Report: Inadequate child care prevents women’s full participation in the workforce and slows economic recovery

ReadyNation’s July report, Female Labor Force Participation Is Key to Our Economic Recovery, cites new data revealing the extent to which the COVID-19 pandemic has disproportionately impacted women’s employment, with female workforce participation at its lowest rate in more than 30 years. Returning women to work is key to our nation’s economic recovery, as female labor force participation contributes $7.6 trillion to the U.S. GDP every year. Lack of child care drove women’s exodus from the workforce and exacerbated the challenges of an already distressed child care system — and strengthening such services can help reverse this corrosive trend.

The business leaders of ReadyNation have supported greater investment and transformation of the child care system for years and the pandemic has elevated their concerns to new heights. In Illinois, our network of business executives has encouraged and applauded such responses as state Child Care Restoration Grants, drawing on hundreds of millions of dollars in federal aid to help thousands of struggling providers cover their expenses and remain in business. More recently, Illinois officials have acted to curb child care co-payments for families with earnings below the federal poverty level, help households retain care for longer periods of time, and bolster providers’ reimbursement rates. Plus, the pandemic coincided with the studies of a bipartisan, statewide commission Gov. Pritzker named to make long-term recommendations for improving Illinois’ early childhood system — suggestions we should begin to pursue more concretely through legislative, administrative, and state-budget work.

Working women’s struggles remain some of the core concerns of these child care challenges, as our new report illustrates.

Nationally, from February 2020 to February 2021, 2.4 million women left the workforce, compared to 1.8 million men. Although employment rates have increased in recent months, women still lag behind men, and projections indicate that female employment may not rebound to pre-pandemic levels until late 2024, about 18 months later than projected for males.

In Illinois, 40 percent of working moms who were employed at the beginning of the pandemic were out of work or saw reduced hours as a result of COVID pressures. Pandemic-related child care demands created additional economic and career hardships for mothers who continued to work, particularly for women of color.

In a survey conducted by the Illinois Economic Policy Institute, of Illinois mothers who continued working during the pandemic, 55% worked fewer hours, 54% earned less income, and 60% reported that their job performance suffered. Among mothers of color still employed, more than half passed up work-related opportunities due to pandemic-related school and child care closures compared with 39% of white respondents.

Many families have had to make hard choices by compensating for income losses by delaying rent or mortgage payments, spending less on food, pulling from savings or retirement accounts, delaying medical treatments, and increasing credit card debt.

In our ReadyNation Illinois report issued in March 2020, we found that even before the pandemic, the child care system was inadequate to meet the needs of children and their families, given a lack of availability, high costs, and quality challenges. The pre-pandemic cost to Illinois for having an inadequate child care system exceeded $2.4 billion, impacting parents, businesses and taxpayers. Significantly, these costs were specific only to infant/toddler care. In order for mothers to return to the workforce and re-establish hard-earned gains in employment and economic equity, we must increase investments in child care.

A new ReadyNation national survey of more than 400 senior business leaders found that, while about two-thirds of employers are likely to expand child care supports offered to their employees post-COVID, many cited barriers to doing so. Moreover, businesses alone cannot solve the child care crisis. Employer incentives must be coupled with robust public investments, including stronger subsidies for families with low incomes and direct assistance to child care providers. For our economy to stabilize and thrive, access to affordable, quality child care for working families must be a paramount concern; this is one aim of the Illinois Early Childhood Funding Commission’s recommendations, and greater federal assistance can help our state transform its system of early care and education. Business leaders and policymakers must continue to partner to address the child care crisis and return women to work, and ReadyNation is proud to participate in these critical efforts.