Oregon’s Child Care Shortage Squeezes Rural Employers and the Communities That Rely on Them

Programs that strengthen home-based providers help close the child care gap and drive economic growth.

In the forests of Douglas County, a seven-person logging crew that’s missing a worker who couldn’t find child care will cover less ground and harvest fewer trees. But the costs for wages and equipment are the same as when the entire crew reports to work.

"If you have one less person, that creates a lot more work, and it’s much more tiring. Instead of 10 or 12 loads in a day, you might get eight,” said Toby Luther, President and CEO of Lone Rock Resources, based in Roseburg. “We can still operate, but the production is much lower, so it definitely is painful.” 

This is just one example of how you don’t need to be a parent with young children to feel the impact of Oregon’s child care crisis. Across the state, there is a shortage of child care providers that burdens more than families. The gap hobbles employers too ─ from timber companies to hospitals, restaurants to retailers ─ and hinders the region’s economic vitality and growth.

In Coos Bay, nurses who miss work at Bay Area Hospital because they can’t find child care increase the hospital’s per-shift costs. The hospital ends up paying for the time off taken by the nurse stuck at home plus premium wages for a last-minute replacement. That is, if one can be found. Plus, each time the hospital drops below state-mandated staffing levels, it pays a fine.

“You add up those costs, and it’s huge. Obviously, the cost of healthcare goes up, so that impacts the consumer at the end of the line. It's all tied together,” said Bay Area Hospital’s President and CEO Gretchen Nichols.

Oregon’s child care gap hurts workers and employers. Without reliable child care, parents’ incomes and career opportunities decline, economists have found. When employees show up late or miss work altogether, employers lose revenue due to lower productivity and incur additional costs from absenteeism, turnover and rehiring.

For the hospital and the timber company, the lack of local child care options caused so many problems that both launched — and later closed — their own child care centers in recent years.

Shannon Acree owns Spirit Sprouts, a home-based child care business in Roseburg.

Today, a range of groups are pursuing other solutions to increase the supply of child care slots, including the Southwestern Oregon Workforce Investment Board, Business Champions for Kids in Douglas County and funders including Oregon Community Foundation. 

Here’s one promising approach: support for home-based child care businesses. These small start-ups appear to be a more viable business model in areas that cannot sustain full-fledged child care centers, especially for infants and toddlers. Business coaching and financial incentives can accelerate the development of these home-based providers and help them build sustainable businesses.

“The lack of child care is more acute in rural areas, but the bright spot is that these communities also know how to pull together very well,” said Ruby Ramirez, Senior Program Officer for Early Childhood Programs at OCF. “It’s exciting to see community-led efforts to improve the options available to working parents and the employers who rely on them.”

Running a hospital in a child care desert

The lack of sufficient, quality child care is a national dilemma that affects families and businesses in nearly all Oregon counties. Families with infants and toddlers have the hardest time finding care.

While options have increased in recent years for preschoolers (ages 3-5), all but two Oregon counties remain child care deserts for infants and toddlers (ages 0-2). Oregon State University researchers define a desert as an area where fewer than one-third of children have access to a state-regulated slot in a child care center or home-based business.

Infant and toddler care is scarce in smaller towns and less-populated counties because they have smaller labor pools to draw from, which means fewer child care employees to care for kids. Rural and often remote areas like those on Oregon’s South Coast often lack suitable buildings for larger centers or enough children to make them financially sustainable. 

At 900 employees, Bay Area Hospital is the region’s largest employer. If a housekeeper stays home with her child, rooms don’t get cleaned and turned over as quickly, which causes the emergency room to back up with patients who can't be admitted. When a nurse can’t come in because child care fell through, the remaining staff may be less responsive to patients. Nursing staff who work overtime to cover for missing co-workers miss out on crucial rest and are more likely to burn out.

Bright Beginnings child care center in Coos Bay, now closed.

