Rural Minnesota child care shortage leaves parents with few choices

There’s great excitement as Alissa Kretsch hides purple hearts around the playroom in her home day care. 

Kretsch has been a child care provider in New Ulm for more than a decade and runs the business from her home. Her services are in demand, and it’s only getting busier. 

“I get calls like at least three [times] a week of people not being able to find day care,” she said. “Some of them are even crying because they know they’re gonna lose their job. Also, I’ve heard that there’s some businesses that haven’t come to town because of lack of day care.”

The lack of child care in Minnesota’s rural areas is becoming critical. Outside the metro area more providers are exiting the field than younger providers entering, preventing parents from returning to work. 

A report by First Children’s Finance in June 2022 found 90 percent of children under age five in New Ulm have both parents working. Minnesota’s statewide average is 76 percent. New Ulm’s unemployment rate is also lower than average, further driving the need for child care providers. 

Heather Bregel, acting director of economic development in New Ulm, said the shortage of providers is a complex problem. City, county and business leaders have been working together to find solutions. This includes a new licensing model called the “pod model” where up to four family licensed providers can share space in the same building to operate their businesses. 

Bregel said she identified two buildings in New Ulm that might work for a pod model child care facility and work is progressing. However, this is only part of countering the lack of child care access. She also said median income isn’t as high in rural areas and the cost of day care compares to metro prices. 

“Parents in our area are paying a higher percentage of their income toward child care,” she said. “Some parents maybe can find child care, but can’t afford it. So they’re forced to stay home rather than work because it just doesn’t pay. Your whole paycheck is going to child care. It’s a very complicated problem and it’s going to take people to be creative and come up with solutions. Communities are kind of on their own to go it alone and figure it out.”

Child care shortages stretch across 80 counties in greater Minnesota, according to the Center for Rural Policy and Development. It estimates a shortage of more than 40,000 child care spots outside of the metro area. 

Employer challenge

New Ulm Medical Center President Toby Freier said child care availability regularly comes up in interviews with job candidates. The shortage affects his ability to retain and recruit medical professionals, often hearing stories of how far parents have to drive to find child care or even calling ahead to find a spot before pregnancy. 

“One of the biggest decisions you'll ever make in your life is starting a family,” Freier said. “And then the thing that hinges on [is] can you actually have someone to help kind from a child care standpoint as you pursue some other career opportunities or goal?”

That’s why when Sarah Sveine, now a mother of two in New Ulm, found out she was pregnant with her first child she immediately started searching for providers in town.

“I just started calling places everywhere, getting on their waiting lists,” Sveine said. “That was December of 2019 that I called pretty much every single provider in this city.”

She debated taking her child to her mother-in-law in Mankato where she worked, or drive a further 15 miles down to Sleepy Eye. But then her father-in-law, who lives in New Ulm, volunteered to watch his grandchild. Despite calling monthly, Sveine couldn’t get into a day care until two years later. 

“I didn’t get to say whether I wanted my kids in a center or in-home,” she said. “I didn’t get to say, ‘I don’t really like the way that my provider disciplines, or the way that my provider does this or that.’ I don’t get to have that option for my children, and that’s probably the most frustrating part.”

A ripple effect

For years, Minnesota has experienced a decline in child care provider numbers. Experts say there isn’t one specific reason driving the drop. Rather it’s a complex web of factors including high start-up costs, low wages and burn out. 

According to a report by the Center for Rural Policy and Development while total child care center capacity is on an upward trend statewide, the growth is only within the state’s most populated counties. More sparsely populated rural areas are less able to sustain child care centers and struggle to maintain programs. 

Providers said they need extra funding, and wage support to compete in recruitment and retention, and more understanding on the educational importance of child care. Minnesota Department of Human Services Assistant Commissioner for Children and Family Services Tikki Brown said there needs to be change.  

“It really, truly impacts every single person whether you have a child or not,” Brown said. “It’s just that there is a ripple effect.”

Brown said she was optimistic the state is moving in a direction to better support child care providers and addressing existing disparities for families in need of child care. But, she acknowledged that won’t happen overnight. 

For rural Minnesota, family child care providers are the most common form of child care available to rural communities. Child care programs are more difficult to maintain — especially centers — and have higher overhead costs compared to family child care. A center needs to enroll enough children and charge higher rates to cover costs. 

Legislators are currently debating ways to support child care providers but it’s likely the final bill won’t come together until the end of the session. 

Greater Minnesota Partnership Executive Director Scott McMahon said legislators need to recognize the different experiences and challenges of accessing child care in rural and metro areas. 

“And make sure that the metro has the tools they need to address their child care problem and that Greater Minnesota has the tools that they need to address their child care problems,” McMahon said. “It’s not going to be a one tool that fits all kinds of solutions. We have to be pretty precise and pretty strategic in how we move forward.”

Love outweighs cons

Back in New Ulm, Alissa Kretsch cooks lunch for the kids. 

She considered quitting child care because she ran out of space in her house. Then, she learned the city planned to launch child care in a pod model — multiple family child care providers operating independently under the same roof while sharing spaces and resources. 

Kretsch immediately jumped at the opportunity to move her business from her house. 

“Hopefully, maybe this pod will catch on and then there’ll be more,” she said. “I don’t know. I don’t think a lot of people want the house anymore.”

Kretsch said it’s her love for caring for children that keeps her in the job. It’s hard work, but she said she would willingly make the choice to be a provider all over again.