Chamber Business NewsFor years, employers and working parents have understood the practical challenges created by a shortage of affordable, accessible child care. New research and polling suggest those challenges are increasingly becoming something else, too: an economic issue with growing political salience.
The numbers help explain why.
A new national poll from the First Five Years Fund finds that more than eight in 10 likely voters — 82% — consider the cost of childcare part of the nation’s broader concerns with the cost of living. More than three-quarters, 76%, say the cost of care for families with young children is either a crisis or a major problem.
For parents who actually pay for childcare, the issue is even more immediate. Asked to identify the two biggest cost pressures they face, 38% named childcare, putting it virtually even with groceries at 40% and behind only housing at 56%.
Those findings come as new data illustrate the size of the challenge here in Arizona — and recent economic research makes the case that childcare isn’t simply a family issue but increasingly a workforce and economic competitiveness issue as well.
Arizona families feel the squeeze
Arizona is home to more than 481,000 children age 5 and younger, according to the First Five Years Fund, and 62% have all available parents participating in the workforce.
For those families, care can represent a significant household expense. The annual price of center-based childcare in Arizona is $16,384, or about $1,365 per month. Home-based care is less expensive, but still averages $9,339 annually, or $778 per month. FFYF estimates a 17% gap between the supply of childcare and potential need in Arizona and puts the annual economic impact of the state’s childcare challenges at $3.3 billion.
Those figures align with research from the Common Sense Institute that found Arizona’s supply of licensed child care providers has declined dramatically even as the state’s population has grown.
Arizona had 5,126 licensed childcare providers in 2002. By 2024, that number had fallen to 2,779 — a 46% decline. Meanwhile, the median daily cost of licensed center-based infant care increased from $43.03 in 2018 to $61.40 in 2024.
The problem is especially acute in some rural areas, but it isn’t confined to them. CSI found that even Maricopa County has licensed capacity sufficient for only about 13% of its infant population.
A workforce issue hiding in plain sight
For the business community, perhaps the most consequential aspect of the childcare debate is its effect on the labor force.
When parents cannot find care, cannot afford it, or cannot find care that accommodates their work schedules, the consequences eventually reach employers. Workers may reduce their hours, turn down jobs or promotions, miss shifts, or leave the workforce altogether.
The latest polling suggests the effects extend well beyond parents themselves. Nearly 40% of all voters surveyed said their own ability to work is affected by coworkers’ childcare challenges. Almost half of working parents said childcare challenges affect their ability to work, and one in five parents with young children said those challenges frequently do so.
CSI attempted to put an economic value on addressing that problem.
Its analysis estimates that making childcare sufficiently affordable and accessible could draw between 15,500 and 87,800 additional Arizonans into the labor force. Under CSI’s midpoint scenario of 50,000 new workers, the effects ripple well beyond those individuals: The modeling projects 131,700 additional jobs by year five, approximately $17.5 billion in additional state GDP, more than $13.5 billion in additional personal income and an estimated $188 million in additional state income tax revenue.
Those are significant numbers in a state where employers regularly identify access to talent as one of their most important considerations when deciding whether to expand, relocate or invest.
Political salience is growing
None of this means there is an obvious policy answer.
The childcare market presents a particularly difficult economic equation. Care is expensive for parents while wages for childcare workers remain comparatively low. Providers operate in a labor-intensive business with narrow margins, and regulations intended to ensure children’s health and safety can also increase operating costs and create barriers to adding capacity.
CSI’s research cautions against viewing increased subsidies as the only answer. It points to regulatory reform, expansion of home-based and alternative models, and policies that encourage more providers to enter the market as ways to increase supply and put downward pressure on costs.
But what does appear to be changing is the political environment surrounding the issue.
The FFYF poll found broad support for several basic objectives: 83% support ensuring that parents can choose the type of childcare that works best for their family, 73% support lowering monthly child care costs, and 71% support expanding the supply of care. Nearly half of Democratic voters surveyed said congressional Democrats should work with Republicans and President Donald Trump to pass childcare legislation.
That is noteworthy at a time when affordability is likely to remain central to the political conversation.
Housing, groceries, energy and other household expenses tend to dominate discussions about the cost of living, but for many families with young children, childcare increasingly belongs in that conversation, representing one of the largest bills they pay.
And unlike many other household expenses, the availability and price of childcare can determine whether a parent is able to work in the first place.
That makes childcare unusual in the affordability debate: Addressing it has the potential not only to reduce pressure on household budgets, but also to increase labor-force participation and expand the pool of workers available to employers.
This latest research suggests policymakers should expect childcare to command greater attention, not simply as a family issue, but as an affordability, workforce, and economic growth issue with increasingly significant political implications.
Image courtesy Creative Commons Attribution-NonCommercial 4.0 International License
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