Event examines how child care challenges weigh on broader economy

A lack of access to affordable child care could prove to be a challenge for employers who want to bring workers back to the office and for the broader economy, according to a report discussed at an Arizona Chamber of Commerce & Industry event last week. 

Aaron Merchen, the director for policies and programs at the U.S. Chamber of Commerce Foundation’s Center for Education and Workforce, discussed these findings and more from the foundation’s “Untapped Potential: How Childcare Impacts Arizona’s Workforce Productivity and the State Economy,” released in 2021 by the USCCF in partnership with the Arizona Chamber. 

According to the report, Arizona’s estimated annual loss due to child care issues is $1.77 billion. That includes $1.42 billion for the cost of employee absence and turnover costs and $348 million in estimated losses in tax revenue. 

“These childcare breakdowns are preventing working parents from getting a promotion, finding that higher education, going to grad school,” Merchen said.  

The report also revealed that employers are starting to see childcare as a bigger issue for their workforce. One in 3 employers surveyed said that a lack of childcare was “a great deal responsible” for employees’ reduced productivity. Additionally, 65% of employers surveyed said that government incentives would most motivate employers to offer more child care assistance for workers. 

The ability to be flexible and increase the workforce in the childcare industry is something that Merchen said requires additional work. 

“The most effective childcare system will not be found in one-size-fits all solution, but rather a range of offerings that focus on addressing access, affordability, and quality,” he said. 

Michael Wisehart, director of the Arizona Department of Economic Security, discussed the fundamental ways the economy and the relationship to work have changed as a result of the pandemic. 

“One of the things we know, we can either have progress or we can regress, but we can’t go back to the way that it was before,” Wisehart said. 

Since the onset of COVID, Congress has sought to stabilize the childcare industry with an influx of Child Care and Development Fund money. Arizona-specific programs like the essential workers scholarship program have been working in tandem with the federal programs to ensure affordable childcare for Arizonans. 

“Because of the support, Arizona hasn’t seen a decline in the number of childcare centers,” Lela Wendell, assistant director of the Arizona Child Care Administration, said. “I think that speaks to the support that the state has given, because in other states that number has gone down dramatically.” 

Both Wendell and Wisehart spoke to the importance of the business community’s help in addressing challenges in child care. Whether by providing child care in the workplace, increasing partnerships at the university level for child care positions or issuing scholarships for those attempting to go back to school, the partnership between the government and the private sector is important for meeting the state’s child care needs. 

Creative thinking is needed. Few employers, for example, offer on-site daycare, reluctant to commit the time and resources necessary to ensure state licensure certification. Employers could, however, consider reserving slots in daycare providers specifically for their employees. 

“There’s a lot of things that are in the works for creating that framework,” Wendell said. “That’s where I think that engaging this (business) community will be super helpful.”

Taylor Hersch

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