A 2023 study from the not-for-profit group Ready Nation revealed the negative economic consequences of unavailable childcare. The study analyzes how families, businesses, and taxpayers manage the costs of childcare and concluded that the U.S. loses a total of $122 billion in economic output every year due to unavailable childcare. This marks a significant increase from the 2018 study, which found that a lack of childcare cost the U.S. economy $57 billion annually.
The problem stems from instances where parents need to miss work because no one can watch their children. On average, where a family lacks sufficient childcare, each parent loses $5,520 in earnings per year. Additionally, businesses lose an average of $1,640 per year for each working parent they employ. The government also loses about $21 billion in lost income and sales tax revenues per year due to issues related to childcare.
When working parents do not have access to the childcare they need, their productivity begins to fall. This in turn costs their employers and ultimately taxpayers. 44% percent of working parents have needed to reduce their regular work hours due to childcare problems. Additionally, one-third of working parents reported having their hours or pay reduced by employers due to missing work due to childcare issues. Even worse, 23% of working parents in the study reported being fired due to childcare problems while another 26% of parents reported quitting a job due to childcare problems.
While the economic repercussions of a childcare scarcity may be mitigated through a variety of responses, employers can benefit from addressing the issue directly. For instance, employees might offer employees additional benefits such as schedule flexibility or even on-site daycare if feasible. Employers with low productivity rates among their employees, combined with high turnover rates, may be well served to accommodate employees’ childcare needs. Addressing this issue preemptively can reduce costs associated with ongoing hiring and training. Moreover, greater accommodation of employees’ childcare needs can improve not only workforce morale, but productivity as well.
If you have question or concerns regarding the connection between the U.S. economy and childcare issues, please contact the qualified attorneys at Rock Fusco & Connelly, LLC.