Unmet child care needs put $122B strain on the economy, report finds

Dive Brief:

  • The nation’s lack of reliable and quality infant and toddler child care is costing working parents, employers and taxpayers $122 billion annually in lost earnings, productivity and revenue, according to a report released Thursday from business leader membership group ReadyNation.
  • A 2018 ReadyNation study put the child care economic toll at $57 billion, but the COVID-19 pandemic and insufficient policy action have made the fragile child care system even worse, the report said.
  • A 2022 report from the Center for American Progress, a policy research and advocacy organization, said the K-12 education sector specifically could benefit from child care investments. 

Dive Insight:

Inaccessible child care particularly impacts the teacher workforce. About 20% of public school teachers have children ages 5 and younger, the Center for American Progress report said, citing unpublished data from the Brookings Institution of American Community Survey.

Members of Congress this week called on the Biden administration to make affordable, high-quality child care a priority in its fiscal year 2024 budget proposal, which President Joe Biden is expected to release next month.

Specifically, about 70 lawmakers are asking Biden to recommend at least $390 billion over six years. That figure was proposed in the Build Back Better Act but ultimately not included in the final legislation for the Inflation Reduction Act.

“Although the bold vision we arrived at in the Build Back Better Act was not passed in the Senate, there remains substantial public momentum to address the child care crisis that is preventing families from finding or affording the care and education that they and their young children need,” according to a letter from the lawmakers to Shalanda Young, director of the Office of Management and Budget.

Although the final FY 2023 federal budget included an additional $1.85 billion for the Child Care and Development Block Grant program, for a total of $8 billion, the budget omitted an expanded child tax credit that advocates said would help low-income families pay for child care and education expenses. The child care block grant provides funding to states to support child care access for low-income families.

The report by ReadyNation, which is part of Council for a Strong America, a nonprofit that promotes positive outcomes for youth, said families with children younger than 3 lose $78 billion per year — or about $5,520 per working parent — in lost earnings and job search expenses. In addition, child care challenges contributed to decreased productivity and effort at work, according to a ReadyNation survey of 806 working parents with children younger than 3.

The survey also revealed that more than half of parents said they missed work days or were distracted at work due to child care concerns. Half of working parent survey respondents said they scaled back their work hours because of child care problems. 

For employers, reduced revenue and extra hiring costs due to workers’ insufficient child care added up to $23 billion annually, or $1,640 per working parent. Disruptions in workforce productivity and tenure have “major economic consequences,” the report said, citing harms to worker morale, product quality and client stability.

Effective, well-funded policies from local, state and national governments that support child care efforts, as well as proactive child-centered supports from businesses, can help strengthen the workforce and economy, the report recommends.

There are efforts at different levels of government to address child care needs. At the state level, for example, New Mexico voters in November approved a constitutional amendment to permanently fund early childhood education, including child care, among other education initiatives.

This article originally appeared in www.k12dive.com

Leave a Reply

Your email address will not be published.