A shortage of high-quality, affordable child care hinders West Michigan’s talent efforts on two fronts. It not only reduces labor participation rates – it also prevents children from receiving the early education that is essential to lifelong success.
The result is real economic cost to our region and our state. If West Michigan were to be a leader in labor force participation and educational attainment among peer regions, at 85% and 64% respectively, economic activity would increase by $3.4 billion dollars.
Ensuring wider access to quality child care is an important starting point toward those objectives.
Affecting parents and children alike
Many parents who want to work opt out of the workforce when they cannot find or afford quality child care. This also is a barrier to full employment when parents take lower-paying jobs with more flexibility for family obligations. Of the nonworking low-income parents with children, 70% cite “taking care of home/family” as the reason they are not in the workforce.
In Michigan, just 78.1% of women between the ages of 25 and 54 participated in the labor force in 2018, a rate that ranked 30th among all states. For comparison, Connecticut ranks 10th and Minnesota ranks 1st.
The effect is not limited to parents, however, because high-quality child care also functions as early education.
Multiple studies have shown the time from birth to age 4 offers a crucial window for children to develop health, lifelong learning abilities and emotional well-being. An absence of quality care in these early ages is among the factors that results in some children being developmentally disadvantaged before they even start kindergarten. This lack of readiness increases the cost to educate a child by 30% and does not reflect even higher costs if the child requires special education.
Improving the system
To address the child care crisis in Michigan, Talent 2025 and many partners advocate to:
- Increase the eligibility threshold for child care assistance to 185% of the federal poverty level.
- Increase the reimbursement rate to child care providers to at least 75% market rate
- Streamline the regulatory framework
- Increase the capacity of child care providers and invest in a well-trained workforce
- Create quality rated subsidy grants to increase the supply of infant/toddler child care slots in high poverty or shortage areas
Some progress is being made, as child care is increasingly recognized as a crucial part of conversations about talent.
Governor Whitmer’s executive budget recommendations for 2021 call for an increase in the eligibility threshold for families to Child Development and Care (CDC) subsidies from 130% of the federal poverty limit to 150%. If adopted, this increase will result in an additional 5,900 Michigan children being eligible for child care subsidy.
Meanwhile, the statewide Child Care Coalition – Talent 2025 is a member – convened by the Grand Rapids Area Chamber of Commerce is working to create “child care affordability that leads to quality, workforce development advancement, providing a path to prosperity that impacts poverty cycles, and garners business community support.” This includes working on the “tri-share” program proposal, which will incorporate business engagement in reducing child care costs to families. The program anticipates a three-party solution involving private, public, and personal accountability.
Talent 2025 also is working to create a stable and consistent environment for child care providers that supports their growth as business owners and essential stakeholders for the workforce, in early childhood, and in their own communities.
As the issue continues to gain traction, cross-sector engagement and problem-solving can bring change. They must, because child care is essential to the workforce of today and tomorrow.
