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In the nearly eight years that she’s been in business, Dawn Kelly has seen staff quit The Nourish Spot, the smoothie shop she runs in Queens and Brooklyn, many times because they couldn’t find good child care.
Sometimes it was because child care was too expensive, or because parents thought there weren’t enough quality options for their children. Whatever the reason, small businesses had problems retaining customers, an issue Kelly had to ponder as he considered expanding.
“We haven’t necessarily been able to hire everyone we wanted to hire. [child care] “The hours are so long that they can’t work when they need to,” Kelly said.
Most of her staff of 10 The collapse of the childcare systemthe cost is Too expensive for most peopleKelly empathizes: “A few years ago, she was a single mother working for Corporate America, grateful that her employer offered child care at work. But as a small business owner, she doesn’t have the funds to pay for it.”
“I know how they feel, I’ve been in that position before, so I try to work around their schedule,” Kelly said. “It’s important that council members understand that and make it easy for us to do business and make it easy for any agency to employ local residents.”
in A new study released ThursdayMore than one-third of small business owners say a lack of child care options in their community is preventing them from running or expanding their business, according to a survey conducted by Goldman Sachs’ 10,000 Small Businesses Voices program, which supports small business owners. The data was shared exclusively with The 19th for the first time.
Goldman Sachs conducted a mid-April survey of 1,259 business owners across 47 states, Puerto Rico and Washington, D.C., about their views on child care and its impact on their businesses. About 60% said there aren’t enough quality, affordable options in their area, which impacts their employees. About 35% of business owners said a lack of child care slots and high costs have forced employees to cut back on hours or quit their jobs altogether.
Another poll conducted earlier this year by the 85,000-member advocacy group Small Business Majority found that Similar findingsA third of businesses lost revenue and profits due to employee childcare issues. Nearly half experienced a drop in productivity. A quarter of business owners said they had to close their business due to their own childcare issues.
Sarah Littleling, executive director of the First Five Years Fund, an early childhood advocacy group, said she had seen a “surge” of employees being more open about childcare struggles, particularly since the pandemic began, and of employers stepping up to address the issue.
Child care costs have risen over the years, usually outpacing inflation each year. By 2023, child care will cost families $11,582 On average, that amounts to about 10 percent of the median income of a married couple and 32 percent of the median income of a single parent, according to Child Care Aware, a national advocacy group.
Small business owners told Goldman Sachs they want government help to expand their options, and as many as 77% would support increased federal funding for child care. Past polls have shown Similar findingsSmall business owners from all political stripes are calling for increased federal funding.
Many daycares and in-home child care providers are also small businesses, usually with slim profit margins. Federal funding to help those facilities become more sustainable could help other businesses, said Jen Legere, founder and owner of A Place to Grow, a child care center with three locations in New Hampshire and one in North Carolina. She is working with the Department of Labor to launch the first-ever child care center manager apprenticeship program.
“Child care is the workforce behind the workforce,” Legere said. “Unless we actually support the child care workforce, professionalize the entire workforce, and create career paths for them, we’re not going to be able to create more child care centers across the United States, increase capacity, and support our businesses.”
Some small business owners want to be part of the solution. Surveys show that 62% of business owners say that being able to offer child care benefits in the workplace would have a positive impact on recruiting and retaining top talent. To that end, 70% of business owners said they would support legislation that would increase business tax credits designed to help small businesses that provide child care services.
Currently, the federal government allows businesses to offer tax rebates of up to $150,000 to those who provide child care for their employees. But business owners surveyed said they would support increasing that amount to $500,000. The measure is currently before Congress. The bipartisan bill would: Child Welfare Investment Actwould be the first expansion of the tax credit since 2001.
Under the current tax credit system, a business needs to spend $1 million to qualify for the maximum $150,000 tax credit. Under the new bill, the refund would increase to a maximum of $500,000. Small businesses would get even more, up to $600,000. Businesses that spend less than $1 million would also get a refund of up to 60 percent instead of 25 percent.
