Lack of Affordable Childcare a Huge Issue Locally and Across the Nation
More than two years since the COVID-19 pandemic triggered the most catastrophic workforce decline in history, men have returned to work at a higher rate than women. In April 2022, the U.S. Chamber published data citing one million women missing from the labor force compared to pre-pandemic numbers.
What can we attribute to the lack of women returning to the workforce? A number of factors: layoffs in the market, positions being consolidated or eliminated, and for many working moms – lack of affordable childcare.
When I first became pregnant, I paid little mind to friends and other mothers telling me I should begin my daycare search. I laughed then, thinking how crazy it would be to look for daycare a year in advance of when my child would need it. It turned out that was well-placed advice.
When I originally toured daycares in May 2022, I never could have imagined that I would be on a waitlist until January 2023. My son was born August 12th, and when I returned to work on October 31st from my maternity leave, with no daycare option, I was forced to bring him along with me to the office. Imagine replying to emails and joining conference calls with a baby in your lap.
According to the U.S. Chamber, “in the last two years, 16,000 childcare centers were forced to close their doors and many more were operating at limited capacity. This diminished the accessibility and prevented affordable childcare across the nation. In many cases, parents—most often women— stayed home to care for their children. Half of all workers and nearly 60% of parents cite lack of childcare as their reason for leaving workforce.” Lack of access has resulted in millions of working families across the U.S. having to make the difficult decision between ensuring quality care for their children or pursuing a career.
The lack of access to affordable childcare doesn’t just disrupt the family unit – it also affects the economy. Without a healthy childcare system, tax revenue declines, workers leave jobs, and economic production suffers. The U.S. Chamber’s data further shows that not only does lack of childcare affect productivity of employees, but it also affects their bottom line. Employee turnover costs companies on average 33% of a worker’s total compensation to replace them, while impacting the recruitment of skilled employees. Recruiting and retaining qualified employees continues to plague employers in 2022, with 10.7 million job openings in September – 5.6 million more than unemployed workers, according to recent job reports.
So what is the solution? The FY2022/23 state budget for Pennsylvania included a new Child Care and Dependent Care Tax Credit which is a $25 million program to benefit working families with children in daycare who already qualify for the similar federal program. The state childcare tax credit encompasses 30% of the federally approved expense. Pennsylvanians paying for childcare services will be able to claim the credit when filing state taxes starting in 2023. Families could be eligible for either $180 (one child) or $360 (two or more children) for households earning above $43,000, or $315 (one child) or $630 (two or more children) for households earning less than $43,000.
The budget also allocated $90 million in federal American Rescue Plan (ARPA) funding to provide one-time childcare staff recruitment and retention bonuses which will hopefully increase access.
I commend the PA Legislature and Governor Wolf for adopting the program and urge them to include it in future budgets. We mothers would also ask decision makers to look at other innovative programs, such as public-private partnerships that provide quality childcare to employees. This economic challenge facing families merits the attention of both employers and policymakers.
What does a public-private partnership for childcare look like? In their 2022 legislative session, the Kentucky General Assembly began addressing the issue by passing legislation that created a new pilot program, the Employee Child Care Assistance Partnership, where the state matches an employer’s contribution (up to 100%) for employers who subsidize the cost of childcare services for an employee (Source: Kentucky Chamber of Commerce). For example, if an employer wants to assist employees with the cost of childcare services by contributing $100 a month, and the state’s conditions and guidelines have been met, the state will contribute an additional $100 to match the employer’s monthly contribution. Offsetting the cost for employees positively impacts company culture, increases industry leadership and influence, and addresses a critical issue across the nation.
Many small and medium-sized businesses, however, are unable to contribute these funds toward daycare, as they are already facing inflation, supply chain issues, and other financial burdens in the current economy, but for those medium and larger capacity companies, consideration should be given to such a program. Our legislature should work with employers across the Commonwealth to assess the need and value in funding this type of program.
Another option, where possible, is for employers to consider implementing on-site childcare facilities or to partner with a local provider and/or fellow businesses to offer affordable childcare for their employees. Onsite care or local partnerships build goodwill, not just within your company, but within the community. This type of investment in childcare will ensure positive outcomes for a business – recruitment and retention of employees, increased performance, and the creation of a positive company culture, which may inspire other companies to do the same.
Other options include reaching out to our school districts, youth development groups and community organizations, and economic engines such as the local chambers, to establish other pipelines to expand care. Employers should regularly survey employees and report their findings to local representatives and officials.
If the pandemic showed us anything, it is that the benefits of addressing the work-life needs of employees greatly outweigh any drawbacks. While there is no one-size-fits-all approach, the future economic viability of our communities depends on addressing the childcare shortage. The issues needs to be tackled head on by public and private entities alike, with a combination of policy solutions. In the meantime, I’m still on that waitlist, 9 months later, so I’ll continue to bring my son to work with me. He’s the real boss anyways.
Laura Manion is President & CEO of the Chester County Chamber of Business & Industry.
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