Lack of Child Care Costs U.S.

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The continuing lack of access to high-quality and affordable child care has more than doubled its blow to the U.S. economy over the last five years, now costing $122 billion in lost earnings, productivity and revenue every year.

The top-line finding comes in a new assessment of the economic havoc wreaked by lack of child care from ReadyNation, a coalition of business executives focused on building a skilled workforce. The new total is $65 billion more annually than when the organization performed the assessments in 2018, prior to the coronavirus pandemic.

“Almost two-thirds of parents of infants and toddlers facing child care struggles reported being late for work or leaving work early, and more than half reported being distracted at work or missing full days of work,” wrote Sandra Bishop, ReadyNation’s chief research officer and author of the report. “An overwhelming 85 percent of primary caregivers said problems with child care hurt their efforts or time commitment at work.”

The report outlines a multipronged blow to the economy – with families losing $78 billion per year in forgone earnings and job search expenses, employers losing $23 billion annually due to child care challenges faced by their workforce, and taxpayers losing $21 billion each year in lower federal, state and local tax revenue.

The country’s child care and early learning crisis existed long before centers began closing due to the coronavirus and has since been all but gutted nearly three years into the pandemic.

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The sector is still reeling from multiple problems: It’s unaffordable for most families. Average child care in Washington, D.C., for example, costs roughly $25,000 a year – and it pays workers far too little pay for the scope of work, degrees and certifications that are required for employment. The average hourly wage of a child care worker in the nation’s capital is $18, according to the Bureau of Labor Statistics.

“America’s child care crisis isn’t just holding back working parents and their children, it’s actively harming our economy,” says Sarah Rittling, executive director of the First Five Years Fund.

“America’s economic success depends on elected officials helping parents find and afford the options they need, and ensuring providers in every community can afford to remain open and staffed by early educators,” Rittling says, adding that the ReadyNation report released Thursday “joins a steady stream of data and rationales to support the need for action.”

Indeed, the Department of Labor debuted its National Database of Childcare Pricing last month – a new attempt to lay bare the high costs of care – which shows that it can cost anywhere from 8% to 19% percent of a family’s income for just one child, with median yearly prices surpassing $17,000.

“All across the country, families are facing burdensome child care expenses,” says Wendy Chun-Hoon, director of the Labor Department’s Women’s Bureau. “The last few years have highlighted the tension parents experience when they need to go to work to provide for their families, but have difficulty doing so if they can’t access affordable child care.”

The database showed, among many other things, that mothers are less likely to be employed outside the home in places where child care prices are high – even in places with higher wages.

“Reducing out-of-pocket child care expenses for families would support higher employment, particularly among women, lift more families out of poverty, and reduce disparities in employment and early care and education,” says Chun-Hoon.

While access to early education has long been thought of as a Democratic priority, recent polling by the First Five Years Fund shows that’s no longer the case: 86% of voters agree that improving the quality of child care and early learning programs and making them more affordable for families are a good investment of taxpayers’ money, including 76% of Republicans, 86% of swing voters and 87% of suburban women.

But it’s unclear what Congress and the Biden administration can do now to unwind the crisis, having scrapped their best chance of passing major funding for universal child care and pre-kindergarten last year and leaving the behemoth effort largely for states to tackle on their own.

More than 70 House Democrats wrote to the White House earlier this week, demanding that Biden make child care and early childhood education a top priority in his Fiscal Year 2024 budget by providing no less than $390 billion – effectively matching the level in the House-passed Build Back Better Act, which was never included in the final version of that legislation.

“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,” the lawmakers wrote.

That type of funding is unlikely to ever see the light of day given the current political landscape in which Republicans control the House and would rather expand funding for the already established Child Care and Development Block Grant – a program that’s widely criticized for failing to reach families that are in the most need of child care.

“Child care and early learning are the backbone of our economy, yet families struggle to find and afford care while early educators scrape by on poverty-level wages,” says Melissa Boteach, vice president for income security and child care/early learning at the National Women’s Law Center.

“We need comprehensive and long-term solutions that invest in child care and early learning as a public good.”


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