Union campaign poses a collision course (continued)

ON THE SURFACE, the current subsidy rates — up to $150 a week for a child who is in "full time" care for at least 30 hours a week – seem generous. Multiplied by six children — the maximum allowed without help from an assistant – this equals, assuming a 40-hour week, $22.50 an hour.

But that’s illusory, advocates say. Most providers work much longer days, some as many as 100 hours a week, according to a 2001 study by the Day Care Justice Co-op. They have considerable expenses — food, supplies, and employer costs, if they hire assistants. And when expenses are subtracted from income, then divided by hours worked, actual pay drops far below the state’s $6.75 an hour minimum wage. A provider earning $2000 a month, with expenses of $1216, for example, has a net monthly income of $784. For a provider working 68 hours a week, the study estimated, this equals an hourly wage of $2.88.

Achieving even this level has taken tremendous effort over several decades, says Joe Simoes, lead organizer for District 1199. He says DARE (Direct Action for Rights & Equality), which formed a committee of providers in the ’90s to get the state to pay them promptly, did pioneering work. The DARE committee (which formed the Day Care Justice Co-op in 1998) also led a long fight for medical insurance. Providers argued that if they were sick, they couldn’t care for children whose parents, in turn, couldn’t go to their jobs. The state offered them RIte Care in 1997. That same year, Rhode Island’s progressive welfare reform program made day-care an entitlement, thereby clearing an obstacle from the transition from welfare to work.

In 1998, home and center-based providers, as part of a coalition, helped craft the Starting RIght law, which expanded subsidized day-care to working poor families and provided a mechanism to hike subsidized rates every two years, based on a survey of the day-care market. Last year, however, with a hike scheduled to take effect January 2004, Carcieri proposed freezing rates to help close a budget deficit. That triggered a big protest from well-organized day-care providers. The full raise did go through. But so did a new part-time rate for children in care between 20 and 30 hours a week, which actually reduced income for many providers.

Chas Walker, the District 1199 organizer, says the State House battle helped spur talk within the Co-op about the need "to build more power, so we don’t, every year, have to have a budget fight." Providers also wanted "a voice at the table" about policy changes.

The Co-op approached several unions, and picked District 1199, whose 3500 members include hospital nurses and nursing home employees — professions it considered compatible with day-care providers. The two organizations worked out a "partnership agreement," in which the Co-op retained its organizational identity, concentrating on tasks such as training programs for its members.

The question of whether the day-care providers will be considered employees is before the State Labor Relations Board. The seven-member panel is composed of one "public" representative and three members each from management and labor. Before concluding on January 27, the board held three hearings, and it’s expected to issue a decision – which could potentially be appealed to Superior Court – later this year.

The union faces multiple hurdles. First, it has to have home day-care providers classified as state workers. It must win an election in which workers designate the union as their collective bargaining agent. Then, District 1199 would begin to negotiate a formal contract with the state.

Adding to the complexity is the diverse makeup of the home day-care field, both economically and geographically. About half of the providers are in the Providence, Pawtucket, and Central Falls area, many with Latino backgrounds and serving poor children eligible for state subsidies. Other providers are in suburban communities, where families may be able to afford care without subsidies. Many providers care for a mix of private pay and subsidized children.

Several providers in northern Rhode Island say they are opposed to or leaning against the union because they feel officials were not upfront in the initial stages of the union campaign. Donna Chartier, who has provided day-care services for 14 years from her North Smithfield home, says she believed that when she signed the union’s card, it was to enable the union to contact her about future meetings and discussions. Instead, she says, the cards are being used to advance the unionization process. "We signed the cards under false pretenses," Chartier says. She’s also afraid of losing her current tax benefits, and fears unionization "will take away my identity."

In Woonsocket, Angela Dufresne said she worries about not being able to claim business expenses as tax deductions – last year’s expenses totaled $1200. Provider Laurie Joannette, also of Woonsocket, believes her RIte Care benefits are superior to state worker benefits, because state employees are charged co-payments for prescriptions and doctors’ visits. Further, Joannette says, day-care providers have been able to organize to get pay hikes, insurance, and to ward off cuts, and she feels they can continue to do so in the future. "I’m totally against the union," Joannette says. "They can’t offer me anything I don’t have."

Asked about such complaints, Simoes says the union clearly explained the purpose of the union cards — that they were applications for union membership — and which, when presented to the labor board, indicate broad support for unionization.

As to whether providers could lose tax deductions by changing their self-employment status, Simoes says their employer might reimburse them for expenses, and that some might still be able to claim unreimbursed expenses. Also, Simoes says, providers would save substantial sums on Social Security and Medicare taxes, since self-employed people have to pay all the required taxes, but employees pay only half.

The Phoenix asked Joseph P. Matoney Jr., a University of Rhode Island accounting professor, about the tax trade-offs. Matoney says the impact for a self-employed person depends on individual circumstances.

Self-employed workers, Matoney says, can deduct all ordinary and necessary business expenses. But employees can claim only itemized deductions for required expenses not reimbursed by the employer, and only those expenses that exceed an amount of money equal to two percent of income. For example, an employee earning $30,000 would be able to deduct business costs above $600, whereas a self-employed worker can claim every expense dollar without worrying about a threshold.

On the other side of the coin, Matoney says, a self-employed person must pay 15.3 percent of their income as Social Security and Medicare contributions, but the boss must pay about half for employees. Thus, an independent contractor earning $30,000 might pay about $4590; as an employee, they would contribute about $2290.

Union organizer Simoes says the actual working conditions will ultimately be determined by the contract terms that the union negotiates with the state, and that the union will attempt to adjust inequities that might arise. "We are not organizing to go backwards," he says.

A key part of the unionization effort is that the day-care providers themselves will set the bargaining goals, he says, and the negotiation process will give them a say in policies over which they now have no control. "I think providers all over the state, whether they are in Providence or South County, have concerns," Simoes says. "They are the experts. They take care of kids every day; they are not being heard when it comes to decision-making."

To Melida Brito, the Providence day-care provider, the unionization drive is part of a long process to improve a profession that shapes children at critical time in their lives. Many social problems — drug abuse and crime — can be reduced if children are well cared for from the outset, she says.

To do that, she says, day-care providers need better working conditions and more money, although other improvements are even more important. "I personally don’t need that much to live on. Money is not the most important thing," Brito says. "We need better treatment, better understanding, more respect."

Brian C. Jones can be reached at brijudy@ ids.net.