Child care shortage holding back workers & economy

Economic and Housing Update

COLORADO SPRINGS, Colo. – Of the five million jobs estimated to be open across the United States, 126,000 open positions in the child care and early childhood education fields are proving to be some of the heaviest weights dragging the economy down, according to Ph.D. economist Tatiana Bailey.

“This was an issue even before the pandemic because child care is incredibly expensive. A lot of the child care industry, some of those workers have just decided to leave the workforce all together,” Bailey said.

There can be several reasons, Bailey says, like workers’ own children, working conditions, and pay.

The average pay for child care workers compared to different cost of living scenarios in El Paso County, according to Tatiana Bailey.

The average salary for child care workers is $26,460–compared to the cost of living for a single-parent with one child in the county of $61,651. This leads Bailey to wonder if more lucrative careers enticed the workforce elsewhere.

She points to raising wages in the industry as somewhat helpful, but that only adds to the cost of an already expensive commodity for parents.

“There’s really no great surprise that we have the shortage that we do in child care,” she says. “If you’re making 12-15 dollars an hour and your child care costs at least that much….you can see why people are making the decisions that they are.”

The benefits of child care was an issue Bailey and her associate studied in 2019 in research initiated by the Legacy Institute in Colorado Springs.

Her hypothesis: What would happen if the local government spent $13.5 million to provide child care or early childhood education to solely four year olds?

Bailey found 10-15 percent more parents deciding to work with their incomes generating $3.5 Million in revenue. The working parents meant $12.5 million of welfare costs, in food stamps and other programs, were not paid out and saved, and combined to a $16 million return, or 19 percent.

“In the study that we did, I took the most conservative estimates and yet, the return on investment was always in the double digits.” Bailey noted.

Bailey says the returns were greater when federal income tax revenue was included.

She also notes the outcomes for the children that would be enrolled in the child care programs. She says those students miss less school, are more likely to graduate high school, and pursue some form of education after K-12 education.

“Remember that you’re often pulling families out of poverty when you’re doing this. So, if you put aside all of my financial rational fore this, the other side of that is the quality of life and often, the quality of life of the children, increases,” Bailey said.

She believes this research has a added importance now, as the U.S economy remains sluggish coming out of the pandemic, haggard by a low labor participation rate.

She says that she believes that it’s time for governments of all levels to consider providing early childhood education and child care and that there is a great opportunity for private-public partnerships to help fund low worker salaries, create child care in work spaces, or find other solutions to fill the gap.

“I don’t see any way around it,” Bailey said. “If we had early childhood education and infant and early child care in general, we would be able to be more competitive in the global economy, simply because we have more workers.”

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