Even before the pandemic, child care shortages were keeping people out of the workforce. The challenges facing this essential industry have only grown. So has its role in our economic recovery.
In a May 2020 blog “COVID-19 Pandemic Reminds Us of the Vital Role of Child Care,” Talent 2025 reiterated the importance of supporting child care providers. This becomes even more relevant as we move into an unpredictable K-12 school year with the possibility of prolonged remote learning. Child care providers will be expected to step in as educators – a role the profession has long fulfilled. In Michigan, an estimated 60 percent of children ages 6 to 12 (more than 500,000 children) will need child care while schools remain closed.
On top of that, child care is essential to getting people back in the workforce – even as providers face extreme challenges to remain viable.
Unfortunately, we are seeing a dramatic loss of childcare providers nationally, statewide and in West Michigan.
Troubling trends
A survey by the National Association for the Education of Young Children revealed that 86 percent of the providers are serving fewer children now than before the pandemic, with enrollment down an average of 67 percent. Upwards of 70 percent of child care centers are facing substantial cost increases for staff, cleaning supplies, and personal protective equipment.
Even before the pandemic, child care providers were operating on razor-thin margins. Operating in the red, as most child care businesses are now, is unsustainable – particularly as these programs struggle to meet enrollment numbers. This is a problem not just for the child care business sector, but for the economic stability of our state and country.
An additional state-by-state study by NAEYC in July found Michigan was on track to permanently lose around 33 percent of providers – a loss that would account for 121,264 child care slots. Using federal Bureau of Labor Statistics data, we can project that a 33 percent reduction in child care could possibly decrease Michigan’s maternal labor force by around 149,442.
Even now, self-reported data from the Early Childhood Investment Corporation shows only about 51 percent of programs in Michigan indicated they are open.
Economic impact
Child care is the foundation of our economy. Inadequate access to high-quality child care costs businesses $57 billion each year in lost productivity, earnings and revenue.
A shortage of child-care programming puts wide-ranging restrictions on prosperity by:
- Limiting the number of parents in the workforce: Many more parents would join the workforce if good child care options were available.
- Decreasing the amount of tax revenue coming into the state each year: Before the pandemic, parents forfeited $30 billion-35 billion in potential income each year due to the lack of affordable child care options, translating to an annual loss of $4.2 billion in tax revenue.
- Reducing upward mobility for women in the workforce: Parents, particularly mothers, with access to reliable, affordable child care are more likely to participate in the labor force and experience fewer career interruptions. The job of child care often falls on women. An estimated 72% of moms with children under 18 are in the workforce, equating to roughly 419,964 women in West Michigan. In the absence of affordable, high-quality child care, many parents leave the workforce and sacrifice long-term earnings. This is particularly true for mothers.
Addressing the issue
Using federal CARES Act money, Michigan provided $130 million to child care providers to sustain their businesses. In addition, many communities have come together to discuss the high priority of child care sustainability not just through the pandemic, but also into the future. Local legislators have seen an uptick in child care providers raising concerns.
Quality child care has long been a priority of Talent 2025, and we are seeing signs of progress toward reform. It is time to build on the increase in attention to this issue with continued urgency.
A New York Times article spoke to the general lack of appreciation for the economic contributions of child care during the pandemic. The fact that a low-paid sector of work is being asked to assume more risk by remaining open speaks to “the disposable nature of this work — the less-than approach to and appreciation of this work,” said Myra Jones-Taylor, Ph.D., the chief policy officer at Zero to Three.
Now is the time for greater understanding that child care is essential, not just for the act of care, but economic stability of all.
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