Here is a simple word problem.
Q: Mr. and Mrs. John Doe have two children. Mrs. Doe was laid off during the COVID pandemic. Bills are piling up. She needs to return to work to help her family keep a roof over their head, gas in the car, and food on the table. How much should childcare cost if she works 40 hours a week at minimum wage?
A: It doesn’t matter, as there is almost no childcare to be found. The Doe family faces big problems, as do thousands of American families who, through no fault of their own, are in similar situations.
The coronavirus pandemic closures clearly showed Americans the vital link between child care and the U.S. economy. For parents to stay employed and provide for their families, childcare is essential. For businesses to stay open and profitable, childcare is equally essential. The loss of an experienced worker hits the bottom line. Unfilled positions affect productivity and output. Worker turnover costs (recruitment and training) average about 20% of employee compensation for a wide range of jobs.
A growing number of companies, large and small, are initiating creative and practical solutions. Astute businesses are making the connection between paying a portion of the costs and maximizing long-run profits.
Flexible and hybrid schedules, remote work options, onsite childcare facilities and benefit packages that include childcare subsidies are helping businesses recruit and retain a stable, committed workforce. Sharply reduced absenteeism, less costly turnover, fewer workplace injuries, and increased productivity often result. As parents benefit, having them pay reasonable and affordable fees is a fair way to help sustain programs.
Because government reaps fiscal benefits — higher tax revenues and lower public assistance costs — from greater availability of high-quality childcare, government at all levels should contribute to the programs as well.
This is nothing new. World War II was won, in part, due to federally subsidized childcare. When men went off to to fight, women performed the vital manufacturing labor to produce the ships, planes, tanks, and weapons needed. But Rosie the Riveter needed childcare. To support these essential workers, an unprecedented federal childcare program, the Lanham Act, was created.
It ended soon after the war. In 1971, attempts were made to replace it with the passage of the Comprehensive Child Development Act. Citing “family values,” President Nixon vetoed it.
Those who complain they should not have to support childcare should consider the following points. A decline in the labor force slows economic growth (the Gross Domestic Product), since fewer workers are producing our nation’s output of goods and services. Additionally, a lower labor participation rate can lead to higher tax rates, since the government has less overall revenue to draw income and other taxes from. The Harvard Business Review has data showing the United States’ GDP could be 5% higher if women participated in the workforce in equal numbers to men.
With less income, families often turn to costly government programs for assistance. That costs all of us. Fewer workers mean fewer contributions to Social Security and Medicare. That affects all of us. Our taxes support senior services, schools, law enforcement, roads, hospitals, fire protection, public utilities and a host of other programs. These benefit us all. We may never need the sheriff or Meals on Wheels or have a house fire, but our communities are safer and more prosperous as a result.
Johanna Roe contracts with the Klickitat County Childcare Committee — a program dedicated to finding creative and practical solutions to address the ongoing lack of childcare — as a program coordinator and grant writer. She also serves as the Director of Rural Community and Family Resources with the Skamania Klickitat Community Network. She lives in Skamania County with her husband, where they raised their three children and experienced firsthand the difficulties of finding safe and affordable childcare.