Understand the business case for childcare
Meet Elise, a working mum, and Eddy, her son.
Meet Elise, a working mom, and Eddy, her son. Let’s walk through the big picture of childcare, where businesses are intertwined with working parents and caregivers, their children, and an undeniable ripple-effect on the wider economy.
The Struggle for Families
Those critical, first five years…
Eddy is three years old. His next few years of life will be some of the most critical for brain development and learning, preparing him for a life of learning in academia and later as a participant in the workforce. From birth to five years old, 90% of a child’s brain develops. And it takes care from adults—especially caregivers and childcare workers—to support positive development that will set Eddy up to do well as a future employee.
For many caregivers childcare is simply unaffordable.
Parents like Elise and Sara keep showing up to work, but the data shows they face an uphill battle in balancing work & childcare.
Diving deeper into childcare spending
American families spend an average of 24% of their annual income on childcare expenses.
Overall: In 2016, the United States Department of Health & Human Services (HHS) set a national benchmark on the maximum co-payments a low-income family should spend on childcare at 7% of their annual household income to achieve parity with the percentage of income private pay families spend. However, only 14 states have co-payments for low-income families at or below this level.
While high- & middle–income families spend on average 8% of their income towards childcare, unaffordability hits low-income families harder—with 25-30% of their household income spent on childcare.
Percent of family income spent on childcare
Source: Care.com Childcare Cost Report, 2024, World Population Review Childcare Costs, 2024
7% Federal affordability benchmark
Total family income
Childcare cost
Percent of families where childcare is unaffordable by race & ethnicity
Source: Data for Equity Research Brief, Diversity Data Kids, 2018
Unfortunately, this struggle deepens for Hispanic & Black families.
Over 95% of low-income parents spend above the 7% federal affordability benchmark for care. Across all demographics, Hispanic and Black parents are most likely to experience unaffordable childcare.
And in the midst of all this:
Eddy’s future is impacted by the care he receives.
Elise and Sara can barely afford childcare options available to them, let alone have the privilege to determine which care option is best for their family and which option will provide Eddy with the highest quality education for their needs. This will have an important impact on Eddy’s lifelong learning—without quality early childhood education, brain development can be compromised—jeopardizing Eddy’s future and their potential as a learner and earner.
Research shows that for every $1 spent on quality early childhood care and education, there are $7-10 in benefits gained over the child's life for society, about half of which comes from increased earnings for children when they reach adulthood—children who had early education show higher educational attainment, adult earnings, and less criminal engagement.
Sources: The Rate of Return to the High/Scope Perry Preschool Program, National Bureau of Economic Research, The Science of Early Childhood Development, Center on the Developing Child at Harvard University, Ohio State University Crane Center for Early Childhood Research & Policy
The Struggle for Families
The Cost to Businesses & the Economy
The Benefits for Everyone
The Cost
to Businesses & the
Economy
Elise: a parent in the workforce
While her partner also works full-time, Elise works for a local restaurant to bring in a second source of family income—which is necessary to cover Eddy’s childcare expenses.
Though her employer views childcare as the employee’s individual responsibility, the reality is that by not supporting Elise and other working parents and caregivers – it hurts the restaurant’s bottom line. It costs the restaurant to backfill or work short-staffed when caregivers have to miss work days due to childcare breakdowns and to replace staff if they have to quit because of childcare issues.
$840 billion of economic output lost
Because of the muted participation of women in the workforce, the U.S. loses billions of economic output annually.
$13 billion per year of lost productivity
While post-pandemic times have certainly aggravated this, before 2020, inadequate childcare was already costing employers billions per year in lost productivity.
A substantial subtraction of the workforce
With a shortage of childcare options, many families are forced to shoulder childcare themselves by leaving the workforce altogether.
And all of these losses bear disproportionate impacts
A crisis for women
The ratio of women who lost their jobs during the pandemic, relative to men, is 3:1. This reveals women to be the default, domestic caretaker—they are first to leave the workforce when lacking options and accommodations for childcare.
Magnified impact on those without degrees
Women without college degrees left work at twice the rate as college graduates, showing a decrease of women in the service sector and frontline working women.
Higher burdens for women of color
Compared to their white counterparts, Black and Latinx women left the workforce at higher rates during the pandemic—with Black women experiencing the highest rate of labor force decline.
Largely, private policies have stipulations in place to exclude workers with the most need which can weigh on the bottom line with high turnover costs.
Magnified impact on those without degrees
Women without college degrees left work at twice the rate as college graduates, showing a decrease of women in the service sector & frontline workers
Higher burdens for women of color
Compared to their white counterparts, Black and Latinx women left the workforce at higher rates during the pandemic—with Black women experiencing the highest rate of labor force decline, at 9.1% in 2020.
