The rising cost of America’s inaction on child care

In the fall of 2021, President Biden and Senate Democrats unveiled an ambitious child care policy agenda, designed to dramatically increase the number of working families eligible for subsidy support from the federal government and cap copayments at no more than 7 percent of annual household income. The plan was heralded as a game changer by child care providers, whose tenuous business model keeps many teetering on the edge of financial ruin, and by parents — many of whom pay as much or more for infant care as they do for housing or in-state college tuition.  

Ultimately the proposal, like most of the Build Back Better Act, failed to garner sufficient bipartisan support to advance through Congress — owing in part to its hefty price tag. As proposed, the act’s child care provisions alone were projected to cost $100 billion over their first three years of implementation.

While there’s little doubt that resolving America’s child care crisis will be costly, the debate begs an important related question: What is the cost of our continued inaction? 

The answer became a little clearer last month, thanks to a new report from Council for a Strong America’s Ready Nation. The group’s most recent analysis suggests that a lack of affordable, high-quality child care costs the American economy $122 billion annually (nearly a quarter more than Build Back Better’s proposed investment over a three-year timeline), with the bulk of these losses accruing to parents themselves in the form of lost wages and more time spent looking for work. What’s more, the report focused exclusively on the parents of children aged birth to three, leading the study’s lead author, Dr. Sandra Bishop, to describe its topline findings as a “gross underestimate” of the crisis’ true economic impact. 

Alongside its economic findings, the study lays out a sobering portrait of the productivity of America’s working parents. Sixty-four percent of parents surveyed reported both arriving late for work and having left early as a result of child care challenges. Nearly 60 percent report having missed workdays in their entirety, while more than half report being distracted at work. Perhaps not surprisingly, these challenges often correlate with workplace discipline, with 30 percent of parents reporting that they have been reprimanded as the result of a child care access challenge and nearly one quarter having been terminated from their employment altogether.  

The resulting financial losses not only affect parents during the moment but also impact their long-term earning potential. Parents reported declining promotions and new job offers, as well as an inability to participate in work-related training and continuing education likely to improve their compensation. All told, parents miss out on $78 billion in foregone wages annually — which contributes, in turn, to supplemental losses to their employers ($23 billion in lost productivity) and taxpayers ($21 billion in lowered income and sales tax revenues).  

What the report doesn’t even begin the contemplate are the additional benefits of investment in children during their most formative and critical years of development. High-quality early care and education have been linked not only to an array of improved academic and life outcomes but to diminished utilization of costly public services, ranging from educational remediation to social services and even interactions with the criminal justice system.  

There are some glimmers of hope emerging from the U.S. Capitol. Despite a pronounced partisan divide over Build Back Better, a group of 15 Republican senators led by Sen. Tim Scott (R-S.C.) recently filed legislation that would reauthorize the nation’s Child Care and Development Block Grant (CCDBG) amid sponsors’ calls to double the program’s funding over a five-year period. In December, Congress made measurable progress toward this goal, enacting a 30 percent increase in discretionary spending on CCDBG under the leadership of Sen. Patty Murray (D-Wash.) — which the senator’s office estimates could provide child care subsidies for up to 130,000 additional American families. It bears noting, however, that this $1.86 billion infusion represents only one and a half percent of the annual loss to the American economy estimated by Ready Nation. 

The bottom line is that even an investment far exceeding the administration’s original Build Back Better proposal is likely to reap more savings to taxpayers than costs. High-quality child care is an investment America can’t afford to ignore.

Javaid Siddiqi, Ph.D., is president and CEO of The Hunt Institute. With over two decades of experience in education, he previously served as a teacher, principal, school board member and Secretary of Education for the Commonwealth of Virginia.