New Jersey Can’t Recover Without Women in the Workforce
Jill Johnson, Co-Founder and CEO of the Institute for Entrepreneurial Leadership (IFEL), discusses how child care is essential to economic recovery in New Jersey
As we attempt to rebuild the American economy after the devastation of the COVID-19 pandemic, one obstacle to recovery is a depleted workforce. As of June 2021, nearly half of New Jersey small businesses reported job openings they couldn’t fill. The pandemic has disproportionately impacted working women, especially women of color and mothers of infants and toddlers. In New Jersey, unemployment insurance claims filed by women rose 70 percent, compared to only 10 percent for men. But why? According to a recently released ReadyNation report, a lack of accessible, high-quality child care has played a major role.
While women have seen increases in workforce participation over the last 30 years, the pandemic sent female employment rates lower than those during the Great Recession. Nearly seven percent of New Jersey mothers have left the labor force as of December 2020, double that of fathers. The child care crisis has been especially hard on parents of infants and toddlers, with 19 percent of mothers with children under age 3 having left the workforce during the same time period. And there could be broader economic implications for employees of the nearly 280,000 women entrepreneurs in New Jersey operating pre-pandemic.
Parents faced the question of how to take care of their children while they worked and were left without any answers. Since the start of the pandemic, the child care industry has lost one in six workers, burdening an already struggling sector of the economy. This child care crisis could have dire consequences, with projections suggesting that New Jersey could lose $1.7 billion annually if parents of infants and toddlers don’t have access to the high quality child care they need.
Unfortunately, current estimates show that the road to recovery will stagnate if women aren’t able to reenter the workforce, as slower growth in female labor force participation caused an estimated 70 percent of the slowdown of employment growth seen during past economic recoveries. And slow growth is what we’ll see if the child care crisis is allowed to continue, as experts project women won’t rebound to the same rate of labor participation of pre-pandemic rates until 2024, 18 months after the male labor force rates are projected to return to normal.
Fortunately, there is a path to solve the child care crisis in New Jersey. If the problem keeping women from reentering the workforce is a lack of accessible and affordable high-quality child care, then part of the answer is for policymakers to use the emergency relief federal funds to sustain the child care sector. This investment can be achieved through subsidies to working families to help pay for child care tuition, improving compensation to our essential educators by setting market rate reimbursement rates when providing subsidized care, and by using funds to improve child care facilities.
These investments will reap massive dividends not only while we recover from the COVID-19 pandemic, but also for the future of New Jersey’s economy post-recovery. By funding high-quality child care, we are enabling more parents to participate in the workforce. This investment will also lead to better outcomes for future generations of workers in New Jersey, as children who are supported early in life are better prepared for success as adults. Better access to affordable, high-quality child care can also help to narrow the educational achievement gaps that affect children of color and children from families with low income, leading to a more diverse and successful future workforce.
Investing in access to affordable, high-quality child care should be a top priority so that we can rebuild New Jersey’s economy post-pandemic and safeguard its future.
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