NC Child’s contract was for, and Amber Rogerson, the communications director, said they won't be releasing that information.
"As a practice, out of respect for our vendors and partners, and to protect The Endowment and the community we serve, we don’t share vendor payment details. Doing so could distort future pricing or prompt competitive adjustments from other vendors, which could impact our ability to secure fair and independent bids," she wrote.
The Endowment also recently awarded a similar contract to UNC-Chapel Hill for a landscape analysis of the entrepreneurial ecosystem, which is subject to inspection because it's a government entity. WHQR has since put in a request for that information.
Prior reporting on child care
- NC Child unveils data on state of children in the Cape Fear region
- Experts and advocates say the child care industry needs more public support to survive
- Grant funds substitute staffing software for NHC early childcare facilities
- NHC Smart Start Survey shows why some families struggle to get their kids into preschool
