A Moment with Dr. Moore

America Runs on Child Care

At the start of this year, 4.5 million Americans were unemployed because they couldn’t afford child care. It’s a figure that alarms early learning leaders like Michelle Kang, CEO of the National Association for the Education of Young Children. “Child care is critical to the economy and to equity and inclusion,” she says. “Early childhood education is a support for both child development and the workforce, and the lack of available, affordable and high-quality early childhood education jeopardizes children’s development and parents’ ability to be part of the workforce. This issue affects all of us —parents and non-parents, employers, educators and businesses—and we can all be part of the solution,” Kang points out.

She will soon be joining me and other experts in our field at the Early Educators Leadership Conference, where we’ll discuss new ways to solve the child care crisis for our country’s families. They deserve more support, and I was reminded of their struggles as we marked National Working Parents Day this month. Working parents are struggling to pay for essentials since grocery and energy prices have gone up in recent months. They skip doctors’ visits due to health care costs. They’re worried that they won’t be able to retire. They also find it impossible to achieve a work-life balance that will allow them to be good parents. And as the father of two girls, I know how much attention children need. I also know how important it is to feel that your children are learning and safe while you’re on the job.

Working parents look for child care programs that can prepare their children for lifelong success. But finding quality child care has been hard, especially since COVID led nearly 16,000 child care centers to close nationwide, a decrease of 10 percent. Paying for quality child care is even harder, and it’s the number-one burden that crushes working families. Most families expect to spend at least 20 percent of their entire income on child care. In more than 20 percent of families, one parent, who is most often the mom, had to leave the workforce to provide child care themselves, leading to a sizeable loss of household income. Almost half of families have cut back on groceries to afford child care, and 31 percent of parents think about taking on a second job—all to pay for child care.

And while the parents are facing a financial crunch, businesses are feeling the pressure, too. Employers lost $3 billion each year in the last decade due to employee absences that resulted from child care breakdowns. And when lack of child care causes employees to leave the workforce, the toll of this turnover is high. Recruiting and training new employees costs businesses 20 percent of an hourly employee’s wages and up to 150 percent of a manager’s pay—expenses that have increased in recent years. During the pandemic, 26 percent of women who left the workforce said it was due to the lack of child care, and many have not returned. Now employers stand to lose an alarming $840 billion in economic output due to the drop in work by women.

The pain that companies and parents are feeling may only get more acute. On September 30, 2023, pandemic-era federal funding for child care comes to an end. The withdrawal of $24 billion in federal aid will put providers and parents on the edge of a child care cliff. Up to 70,000 child care programs could close due to the loss of funding. And those that remain open could pass the increased costs of staying in business onto parents or reduce the number of children they serve.

The economic fallout will also affect business, so a growing number of companies have looked for a solution by investing in child care. It’s a trend that has been gaining traction nationwide, with large national companies like Tyson, Chobani, Patagonia and Google offering various levels of assistance for working parents. And local companies have also joined in after realizing that quality early child care affects their bottom line.

Over the last few years, more employers have been looking for ways to offer family-friendly policies, and more employees are looking for job openings among companies that provide them. “Back in the day, it wasn’t an employer problem, because you chose to have kids. Not anymore. It’s very much an employer problem,” says Rhoda McVeigh, director of human resource services at Falmouth-based KMA Human Resources Consulting in Maine. And companies in her state are tackling the problem head on by making big investments. Jackson Laboratory in Bar Harbor shelled out $5 million for an on-campus day care, scheduled to open next year. TimberHP, a wood fiber insulation company in Madison, is offering $5,000 in a dependent-care flexible spending account for parents to spend on child care.

Many miles away, some Nebraska companies are also addressing their employees’ child care issues in order to attract and retain workers. Hudl, a performance analysis technology group, has opened an on-site day care at its headquarters in Lincoln. QLI, a rehabilitation center in Omaha, provides staff with access to caregivers via Swishboom, a mobile app. Kellee Milkuls, founder and CEO of Swishboom, says she’s having many discussions with local companies that are seeking ways to ensure their employees don’t have to leave the workforce due to challenges with child care. And Milkuls also sees the bigger picture that’s helping her business to boom. “This is not just an Omaha problem,” she says. “There is a child care crisis in the United States.”

Nationwide, a number of solutions are under discussion, and they go well beyond on-site and near-site child care centers. Employers can partner with existing providers in their locales and subsidize the cost of employees’ child care. They can also pay funds directly to providers, allowing them to increase educators’ wages and retain them in the early childhood workforce.

Business leaders have more skin in the game as the end of federal child care aid threatens to push us over the child care cliff. Still, the idea of employers getting involved in child care isn’t new, as Michelle Kang understands. She spent many years at Bright Horizons, one of the nation’s largest providers of employer-sponsored care. “I worked directly with employers to help them understand the value proposition for their workforce of investing in high-quality early education,” she says. And more employers are now getting the message as they look to recruit and retain staff. “It’s not a perfect solution,” Kang says, “but it is a solution”—and one that could work to the benefit of us all. America runs on child care since it allows today’s workforce to contribute and tomorrow’s workforce to also succeed.