Brief | April 14, 2021

Want to Strengthen Michigan’s Economy? Fix the Child Care Crisis

Impact of child care challenges felt by families, employers, and taxpayers

The shortage of affordable, quality infant-toddler child care imposes substantial and long-lasting economic consequences; its effects are felt by parents, businesses, and taxpayers. The top-line findings of ReadyNation’s 2019 study examining the economic impacts of gaps in our nation’s infant-toddler child care system describe the consequences. The verdict: an annual economic cost of $57 billion in lost earnings, productivity, and revenue nationwide.

Michigan’s Gross Domestic Product (GDP) represents roughly 2.5 percent of the nation’s GDP and Michigan’s population represents roughly 3 percent of the nation’s total population. That suggests that the lack of reliable child care for working parents of young children, up to age 3, could come to $1.4 billion in annual costs for Michigan.

The stakes are enormously high for the vast majority of Michigan families, who depend on parents’ employment. The stakes are high as well for infants and toddlers, who depend on nurturing, stimulating environments both at home and in care for healthy brain development during the first three years of life. Michigan employers also have a stake, given the costs that accrue to them as a result of inadequate infant /toddler child care. Simultaneously increasing subsidy provider reimbursement rates and the child care eligibility threshold for Michigan families will help to remedy this serious issue Action, innovation, and investment in both the supply and demand of infant and toddler child care now will improve life outcomes for millions of children today and strengthen the Michigan workforce and economy both now, as we recover from the pandemic, and in the years to come.

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