Blog | Event | February 2, 2023

New Report Shows Growing Economic Toll of $122 Billion Due to Infant-Toddler Child Care Crisis

A new ReadyNation report shows that the crisis costs the national economy $122 billion every year—a figure that has more than doubled since 2018

Policy inaction and the COVID-19 pandemic have caused the damage wrought by the infant-toddler child care crisis to more than double in just the past four years. The crisis now costs businesses, parents, and taxpayers $122 billion nationwide in lost productivity, earnings, and revenue every year. Worse, this problem will continue to grow unless policymakers address the fragile infrastructure of the child care sector.

That was the top-line message from a stunning new report, “$122 Billion: The Growing, Annual Cost of the Infant-Toddler Child Care Crisis,” released by ReadyNation at a Capitol Hill briefing yesterday.

The event panel included two prominent ReadyNation members, Katie Ferrier, Vice President, Education & Workforce Development, San Antonio Chamber of Commerce, and Jack McBride, Founder and CEO, Contec Inc., of Spartanburg, SC. They joined Sarah Puleo, parent of three young children and a former early childhood teacher in Beaver Dam, WI, and report author Sandra Bishop, Ph.D., Chief Research Officer of Council for a Strong America, to release the report. Fortune senior writer Megan Leonhardt moderated the panel discussion, and Council for a Strong America President & CEO Barry Ford offered introductory and closing remarks.

The new report shows that a lack of access to affordable, quality child care costs the economy $122 billion each year, a sharp increase from the $57 billion annual toll ReadyNation found in 2018. Of note, this $122 billion figure is only for the lack of care for children aged 0 to 3, speaking to the immensely devastating effects that the weakness of the child care sector creates.

Sandra Bishop began the discussion with the key findings from the report, painting a harrowing picture of the worsening state of America’s child care infrastructure, and the impact of that weakness on our economy.

“These economic impacts not only harm parents, but also employers and taxpayers,” she noted, detailing the costs to each as a result of the crisis. Bishop also highlighted how the problem has gotten worse over the past four years, pointing out that “the reasons for the increased impact are, basically, COVID and insufficient policy action. The child care industry was decimated by COVID, with providers closing, many temporarily and a significant number permanently.”

“The child care workforce is now seven and one-half percent smaller than it was pre-pandemic; that’s nearly 80,000 fewer child care providers nationwide. The child care industry was already very fragile pre-pandemic; the situation is far worse now and it is costing our economy billions every year,” she added.

What’s more, the speakers explored the reality that the effects of the crisis are “two-generation” in nature, harming working parents and businesses today, while children miss out on the research-proven positive effects of quality care that will prevent them from reaching their maximum potential in the future.

Katie Ferrier stressed that point in her remarks, noting that “the infant-toddler child care crisis has a magnitude of impact on two generations. Parents struggle to go to work or school without access to affordable, high-quality child care creating economic implications for their families, but their infants and toddlers also miss out on the research-proven benefits that high-quality child care can provide.”

Ferrier pointed to the importance of policymaker support to address the key challenges of the infant-toddler child care crisis: insufficient access, a lack of affordability, and not enough quality.

Jack McBride underscored Ferrier’s comments about the two-generation nature of the problem, citing the research-proven, lifelong benefits infants and toddlers can reap if exposed to quality early supports. “The skills children learn in quality child care programs can set them up to excel in school, and, as jobs get more and more complex and technologically advanced, businesses will need highly educated and well-rounded employees to succeed,” he explained. “We need to prepare our children for the workforce of tomorrow, and high-quality child care for infants and toddlers can help forge the first steps on that path toward success.”

McBride echoed the call for policymaker action as a way to reverse the growing damage caused by the crisis, saying “In order for us to truly solve the infant-toddler child care crisis, we need support from policymakers. At the federal level, there are proven, bipartisan solutions such as strong investment in the Child Care and Development Block Grant and pro-parent tax policies.”

Sarah Puleo provided a different-but-vital perspective as a parent of three young children and a former early childhood educator. She shared her personal story of not only witnessing the crisis as a provider, but also as a parent who ultimately had to leave the workforce because there were no viable child care options.

“As the others have said today, the child care crisis is a challenge that harms more than just working parents and their young children. I’ve seen that firsthand as a mother who also happens to have worked for a child care provider,” explained Puleo.

“What’s also important to remember is that, if we don’t deal with the crisis now, not only will its damage increase, but we’ll be feeling those effects for decades to come.”

Full video of the event may be found below

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