The COVID-19 pandemic has disrupted several industries, and the after-school program sector is no exception. While the growing demand for these programs led to the creation of more establishments, the pandemic has caused many operators to leave the industry due to the decline in demand. Although demand has increased from its 2020 lows, staffing shortages remain a challenge, preventing some after-school programs from reopening in 2021 and 2022.
According to a local Daily Gazette report, the Schenectady, New York YMCA had only opened 80.0% of before and after school care programs in August 2022. The shortage of workers willing to work with children due to COVID-19 risks and low pay has increased tuition costs, making it difficult for low-income households to access after-school services. As a result, industry participation rates and government funding are expected to decrease.
However, state governments have recognized the importance of after-school programs and are expected to provide some support. For instance, the New York state government has made $340.0 million available for child care programs to hire more workers and stabilize industry operations.
Despite the growing demand for after-school programs, the number of establishments is estimated to fall an annualized 2.3% to 144,717 over the five years to 2022. On average, after-school programs have one employee per 11 children, with the number of industry employees declining at an annualized rate of 2.5% to 703,083 staff over the same period. Rising wages and falling employment are expected to lower profit margins, with industry profit estimated to have decreased from 2.8% of revenue in 2017 to 1.1% in 2022.
In conclusion, the COVID-19 pandemic has significantly impacted the after-school program sector, with staffing shortages and rising costs posing major challenges. However, state governments’ support can help stabilize industry operations and improve access to after-school programs for low-income households.
*Source: IBISWorld – Industry Report OD5884 – After-School Program Providers
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