Inadequate Childcare is One of the Leading Causes of Lost Revenue — But It Doesn’t Have to Be

Let’s start with numbers: Annual lost revenue due to a lack of childcare amounts to a national average of $6.9 billion in taxes, $12.7 billion for businesses, and $36.9 billion for individuals. For states, this loss comes to a $2.7 billion total economic hit — $528 million from tax-based lost revenue and $2 billion for employers due to employed-parent turnover and sick days. The entirety of this lost revenue can be linked to unavailable or inaccessible childcare.

No parent should be denied the opportunity to make an income for their families due to a lack of childcare. And our economy could clearly do without the added strain. If you agree, keep reading. We’ll dive into some of the best solutions and make a plan to move forward together in the post below.

How Does Childcare Relate to Lost Revenue in Every State?

As mentioned above, lost revenue due to childcare has two root causes. The first of which is parents who leave the workforce and cannot return, either ever or for an extended period of time, due to not having proper care for their child(ren).

And in the majority of circumstances, this has nothing to do with a lack of effort. It may be caused by underpaid employees, a lack of childcare in the workers’ area, or recurrent childhood illnesses. 

Let’s look at a few examples to get the full picture:

• Marissa, a new mom of a three-month-old boy, is ready to return to work after her unpaid maternity leave at a local bank. She makes $18 per hour or roughly $2200 per month after taxes are taken out. The local childcare center’s infant room rate is $400 per week, leaving far less than enough to cover her bills if she were to return to work.
• John is a manager at an ad agency 45 minutes away from home. His job is more flexible than his wife’s, so he ends up taking 4-8 days off per month to care for their 2-year-old when she is sick (and consequently not allowed at daycare). He ends up losing his job, and his income, due to so many hours missed.
• Laura is a stay-at-home mom because she didn’t find childcare that didn't take the majority of her teaching paycheck. She now contributes far less to the economy both as a teacher and a consumer.

Each of these scenarios is all too common in our economy today. Statistics show that 27% of families who desire childcare have difficulty finding a spot. Rising care costs have led to a direct 13% drop in employed mothers. And 52% of the US’s working parents rely on the uncommon luxury of unpaid care.

The Solutions We’ve Tried

Providing mothers with opportunities to stay in or rejoin the workforce has been talked about for decades. Local and larger governments have attempted to make this possible through minimum wage increases and childcare assistance programs. Businesses have attempted to recreate post-WWII benefits packages to accommodate the fact that homebound wives are no longer the expected form of childcare.

Though each of these efforts is helpful, they’re not enough. They’re not getting down to the root cause of mothers and fathers unwillingly leaving the workforce. Therefore, they’re not solving the issue of lost revenue on every level.

The Solution We Should Be Focusing On

What is the simplest way to reverse lost revenue by allowing more parents to enter the workforce? Create an abundance of affordable and high-quality childcare seats in the communities that need them (which is everywhere, if we’re being honest).

By increasing available and cost-effective childcare, we can eliminate the main reason that parents leave the workforce. We can build successful in-home daycares and preschools, adding those to the economy at the same time. We can boost the next generation of employees and business owners through early childhood education, increased social skills, and access to age-appropriate curriculum.

At Wonderschool, this type of work is exactly what we focus on. We build a pipeline of attainable in-home childcares through one-on-one business support, curriculum development, and a nationwide marketplace. Our goal is to help every career-driven parent attain quality care for their child. With your help, we can make a mark on that childcare-related lost revenue, too. 

Contact us today, or simply click through our information on government partnerships. We’re looking forward to positively impacting the lives of kids and parents, as well as stimulating your local economy, together.

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