After facing a global pandemic, our road to full economic recovery may be a long one. But we’re beginning to take important, initial steps.
The American Rescue Plan (ARP) began the process of restarting our national economic engine, including offering significant emergency relief to small businesses. One of the key aspects of the ARP was the acknowledgement that our child care infrastructure is fundamentally made up of thousands of small businesses across the country, and the services of child care providers are crucially important for our entire economy.
Business leaders have come to understand these truths more clearly in recent years. A 2019 research report from the national business-leader group ReadyNation showed that a lack of access to affordable, high-quality child care for infants and toddlers alone dealt staggering damage to our economy. Thanks to those child care challenges, our economy loses a shocking $57 billion per year through lost productivity, revenue and earnings. Connecticut’s share of that economic hit is an estimated $765 million per year.
Again, that’s the economic damage due to a lack of child care just for infants and toddlers, and those figures are pre-COVID. The problem has certainly gotten worse.
A new ReadyNation report shows how that’s happened. The report, “Female Labor Force Participation Is Key to Our Economic Recovery,” reveals that female labor force participation, which is a critical factor in our gross domestic product (GDP), fell to its lowest rate since 1988 in the wake of the pandemic.
The child care crisis unmistakably connects to this drop in labor force participation. The child care sector shrank by about 167,000 jobs nationwide during the pandemic, which amounts to an alarming one-in-six workers overall. This reduction in an already-scarce supply, coupled with the other impacts of COVID, forced many parents to make a hard choice. Often, those parents (usually mothers) elected to focus on child care needs at home, causing them to leave the workforce themselves.
That drain on the workforce not only has a direct link to child care, but also reflects an essential truth that many business leaders have come to understand: in order to have the most focused, productive workforce possible, employees need to rest easy in the knowledge that their children are cared-for and safe during work hours.
Yet, child care doesn’t just impact the present-day workforce. A high-quality, nurturing environment for young children helps them build essential behavioral and cognitive skills that can lead to better academic and life outcomes as they grow, setting the stage for future success in the workplace.
We’re grappling with these issues at a time when our nation is having a larger conversation about significant public investments in early childhood programs. The business community is as prepared as it ever has been to work to find solutions to its employees’ child care challenges.
The recent ReadyNation report reflects this truth. The report included a survey of over 400 senior executives, with more than three-quarters saying that federal or state government incentives would boost the chances that their businesses would enhance child care support for their company’s workers.
The straightforward takeaway is that, while business leaders recognize that they have to do their part to help employees access high-quality child care, this isn’t a crisis that can be solved by the private sector alone. Overcoming the child care crisis will take collaboration by employers and parents, coupled with essential investments and reforms from state and federal policymakers.
The ARP was a good start, but the challenges of the child care crisis will require sustained investments and a genuine commitment to systemic change. To begin to make that commitment, lawmakers should provide incentives to connect employers with child care providers, and encourage established business owners to assist child care businesses in opening or expanding operations (particularly in areas with limited child care options), update the employer child care tax credit, and modernize employer-sponsored flexible spending accounts.
These steps alone won’t mean the end of the child care crisis, but they’ll go a long way toward helping employers effectuate real, near-term change when it comes to making sure workers have affordable, high-quality child care options. Those efforts will boost our current workforce— including helping many to return to work—as well as giving our next generation a better shot to succeed in school and life.
Roy Bostock of Greenwich is the Retired Vice Chair of Delta Air Lines and the Former Chairman of Yahoo!. He is also a member of the ReadyNation CEO Task Force on Early Childhood.