This article was sourced from allwork.space
Soaring childcare costs are threatening the livelihood of working parents and impacting workforce demographics across the United States.
As COVID-era federal grants expire, the costs for both childcare providers and working families have surged. Meanwhile, wages for childcare workers remain low — impacting attraction and retention efforts within the field.
As childcare becomes increasingly unaffordable, more parents may be forced to leave their jobs to provide care for their children. This reduces the labor force participation rate, more noticeably amongst working mothers, and this can also damage career advancement opportunities.
Childcare markets nationwide are experiencing the repercussions of rising costs.
According to Child Care Aware of America’s latest annual report, the average yearly cost of childcare reached $11,582 per child in 2023.
In many states, this sum exceeds the typical rent or even mortgage payments, placing a substantial financial burden on families.
The report also noted the cost of childcare continues to rise — even though the increase didn’t outpace inflation between 2022 and 2023.
There’s also the “childcare cliff” caused by the ending of pandemic-era federal aid. Nearly $24 billion was provided to states to sustain childcare services as part of the American Rescue Plan of 2021, but now CNN Business reports providers are finding it increasingly difficult to stay afloat in the face of escalating costs for salaries, insurance, and supplies.
The funding previously supported services for over 225,000 childcare providers nationwide.
This has profound implications not just for childcare providers, but also for parents and the broader workforce. It’s reported that low wages and minimal benefits for workers within the childcare sector are common, despite its critical role in early childhood development.
According to a report published by The Council for a Strong America, the U.S. economy stands to lose about $122 billion annually in economic productivity and revenue when parents lack access to affordable, reliable child care. This crisis not only affects families but also has ripple effects throughout the economy, impacting even those without children.
A report published by Moms First and Boston Consulting Group studied the economic benefits of improving childcare support, revealing that childcare benefits can offer a return on investment between 90% and 425% for U.S. employers.
These benefits are also reported to help reduce employee absenteeism and boost productivity — making them a valuable addition to employment packages and an important factor in workforce retention and recruitment.
In light of recent findings and persistent challenges, several experts and advocates are calling for increased government funding and supportive policies.
Recommendations include expanding subsidies, lowering childcare costs, and investing in workforce wages and benefits. Advocates claim these measures will ensure the sustainability of childcare services by supporting the attraction and retention of professionals and the well-being of future generations.