Excessive Child Care Regulations Benefit Big Businesses but Hurt the Small Ones

One of the paradoxes of American politics is that our friends on the left (and even many on the right) are generally supportive of expansive regulatory regimes even as they rail against the evils of big business.

This is a paradox because one way businesses deal with complicated and costly regulations is through consolidation. The economies of scale better equip a company to deal with often byzantine compliance mazes they’re tasked with running. By promoting bigger and more muscular bureaucracies, we encourage bigger and more muscular business.

Case in point, consider this letter to the editor in the Fargo Forum today from a man whose wife runs a small business. An in-home daycare, specifically. His whole letter is worth your time to read, but consider this excerpt:

We continue to hear about the shortage of quality child care in our state. One article told of the opening of a large day care center in Grand Forks with room for 140 children. My experience is that the best setting for little children is not the large center with multiple caregivers—and high turnover—but home day cares with one, or at most two, caregivers, and no more than 12 children.

My wife, Mary, has run such a home day care for about 30 years now. It’s a wonderful environment, and we believe, the next-best thing to being home with mom or dad. The problem is that many home day care providers have been and are being driven to quit because of the continual increase in requirements and regulations.

A certain level of regulation of childcare businesses is prudent. We want kids to be safe. We want to protect parents from fraudulent, negligent, or, worst of all, abusive care providers. But there is a point at which regulations go too far, micromanaging a willing-seller-willing-buyer relationship to the detriment of all involved.

The author of the letter, Steve Berntson, lists some of the problems he’s noticed. For my part, I’d note that not very long ago the City of Fargo was pushing regulations on what kind of juice kids could be served, how much they could drink, and how it could be served to them.

Is that something parents need the government to do for them? Aren’t dietary concerns something parents and care providers can work out among themselves?

The problem, as Mr. Berntson notes, is that each new regulation that’s put on the back of daycare providers puts pressure on them to either close or consolidate into larger daycare providers.

To be sure, there’s nothing inherently wrong with larger daycare centers, but given how difficult childcare can be to access for parents due to things like expense and availability, aren’t we better served by an expansive market of care providers? As opposed to one that’s increasingly narrowed into a lower number of larger providers?

Another phenomenon related to overregulation is the proliferation of a black market. As a single dad, I use a licensed (and quite excellent) care provider, but I have several friends who use unlicensed providers, either because they’re cheaper or because that’s the only place they could find for their kids.

If regulations are so arcane a significant fraction of the market ignores them, what good are those regulations?

I’d rather everyone’s kids go to daycare providers who have obtained a valid license after compliance with certain reasonable regulations. The obstacle, unfortunately, is that many of the provisions we’ve put in place simply aren’t all that reasonable.

If we want childcare in North Dakota to be more accessible – and many, many lawmakers talk about this desire a lot – we could perhaps start with a review of the rules we’re making care providers comply with.