A crisis for women
The ratio of women who lost their jobs during the pandemic, relative to men, is 3:1. This reveals women to be the default, domestic caretaker—they are first to leave the workforce when lacking options and accommodations for childcare.
Magnified for women without college degrees
Women without college degrees left work at twice the rate as college graduates, showing a decrease of women in the service sector and frontline working women.
The struggle for BIPOC women
Compared to their white counterparts, Black and Latinx women left the workforce at higher rates during the pandemic—with Black women experiencing the highest rate of labor force decline.
And often when companies do have supportive parental leave policies, they are reserved for higher-paid employees, excluding the very people who need the support of childcare policies most.
On average, parents in the workforce with children under 5 are absent from work 13.3 days a year due to childcare issues and lack of supports like back-up care.
80% of small business owners supported congressional intervention to increase access to affordable care
It can cost an employer up to 4x a high-level employee's annual salary to backfill their position if they leave the workforce after giving birth.
Hang in there, Elise…
Parenthood will be tough for her and her partner—and hard decisions will have to be made, trading off expenses for childcare. Balancing caretaking duties with work can force Elise to show up late or cancel last minute, forcing the restaurant to work short-staffed and not operate at full-capacity. And this is an issue for many of the employees who are parents at the restaurant. Elise hopes management will see how it will ultimately benefit the restaurant to help their workers with childcare.
The Struggle for Families
The Cost to Businesses & the Economy
The Benefits for Everyone
The Benefits
for Everyone
This is Auggie.
They run a mid-sized tech start up. After finding this website, Auggie recognized the advantages their business has missed out on by not providing childcare and paid leave support.
For too long, companies like Auggie’s have been making decisions on childcare supports without the real data. Because on its face, childcare and paid leave look like an expensive cost for companies. But when we consider how these benefits help attract, retain, and engage talent, businesses can recoup almost all of the upfront costs—and ultimately spend less than they would to replace parents who don’t return to the workforce due to lack of childcare options.
We can’t afford to miss this.
Retain Your Workforce
93%
54%
of employees who take paid leave are more likely to return to work within 9-12 months.
of employers report that providing childcare services had a positive impact on employee absenteeism, reducing missed workdays by as much as 30%
Recruit Top Talent
88%
60%
of women with a child ages 0-5 who are looking for a job would more likely choose an employer with flexible hours, predictable schedule, & child care support
of businesses who reported that offering leave increased employee engagement, 58% attract talent, 55% retain employees
Thanks, Auggie
The changes they made to their company’s childcare policies will help their business thrive, retain workers, and also, it will enable employees, like Sara, to maintain their roles to provide for their families. And give Eddy the irreplaceable presence of both his parents—alongside quality childcare to support his growth through the most critical early years.
It's time we changed how we talk about care. It benefits workers, children, caregivers, and businesses alike.
Employers have a role to play in how they talk about & value care, which can lead to incremental and sweeping changes to support parents, caregivers, childcare workers, & children. Making small changes to the way we speak about care will spark cultural change in the way we value care and help move the needle forward towards more structural and policy supports of the care economy and all those who depend on it.
Daycare or nursery
Daycare or nursery
Undermines the role of early education from the ages of 0-5 years old and the importance of educators to propel positive brain development.
Early childhood education program
This language professionalizes the field to better represent the work of early childhood educators, emphasizing that learning happens as soon as a child is born.
Daycare worker
Daycare worker
Implies a role that watches children, omitting the important skills of education and teaching needed for this role.
Early childhood educator or teacher
Emphasizes the instrumental skills this role demands in nurturing children’s brains in a critical phase of development. This terminology also recognizes the demanding credentials, certifications, and continuing education needed to become an early childhood educator.
Taking a break from work
Taking a break from work
Implies that when someone takes a pause from the workforce, they are not working as a parent.
Career break
Recognizes the full-time job parents have as both employees and as caretakers.
Gap on the resume
Gap on the resume
Judged as a period where someone was not gaining skills or working in a traditional manner.
Pause from the workforce
Assumes that while someone might not have participated in the workforce, they were gaining skills and developing their learning in other ways.
Working parent or caregiver
Working parent or caregiver
Every parent and caregiver is working whether they are in the workforce or not because they work to raise their children. This term implies people only work when they’re employed, negating the work of raising our future generation.
Dual-working parent or caregiver
This term can be used to describe a parent or caregiver who works both at home raising children and ‘outside of the home’ in the workforce.
When my daughters grow up, I don’t want them to feel stigmatized or pitied for prioritizing their families and having work-life balance.
