Experts: Child care issues cost Iowa businesses millions each year

The ongoing child care crisis impacts more than parents and caregivers – it impacts the bottom line of Iowa’s businesses and industries, to the tune of hundreds of millions of dollars each year. That was just one of the many messages delivered by child care experts and panelists at a workforce and child care discussion hosted by the Catherine McAuley Center Dec. 7. Dozens of child care stakeholders attended the event, hearing presentations from state child care leaders and a group of local panelists. The meeting was led by Dawn Oliver Wiand, executive director of the Iowa Women’s Foundation, who outlined statistics demonstrating the gravity of the state’s child care crisis. Ms. Wiand noted that according to a February 2020 report from the National Chamber of Commerce Foundation:

• Iowa’s economy loses an estimated $935 million a year due to care issues;
• $153 million is lost annually in tax revenue due to the same issues; and
• Iowa businesses are losing $781 million a year because of child care-related absences and employee turnover.

“That is a lot of money that we're losing because of child care across our state,” Ms. Wiand said. The lack of affordable, available child care in Iowa also impacts businesses’ daily operations, Ms. Wiand said. According to the Chamber of Commerce Foundation report, 65% of parents are late to work or leave early because of child care issues, and in a six-month period, working parents miss an average of 4.3 days of work, and arrive late and leave early another 7.5 times in that same six-month period. An estimated 63% of parents say child care costs influenced their careers, the report showed, and 85% of millennials said they wish that their employer would offer some kind of childcare benefits. As a result of these issues, businesses themselves make financial decisions to meet their needs, including reducing local investments, outsourcing work to other areas, closing locations and relocating to communities where workforce needs are more readily available. “We know that businesses are losing employees because of the child care crisis, and the fact that there isn't enough child care out there,” Ms. Wiand said. “As a matter of fact, we have been in meetings just like this where we have had child care providers stand up and say they get calls every day from individuals that are thinking about taking an interview at a company in the area, and when and they find out that there is no child care, they turned down that interview. They're not even going to them because if there's no child care for their children, there's no point in them moving to that town or taking that job. We need to talk about child care and how it's not only impacting our families, but how it's impacting our businesses and our communities.”

Some improvement, but issues remain

Some measures have been implemented to improve the state’s child care situation. The IWF and Iowa Economic Development Authority have created a full-time employer engagement director position to work with businesses, advocates and communities working to make an investment in child care for employees, and a series of grants from state and federal sources have brought more than $1 billion to the table. Still, the needs are far from satisfied. There are nearly 520,000 children ages 0-12 in Iowa, and with just over 173,000 child care spaces available, there’s a child care shortfall of more than 346,000 spaces in the state. In addition, Iowa has lost 56% of its child care businesses over the past ten years. Child care workers are also some of the lowest-paid in Iowa, earning an average annual income of $22,320 per year, or $10.73 per hour – well below the national average of $13.31 per hour. And despite those low wages, a single-parent household spends an average of 40.7% of their income on child care, among the factors that make Iowa one of the nation’s most expensive states in which to raise a family.

Panelists bring personal perspectives

The Catherine McAuley child care event also included remarks from three panelists – Tim O’Neil of True North, Abby Freese of the Catherine McAuley Center, and Consuelo Steel-Cherry, director of We Care Daycare in Cedar Rapids – who shared their personal experiences in the child care realm. Mr. O’Neil said TrueNorth has moved its workforce to a new “responsible time off policy … so rather than having a fixed number of days that you have off each year, we believe that treating our workforce like adults, that managing their professional lives as well as their personal lives, and making sure that they're able to do a good job is really up to them and their manager and their team rather than the company saying “sorry, you don't have enough vacation, you can't deal with that child care issue.” Ms. Freese noted that many of CMC’s clientele find it difficult to find affordable child care, particularly providers registered with the Iowa Department of Human Services to accept child care assistance payments, as well as centers with workers that can speak the same language as the children in their care. “I always tell my clients that as a parent, I understand,” she said. “You have to feel comfortable with who's taking care of your kids. You have to feel like that is a safe environment for them. Because if you don't, you're not going to get anything done when you're at work. You're going to be thinking about ‘are my kids OK?’” Ms. Steel-Cherry said there’s a need for more in-home and community-based child care services at public spaces, such as churches and community centers. “A lot of people not only have to travel outside of their community to get some care, but they’re already providing transportation outside to go to work, so there’s nothing left in the community that I live in,” she said. “There's nothing there for me to do. So if we can bring in some more child care into the communities, that will be fantastic.”

More support needed from policymakers

Ms. Wiand highlighted a number of legislative priorities for the upcoming session, including investing in the education, pay and benefits for child care workers, providing tax cuts and incentives for child care providers, and identifying a sustainable public-private funding source to make child care more affordable for Iowa families. She noted, however, that despite invitations, there were no local, state or federal lawmakers in attendance at the meeting, so she encouraged attendees to reach out to policymakers and voice support for meaningful change. “We need to keep talking,” she said. “Use your voice. Let's support our child care workforce. Let's see what we can do for them, so people can go to work, our businesses can thrive and our communities can grow. The only way that's going to happen is if we have child care.”