An expert says Wisconsin’s child care market is ‘broken.’ One Manitowoc CEO is trying to help.

When Wisconsin Aluminum Foundry CEO Sachin Shivaram set out to help his employees with child care, he thought he had an idea of what he was getting himself into. 

It started when he found out that one of his employees, a single father, had to take his young daughter to a different home every day for child care.

“I felt disappointed in ourselves that our employees are not able to afford the best for their children,” Shivaram told WPR’s “Wisconsin Today.” “I felt like we needed to do something to help them, because these are the kids in our community.”

At first, Shivaram wanted his company to start its own child care facility. 

“We thought we were going to revolutionize child care,” Shivaram said. “We’re pretty good at making aluminum castings. And we thought, OK, we’ll just bring the same brain to child care.”

He wanted a facility where his employees could get quality early education for their kids at an affordable price. He also wanted to pay the teachers a living wage.

As many child care providers in Wisconsin have found, it’s extremely difficult to check all of those boxes. When they crunched the numbers, Shivaram found that tuition at their facility would run parents more than $40,000 a year.

“Nobody in our community can really afford to pay that amount of money,” Shivaram said.

He ended up settling on a different solution. Employees at Wisconsin Aluminum Foundry are now offered $400 per month towards child care, whether it’s at a licensed facility or with a relative or friend. That’s almost a 10 percent raise for full-time employees. But for Shivaram, the expense is worth it. 

“Our motive in this is to help make our work sustainable for our employees,” Shivaram said. “But it’s even more fundamentally … about the child’s experience.”

Left: CEO Sachin Shivaram, right, shows Wisconsin U.S. Sen. Tammy Baldwin around the Wisconsin Aluminum Foundry. Right: Wisconsin Aluminum Foundry employee Emily Kasbaum working in the foundry, finishing a casting. Kasbaum is one of many workers who takes advantage of the child care subsidy offered by her employer. Nicole Ruffolo/Wisconsin Aluminum Foundry

A ‘broken market‘

As Shivaram discovered, creating and sustaining an affordable child care facility in Wisconsin is a challenge. Ruth Schmidt, executive director of the Wisconsin Early Childhood Association, would go as far as to call it a “broken market.”

A recent survey conducted by the Institute for Research on Poverty found that there are more than 33,000 open spots at child care facilities despite a high demand for care.

“We know we have a shortage of child care because we cannot staff those positions in our state due to poor revenue streams that limit what they can pay to their teachers,” Schmidt told “Wisconsin Today.”

Right now, providers are simply not able to charge families what it costs to pay their employees livable wages, Schmidt says. Many families would be unable to afford it. 

Even with current wages, a recent survey conducted by the Wisconsin Department of Children and Families found that, as of 2023, only 50 percent of child care slots statewide were considered “affordable” compared to 75 percent in 2022. 

While employers like Shivaram can help families with rising costs, he says it’s not a sustainable solution. 

“The private sector, whether it’s through parental contributions or through companies, simply cannot sustain that level of spending,” Shivaram said.

Schmidt says the solution lies in government funding for child care in the state. Since the pandemic, Wisconsin has been able to offer subsidies to child care providers through the Child Care Counts Program, which is funded with federal dollars through the 2021 American Rescue Plan Act. But as that money began to run out in 2023, those subsidies dropped by 50 percent.

Despite efforts by Gov. Tony Evers and Democratic legislators to continue to fund Child Care Counts with state dollars, Republican lawmakers have resisted. The federal money is set to finally run out in June of 2025.

Schmidt said that without government assistance, neither parents nor employers like Shivaram will be able to afford to pay the tuition needed to keep child care centers open.

“We need a bold state investment in child care so that what employers are doing and what parents can do can actually turn the dial on what’s happening in this field right now,” Schmidt said.