Andrea Peña tries not to think about how little she earns at the childcare business she runs out of her Bronx home.
“If I go through my math, I will get depressed,” said Peña, 50.
Her program is typically fully enrolled. Still, her bills stack up quickly — mortgage, utilities, insurance, payroll. By the end of the month, she doesn’t even earn minimum wage.
A review of Peña’s largest monthly expenses shows she’s making about $9.50 an hour, or $500 a week. That’s counting only the 50 hours her program is open during the week, and doesn’t factor in her weekend runs to BJs to buy food, nighttime meal prep, evening clean-up and the administrative work that piles up during the week.
“Going through my budget, it’s like my stomach aches. It hurts, because I'm not making any money,” she said. “ I love my business. I love to work with kids, and I love to be part of that first step in the kids, that base.”
Peña is among more than 6,000 New York City family childcare providers who care for kids in their homes. Their programs are an essential part of Mayor Zohran Mamdani’s plan to build a universal childcare system to alleviate high costs for parents. But despite the hefty bills New York families pay for childcare, home-based providers earn a median wage of $6 an hour, according to a report by The New School’s Center for New York City Affairs. Childcare advocates say that without serious reforms to how providers are compensated, these small businesses could be forced to close, undermining the city’s planned expansion.
“This is something that is cumulative after many, many, many years of disinvestment, and that's why it needs to be front and center for a plan towards universal childcare,” said Lauren Melodia, director of economic and fiscal policies at The Center for New York City Affairs.
Peña’s story is a “perfect example of a provider checking all the boxes, fully enrolled, has staff, has developed a sophisticated small business, and is just not able to earn a living wage because the private market rates for childcare just can't cover the full cost,” Melodia said.
Andrea Peña's childcare center in Pelham Bay.
Childcare providers are paid different rates by different sources. Some parents pay their kids' tuition directly, while others pay through vouchers, which are mostly funded by the state. In other cases, the city contracts providers for its free preschool programs and covers the costs.
Providers can have a mix of all these payments for their roster of children, though family providers more often rely on vouchers and are not typically contracting with the city.
New York City’s efforts to expand free childcare options over the last decade have further fractured the system, leaving providers earning differently depending on whether they care for kids in a home, a school or a commercial space.
Home-based providers like Peña, who operate programs in their homes and are overwhelmingly women of color, are often at the bottom of that pay scale.
What comes in
Peña has been an early childhood educator for nearly three decades and runs Lovely Nest Group Family Daycare in Pelham Bay. Her program is licensed for 14 kids and she’s usually fully enrolled with a mix of babies, toddlers and older kids for after school.
Most of her kids pay through state vouchers, with weekly rates set at $400 or $350 depending on the child's age. Kids in after school pay $40 a week. While she’s tried to charge parents who don’t qualify for a voucher more than her standard rates, they can’t afford it and ask for even lower rates.
While Peña can’t always afford to accommodate some parents’ requests, she often does.
“If I don't take the baby, maybe [the mom] has to lose her job, so what's she going to do? I think God somehow will bless me for the hundred extra dollars that I'm not getting,” Peña said.
She estimates she gets about $15,000 a month in tuition on an average month.
Andrea Peña at her childcare center in Pelham Bay.
Ben Parisi, a coordinating member of Providers Organized for Power, a coalition of community and labor organizations advocating for better wages, said the way the state and city reimburse providers is flawed and doesn’t account for what it actually costs to provide care or a salary for the provider.
“ They're just scraping by on what's left over after the costs are accounted for,” Parisi said. “They're not really wages.”
While Gov. Kathy Hochul recently increased the state’s voucher reimbursement rates, it still isn’t enough to account for wages for providers and basic benefits like health care, he said. The Mamdani administration also increased its payments to contracted providers.
What goes out
As she sat in her backyard, surrounded by water tables and gardening beds that she uses for her kids, Peña rattled off her expenses for the month of June.
One of her biggest costs is paying her two full-time employees and one part-time employee (who was once a child in her daycare). It’s critical that she maintain the proper ratios of children to adults and also ensure the kids have enough to eat and don’t get bored.
Her employees earn the city’s minimum wage at $17 an hour — more than she does. Peña’s take home pay after deducting worker’s compensation, liability insurance, commercial insurance, gas, water, electric, internet and her accountant’s fees rounds up to $9.50 an hour.
And Peña can only pay herself if her program remains fully enrolled and parents pay on time and her electricity bill doesn’t surge during hotter months.
But there are months when a payment comes late, or she has to fix the air conditioning, or when her electricity bill shoots up to $1,000 due to a heat wave.
Andrea Peña at her childcare center in Pelham Bay.
Gothamist tallied the largest expenses — such as her $2,700 mortgage payment, since she runs her business out of her home — but didn’t factor in the occasional costs of cleaning supplies, toys and books for kids, furniture or capital improvements, such as when Peña paints the rooms, or the stairs leading outside need repair.
The expenses also don’t include regular payments for her $60,000 small business loan she took out during the pandemic to make ends meet, when she closed down her business and lost her enrollment.
“If you actually consider all of the additional hours that they're working, paperwork, cleaning, food prep, curriculum development, all that kind of stuff, the hourly wage is even lower,” Melodia said.
“This is a field that's always been undervalued and underpaid.”
Joe Hong contributed to this article.