Rep. Salud Carbajal, a Democrat from California who co-sponsored the bill with Rep. Lori Chavez Deremer, a Republican from Oregon, said the idea came from roundtable discussions with small business owners in 2022. When asked what the biggest issue affecting the future of their businesses was, many cited child care.
“I came back with my team and we thoroughly researched the area of childcare tax policy. And we found that the childcare tax [business] “The existing tax credit framework is good, it just needs to be modernized and updated,” Carbajal said.
The bill would also allow small business owners to work together to set up child care centers and receive tax deductions, a provision that does not exist in current law.
Starting up a new provider can cost hundreds of thousands of dollars, making it difficult for an independently owned business, but if all the stores in an area, such as a shopping mall or business development district, work together, it could be a solution for the community, Carbajal said.
Léger has already benefited from partnering with companies that provide care services. For the past three years, A Place To Grow has partnered with Harmony Home, a senior care facility in New Hampshire. Léger’s company runs a small daycare center on the premises. Harmony Home employees can leave their children at the facility, which is also open to local residents.
This solved some of the major challenges they faced when starting new daycare centers. Each time, it took about two years to raise funds and find real estate. The promise of the business partnership is that they can increase the overall supply of daycare, instead of trying to find more space in an overcrowded system. Daycare closures over the past four years have limited the number of slots available for children across the country. Waiting lists are often as long as For yearsCompanies that have tried Providing childcare benefits Typically, they create child care facilities in-house or contract with local child care providers, but these facilities may not be available to other members of the community because they don’t have enough space in the first place. Creating new options can help both groups.
“We need to build partnerships where we all work together to solve this problem together,” Legere said. “Companies need to step up and help with child care and [saying]”‘You need to grow.’ We can’t grow without you. You have to help us and support us.”
The Child Welfare Investment Act has more than 30 co-sponsors, including 31 Democrats and six Republicans, and is also backed by the U.S. Chamber of Commerce. The bill was introduced last July and is unlikely to pass this year, but Carbajal said the bill is gaining support and could be included in a tax reform bill expected to be introduced in Congress in 2025.
“This is an economic issue for our economy, for businesses to thrive. Businesses can’t hire, they can’t retain talent, they can’t expand,” he said. “I think this bill really gives businesses important tools to be more successful and address the big challenges that we’re all now aware of.”
For many years, child care has been a marginal topic in the national economic debate, but attention is finally being paid to its impact on parents’, and mothers’, ability to participate in the labor force.
In 2020, at the start of the pandemic, more women than men dropped out of the workforce. An unprecedented phenomenon in American historyOne reason was a lack of options for childcare. Many women To quit a job To take care of the children.
Currently, child care issues cost the U.S. economy an estimated $122 billion According to the Council for a Stronger America, a bipartisan nonprofit group of law enforcement and business leaders focused on family policy, businesses lose $23 billion a year in lost revenue and lost employment costs due to the loss of working parents due to inadequate child care. The U.S. government loses about $21 billion in income and sales taxes because parents who cannot afford child care generally earn less and spend less.
It’s an issue small business owners want candidates to discuss in this year’s election. About 55% of respondents to a Goldman Sachs survey said the issue wasn’t being addressed enough during the election campaign. A May poll by the First Five Years Fund found that a whopping 10% of small business owners said they didn’t think the issue was being addressed enough during the election campaign. 89 percent 80% of voters want candidates to have a plan to help parents access quality child care, including 80% of Republicans, 88% of Independents and 99% of Democrats.
Next week’s presidential debate will be the first test of whether the candidates are listening.
Moms First, an advocacy group that promotes child care and other family policies, Plea They called on CNN to ask President Joe Biden and former President Donald Trump about child care during the debate on June 27. “Now is the time for our leaders to make a bold commitment to mothers across the nation, and fixing our broken child care system is just the beginning,” the groups wrote.
But Kelly is skeptical. “I haven’t heard any of the candidates talk about child care at all,” she says. “Child care is fundamental to the fabric of our country, and it’s not just about small businesses. We should want to ensure that families are protected, insured, and in an environment where they can thrive. And that starts with our babies.”
