Why Childcare Should be an Economic Development Priority

When companies take a look at potential sites for expansions or when entrepreneurs explore potential for starting a business, one of the top considerations is the labor market. In today’s current market the available workforce is limited, thanks in part to a strong economy and an historically low unemployment rate of 3.6%.

However, there’s a potential pool of workers who aren’t participating in the workforce for a variety of reasons – mothers of young children. According to the Washington Post, if the labor force participation rate of mothers of young children could be raised to match the participation rate of women with school-age children, approximately one million more workers would be in the workforce today. Not only that, but data shows the U.S. GDP could be 5% higher if women participated in the workforce at the same rate as men.

Employment Challenges

Why aren’t women of young children participating in the workforce? There are a multitude of reasons. One that is often bandied around is that shutdowns and restrictions during the COVID-19 pandemic led to a disproportionate number of women losing their jobs compared to men, and when schools and daycares closed it was women who often left the workforce to stay home with the kids. While this is true, the numbers of women working have pretty much rebounded to pre-pandemic levels. According to the Federal Reserve, the gap between the number of mothers who work compared to the number of women who work has narrowed to about the same levels as before the pandemic.

One issue affecting women disproportionately seems to be the lack of affordable childcare, more so than the lack of available jobs or a desire of women to work. This is due to a number of reasons:

  • The caregiving workforce hasn’t recovered from the pandemic. According to the Bureau of Labor Statistics, 1 in 10 people in that category haven’t returned to their jobs, which in turn leads to a shortage of placement options for parents in need of childcare.
  • 16,000 childcare programs closed permanently between December 2019-March 2021.
  • While many employers have responded to employee and cultural demands for higher wages, childcare workers still make an average of $12 an hour, making it hard to attract qualified workers.
  • A shortage of workers makes it more difficult to provide the necessary number of classrooms to stay within federally mandated teacher/student ratios.
  • Childcare is one of the biggest monthly expenses for children under 5, making the choice for some parents between working and staying home with the kids a purely financial decision.

All of these factors make it hard for parents to find good quality, affordable childcare for young children. But without it, parents are more likely to leave the workforce, or if they are working they more often leave work early or miss days due to lack of childcare, leading to a decline in worker productivity.

Helping Moms (and Dads) Work

There’s no simple or easy solution to making quality childcare readily available and affordable. But there are some things employers can consider to make jobs more attractive to parents of young children.

Offer childcare as a benefit. From flex pay accounts to treating child care in the same way as healthcare benefits, having a company-sponsored plan can help ease the financial burden of childcare and make it more likely parents with young children can work.

Consider creating a daycare on campus. Some large employers are already doing this, having daycares within the same building so parents not only get to work in close proximity to their kids, but also have a more reliable option than outside the company.

Offer flexible work schedules and work-from-home options. One thing the pandemic helped many employers recognize is that some jobs can be done just as well at home as at the office. This flexibility can be especially appealing to parents who need to be available for their children. “It’s only a few years of an employee’s career that they are caring for young children,” says Cookie Mahon, CEO, American Kitchen Machinery and Repair, Philadelphia, Pa. “I’ve found that allowing for some flexibility during that time can lead to employees that are more loyal for the long-term.”

Family Forward NC has a new family friendly workplace certification and a useful workplace guide. The certification designates employers that offer policies and practices that support the health and well-being of working families and children. It shows potential employees, customers, and stakeholders that the company cares about working families and children and is a workplace where pregnant workers, parents, and caregivers will feel supported and can thrive. 

Economic development professionals can help business owners become aware of the challenges facing parents of young children, promote family-friendly workplace practices, and work with communities and business leaders to find viable solutions. They can raise awareness of the issue by organizing and sponsoring child care summits, publishing articles on the issue, and lead the conversation for employer-driven solutions.

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