In 2020, the hospital opened its own child care center, Bright Beginnings, that grew to serve about 30 children of hospital employees and other local workers. But building and maintaining a certified child care center was a big endeavor that never covered its costs, Nichols said.

“The problem that we got into is that we're in the business of delivering health care, not the business of delivering child care,” Nichols said. “We were losing money significantly. We were financially strapped as an organization. And as much as we didn't want to do it, we had to close the program (in 2025) because it wasn't our core mission.”
 
Housing, child care are top concerns for new hires

Lone Rock Resources also became a child care provider in 2020, but only for a few months, to fill the gap for employees whose options dried up during the COVID-19 pandemic. 

"The very first guy who came in was on one of our logging crews, saying, ‘I don't know what to do. My wife's going to get fired if she doesn't go to her job. We can’t just leave our kid home’,” Luther recalled.

Toby Luther, President and CEO of Lone Rock Resources.

The company swiftly cleaned up an empty office and hired out-of-work substitute teachers to care for 10 preschoolers and elementary-age children. Lone Rock paid for the service so that their parents could continue to harvest trees and truck logs through the pandemic.

It was an emergency response designed to be temporary. But Luther said it further opened his eyes to child care's crucial role in the local economy. Today, he estimates that half of his 85 employees have young children. In most cases, their partners also work, and their households rely on both incomes. 

As Luther hires for open positions, housing and child care top the list of concerns for prospective employees. The company is considering adding an optional child care component to its employee benefit package.

If Oregon’s rural communities can’t offer a sufficient supply of housing and child care, they can’t realistically compete for those workers or sustain a workforce, said Luther, who chairs the Board of Directors for The Ford Family Foundation, a Roseburg-based funder focused on helping rural children thrive.

“It’s hard enough to get people here,” he said. “We've got to continue to try to figure out ways to make sure rural communities aren’t behind the curve in these areas and actually get ahead of the curve."

Strengthening home-based providers

When greater child care access enables more parents to enter the workforce or work more hours at the jobs they already have, the economy grows. Increased access to child care results in higher total employment, household earnings and total economic output, according to a 2024 economic analysis for The Conference Board, a business-led think tank.

Quality child care is also critical to the healthy development of the infants, toddlers and preschoolers who will become the state’s workforce in 15 to 20 years. That’s why increasing child care access is a top priority for the Southwestern Oregon Workforce Investment Board, said Executive Director Sara Stephens. 

“Families need safe, affordable, reliable child care to be able to go to work,” she said.

The workforce board is the backbone agency for the South Coast’s regional early learning hub, which connects families to child care resources. To bolster the child care workforce and create more child care slots for local families, the board offers two programs, in partnership with other local and state agencies: an early childhood education apprenticeship and a child care business accelerator.

The paid apprenticeship enables workers to get on-the-job training while pursuing associate degrees at Southwestern Oregon Community College and Umpqua Community College. The business accelerator provides community members who want to start or expand a home-based business with start-up tools and technical assistance. 

Given the constraints that make it nearly impossible for larger child care centers to thrive in rural areas, home-based businesses “are the only model that works,” Stephens said.

Other communities are also taking steps to strengthen home-based providers: 

• In recent years, the Douglas County Childcare Coalition offered financial incentives to new or expanding child care businesses.
• On the North Coast, home-based providers receive business assistance through the Oregon Child Care Alliance (OCCA) and local partners. 
• In eastern Oregon, the early learning hub that serves Baker, Malheur and Wallowa counties offers similar support.

To fully address the child care shortage, "it's going to take the combination of the government, businesses and philanthropy to make it work, because the model is such a tough one,” said Luther, the timber company CEO. 

“But if we don't take care of our kids, we're not going to have a workforce. Ultimately, it's going to affect the entire economic output for not just us as a company, but for the whole region.” 

What you can do

• If you have a donor advised fund and would like to support OCF’s efforts to strengthen child care in Oregon, please contact your Donor Relations officer.
• If you’re new to OCF, our Philanthropic Advisors can help you make the most of your giving.