Report: Lack of Childcare Costs $2.7B | news
BOSTON – The lack of childcare options in Massachusetts costs families, businesses and the state government more than $2.7 billion a year.
That’s according to a new report from the Massachusetts Taxpayers Foundation, which says working families lose an estimated $1.7 million a year in lost wages because they can’t show up for work because they can’t find or afford childcare.
Meanwhile, employers lose an estimated $812 million annually in productivity and turnover due to a lack of child care, according to the report, while the state government loses $188 million annually in tax revenue.
The lack of options is compounded by changes in workforce dynamics and other factors that have resulted in fewer people wanting to work in the childcare industry.
“Massachusetts has both a childcare problem and a workforce problem, both of which must be addressed to support an economic recovery from a global pandemic,” said Eileen McAnneny, MTF President. “An affordable and accessible childcare system can help us meet the challenges of our workforce, fuel economic growth, and solidify Massachusetts’ reputation as a top state to live and work in.”
The report cited data from the US Chamber of Commerce showing that 63.4% of parents miss about 14 workdays a year due to childcare issues.
In Massachusetts, that translates to an estimated $457 million in lost income for about 112,000 hired workers with children under the age of 5.
About 8% of parents have had to switch from full-time to part-time jobs because of childcare issues, according to the report’s authors, which equates to more than 20,000 working parents in Massachusetts permanently reducing their hours, with an estimated $1.2 billion in lost wages .
About 35,000 parents with children under five have left the workforce during the pandemic, costing employers about $563 million annually in additional rehire and retraining costs, according to the report.
The report also highlights how child care in Massachusetts is becoming increasingly unaffordable for working families.
The average cost of infant care is just $21,000 a year in Massachusetts, the nation’s most expensive state, behind only Washington, DC, and well above the national average of $15,888. That’s more expensive than tuition and fees at some for four colleges, the report notes.
Childcare costs for young children are not much lower, according to the report, averaging $15,095 per year, according to the report.
Many daycare centers are financially strained after reopening after closing in 2020 to prevent the spread of coronavirus, and advocates say low compensation and rising childcare costs are putting some providers out of business.
Meanwhile, care providers are struggling to retain workers in an industry where pay has traditionally been low and the risk of catching COVID-19 is heightened, advocates say.
Children under the age of 5 are still not eligible to receive the COVID-19 vaccines, leaving them vulnerable to infection.
On Beacon Hill, Gov. Charlie Baker and lawmakers are pushing to expand federal funding to deal with a lack of options and a shrinking workforce.
House lawmakers on Wednesday approved a $49.7 billion budget that would see spending $70 million to increase salaries for providers of early childhood education and care that accept government subsidies. The plan also calls for updating a state law to allow childcare facilities to be paid based on student enrollment rather than day-to-day attendance.
Amy O’Leary, executive director of Strategies for Children, a Boston-based advocacy group, said it’s critical for the state to invest more in early education and child care.
“Decades of research have shown that quality early education benefits young children, families and our communities,” said O’Leary. “In the past two years, the connection to our economy has become even clearer.”
Christian M. Wade reports on the Massachusetts Statehouse for the North of Boston Media Group’s newspapers and websites. Email him at [email protected]