September 18, 2019

New report shows economic impact of lack of affordable child care

By: Jason Hagey   Comments: 0
AWB Government Affairs Director Amy Anderson helps release a new report on child care and the economy during a panel discussion at the 2019 AWB Policy Summit, Wednesday, Sept. 18, 2019, at the Suncadia Resort in Cle Elum. (Photo: Brian Mittge/AWB)

The lack of access to affordable, high-quality child care isn’t just a problem for families.

A new report released Wednesday found that it’s costing Washington businesses more than $2 billion per year in employee turnover or missed work, and the total cost to the state economy tops more than $6.5 billion per year.

The report, “The Mounting Costs of Child Care: Impacts of child care affordability and access to Washington’s Employers and Economy,” was produced in partnership with the Association of Washington Business Institute, Child Care Aware of Washington, Children’s Alliance, Department of Commerce, and the U.S. Chamber of Commerce Foundation.

The report was based on a survey of 400 Washington households with children under the age of 6. Elway Research Inc. conducted the survey and experts from the Eastern Washington University Institute of Public Policy and Economic Analysis analyzed the economic impacts based on the responses.

The findings confirm what many families already know: Finding high-quality childcare is difficult, and when it is available it’s expensive. For a typical single parent, the report found more than half of their income would go toward child care expenses.

Amy Anderson, government affairs director for the Association of Washington Business, serves as a member of the task force. She presented the report Wednesday during a panel discussion at AWB’s annual Policy Summit.

When AWB first began working on the issue, there was a question about why the business community would be part of the discussion around child care, Anderson said. Employers didn’t always realize how big of an issue it is for their business and for their employees.

The fact is, people are leaving jobs, not accepting jobs and foregoing education opportunities because they can’t find or afford child care, she said.

“It’s a workforce issue. It’s an education issue. It’s a rural issue,” Anderson said. “Most important, it’s a Washington issue. We need to educate people and make them aware.”

Dru Garson, CEO of Greater Grays Harbor, joined in the panel discussion. Grays Harbor County has struggled with high unemployment, and Garson said the lack of child care is a major problem when he’s attempting to recruit new industry to the area, or when an existing employer expands.

“It’s depressing for me when people turn down jobs because there’s no child care,” Garson said.

The findings put numbers to the challenges facing many families and employers, and they underscore the importance of affordable, high-quality child care at a time when many industries are facing a labor shortage.

According to the survey, workers with children under age 6 represent 15% of Washington’s workforce. Nearly half of those families surveyed – 49% - said they found it difficult or very difficult to find, afford and keep child care.

Among the findings:

· 27% of respondents quit their job or left school or training due to child care issues

· 9% said they were fired or let go due to child care issues

· 27% went from full-time to part-time as a result of child care issues

Part of the problem is that the number of child care providers is not keeping pace with population growth. The report notes that the number of family child care providers has dropped 20% in five years, while the state’s population has grown more than 400,000. The capacity of licensed child care provider slots grew by just 3,000 children during that time.

When families do manage to find child care, it’s expensive. According to data from Child Care Aware of Washington, families in Washington pay more on average for an infant in a family child care program than all but two other states. The annual cost for full-time quality care for one infant in a licensed child care ranges from a little more than $10,000 to more than $16,000. In some cases, it can cost more than the annual cost of tuition at Washington’s public universities.

As a result, parents may transition from full-time to part-time work, decline a career or education opportunity, quit their job or end up being fired.

According to the survey, 48% of parents with young children reported missing days at work, school or training in the last 6 months due to child care disruptions, and 40% reported the need to arrive late and leave work early due to child care issues.

The direct cost to employers as a result of employee turnover or missed work due to child care issues is $2.08 billion per year, the report found.

The Washington State Child Care Collaborative Task Force will use the findings from the report to develop legislative policy recommendations and a strategy for achieving access to affordable, high-quality child care for all Washington families by 2025.

To release a new childcare economic study, AWB Government Affairs Director Amy Anderson, at right, is joined by, from left: Ryan Picco, director of policy and advocacy at Child Care Aware; Nicole Sohn, executive director of Journey Discovery Center; and Dru Garson, CEO of Greater Grays Harbor, at the 2019 AWB Policy Summit.
Ryan Pricco, director of policy and advocacy for Child Care Aware, said the study is helpful because it defines the economic impact of a problem that’s existed for a long time. “We’ve known it had to impact the economy in some way,” he said. “Now, because of this report, we can speak directly to that.”

Nicole Sohn, executive director of the Journey Discovery Center in Spokane, said she has heard from parents who make 25 calls per day to in their attempt to find child care.

“People are not moving to Spokane unless they know they can get a spot,” she said.

Overall, the report concluded that families, employers and the state’s economy depend on the child care industry in the same way they depend on public utilities, but the industry is largely comprised of small businesses operating in a “broken market.”

Child care and early learning have well-documented value to the workforce and to society, and yet most parents cannot afford to pay for the true value of that child care, the report found.

Ultimately, the report concluded, without access to reliable, quality child care, employees and employers both suffer.