Guest op-ed: The impact of child care on the economy
As vaccination rates increase, businesses reopen and kids prepare to return to school, we still have a long way to go before the pandemic is in our rearview mirror. Our economy continues to be in a precarious position after the past 18 months of adversity. A critical piece to revitalizing our economy may surprise you: child care.
Child care was and is key to our financial growth. Even prior to COVID-19, a study by ReadyNation, a national network of senior business leaders, estimated that a lack of infant-toddler care alone costs our economy $57 billion each year in lost productivity, revenue and earnings, with $512 million of that figure from Utah. As a former employer and member of ReadyNation, I am well aware of the hiring and employee retention challenges caused across industries by the child care crisis.
High-quality child care provides a safe, nurturing environment for children to thrive and gives parents the peace of mind to return to the workforce knowing that their children are safe and supported. Without it, parents face difficulties at work and businesses falter. It’s important to remember that child care may also look different for every family. Parents need to be able to choose the type of care that best suits their needs. This may include home- and center-based care, co-operatives, family-friend-neighbor care and more. This choice is especially important for parents who work nontraditional hours. Parents need flexibility more than anything.
ReadyNation recently released new research on the impact of the child care crisis and female labor participation on the U.S. economy. According to the report, female labor force participation contributes $7.6 trillion to the U.S. GDP every year, and a lack of child care was a notable driver of women’s disproportionate departure from the workforce in the wake of the pandemic. If we let this issue remain unresolved, we will almost certainly have greater economic repercussions to come.
The 2021 report also surveyed over 400 top executives and found that two-thirds of employers are likely to expand child care supports for their employees, but cited significant financial and logistical barriers to doing so. Three-fourths of respondents to the same survey replied that state and/or federal incentives would increase their likelihood and ability to provide these supports. Business leaders are ready to come to the table and address this issue but cannot do it alone.
As we focus on getting our economy back on track following the pandemic, our lawmakers must collaborate with businesses to ensure that child care, in all forms, is readily available to working parents. Some ways to foster employer investments in care include updating and expanding the employer child care tax credit, modernizing flexible spending accounts and providing federal incentives to partner with new child care businesses, particularly in areas lacking child care options or where child care in nontraditional hours is unavailable.
We need our legislators to forge bipartisan solutions that strengthen our child care system and help businesses and employees get back to work.
Christian Young is partner emeritus and former CEO of Bridge Investment Group. He is also a member of the ReadyNation CEO Task Force on Early Childhood and resides in Salt Lake City.