Child care isn’t just a parental issue. It’s a concern for employers, too.

The authors are members of the Children’s Leadership Council of Michigan, a coalition of business leaders committed to wise investment in early childhood initiatives. Doug Luciani, left, is CEO of TraverseCONNECT, Rob Fowler, center, is president and CEO of the Small Business Association of Michigan, and Kevin Stotts is president of Talent 2025.

Finding affordable, quality child care – especially infant and toddler care – is nearly impossible for many families. This matter deeply affects children, parents and employers.

We write as members of the Children’s Leadership Council of Michigan (CLCM), business leaders committed to wise investment in early childhood initiatives that make a difference in the lives of children and foster the talent that Michigan’s economy needs to thrive now and in the decades ahead.

And we write as chief executives of business organizations who represent thousands of employers, large and small, across Michigan. To put it bluntly, access to quality child care has become a huge obstacle to moving qualified employees into our members’ businesses and helping those employees thrive once they secure those jobs.

A recent Talent 2025 study on labor force participation in west Michigan concluded that the three biggest barriers to workforce participation for families with modest incomes are poor access to reliable transportation, inadequate job skills and lack of affordable child care. Talent 2025 does not mince words: without improvements to our child care system – including streamlining onerous regulation for child care providers – the effect on Michigan’s economy will be “devastating.”

Katharine Stevens, who leads the American Enterprise Institute’s early childhood program, states very clearly the importance of child care:

We need to pursue new approaches to build our nation’s human capital and ensure that all children have an equal chance to realize their full potential. High-quality child care that helps the country’s youngest, most disadvantaged children get a good start while enabling their parents to work is an especially promising strategy. Done right, it provides a powerful approach to breaking the cycle of intergenerational poverty and advancing opportunity for two generations simultaneously.

In our state, we face major obstacles to doing child care right.

Michigan families with incomes below 125 percent of the federal poverty level ($25,200 for a family of three) are eligible for a subsidy to help pay for child care. Michigan’s investment in the subsidy has fallen sharply in recent years, serving fewer than half of the children it served only ten years ago.  Our state’s restrictive eligibility threshold is among the very lowest in the nation.

Perhaps most disheartening, we deny tens of thousands of parents’ applications for the subsidy – and we’re not sure why.  (State government is now looking into this issue and we applaud these efforts.)

Why do we – as business leaders – worry about child care? Because these parents are an essential part of the Michigan economy. They work hard to make better lives for their families. The child care subsidy allows them to grow and prosper in their jobs and model good work habits for their children. An inadequate subsidy means that child care may be unaffordable, forcing some parents to quit work because it does not provide enough income to offset the cost of child care.  And taxpayers are short-changed because good child care is essential to helping parents become independent, working members of society.

Reliable child care is not just an issue for parents. When parents have a problem with child care and cannot get to work, this creates issues for employers. Shifts may end up understaffed. Employers may lose good employees in whom they have invested training dollars. In some regions of the state, unemployment has dropped to a level where many employers are struggling to find workers. A recent Crain’s Detroit Business article estimates that more affordable child care would “boost labor force participation for women by two percent” or 43,000 workers in Michigan.

Child care providers, which are themselves businesses, also feel the pain. The state, largely with federal dollars, pays the subsidy for lower income children directly to child care providers. But just as Michigan restricts the number of families who are eligible for the subsidy, so too does it keep subsidy payments to providers low. Here again Michigan is among the very lowest in the nation. Low subsidy payments force many child care providers to turn away children or go out of business altogether; in fact, we are seeing a significant decline in the total number of child care providers licensed or registered with the state.

And so the vicious cycle continues: even with the subsidy, many families cannot afford child care and many child care providers cannot afford to go into or stay in business. If the state were to increase the income threshold for eligibility for the subsidy and increase reimbursement to providers, we could begin to break the cycle. Fortunately, Governor Snyder has proposed to do the latter in his fiscal year 2017-18 budget proposal. We urge the legislature to support this.

Labor shortages are constraining our state’s economic growth. Our members feel the talent gap. Affordable, quality child care reduces a major barrier to getting people into the workforce. In this way, eliminating child care as a barrier to employment is an essential tool in any meaningful economic development strategy.

Editor’s note: The Center for Michigan, Bridge’s publisher, organized and provides staff assistance to the Children’s Leadership Council of Michigan. The CLCM exercises no editorial control over Bridge content.  

Bridge welcomes guest columns from a diverse range of people on issues relating to Michigan and its future. The views and assertions of these writers do not necessarily reflect those of Bridge or The Center for Michigan.

About The Author

Doug Luciani

Doug Luciani is CEO of TraverseCONNECT.

Rob Fowler

Rob Fowler is president and CEO of the Small Business Association of Michigan.

Kevin Stotts

Kevin Stotts is president of Talent 2025, a West Michigan nonprofit working to improve the quality and quantity of the region’s talent.

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Comments

Kevin Grand
Tue, 04/18/2017 - 8:07am

"Perhaps most disheartening, we deny tens of thousands of parents’ applications for the subsidy – and we’re not sure why.  (State government is now looking into this issue and we applaud these efforts.)

Why do we – as business leaders – worry about child care? Because these parents are an essential part of the Michigan economy. They work hard to make better lives for their families. The child care subsidy allows them to grow and prosper in their jobs and model good work habits for their children. An inadequate subsidy means that child care may be unaffordable, forcing some parents to quit work because it does not provide enough income to offset the cost of child care."

This argument is not that dissimilar to that made by businesses for wanting to bring in aliens to do the jobs "that Americans won't do."

These businesses are simply trying to use the power of government to cover their bottom line instead of adjusting their business models accordingly when it comes to compensating their employees.

I'd love to buy a large house in a nice neighborhood for $15,000 or a new full-sized car for under $3,000.

I'm smart enough to know that will never happen again.

The sooner Messrs. Luciani, Fowler and Stotts come to that same realization, the better.

MMP
Tue, 04/18/2017 - 9:33am

This could be easily rectified by having businesses run their own childcare. Simple solution to placement, payment etc. The biggest issue faced would be finding qualified workers to staff and paying them appropriately.

GD
Tue, 04/18/2017 - 8:21pm

Has been tried many times before. Liability issues alone kill these efforts after a while -- if they ever get off the ground. If enterprise child care really creates such tremendous values for employers by making staff more productive, why don't market forces work? Same problem why we hardly see firms run by women entrepreneurs staffed with underpaid women. Profits galore? No, these items are wonderful to have but someone must pay for it: increased business expense or taxes. Take your pick.

Rich
Tue, 04/18/2017 - 12:53pm

Several years ago, perhaps 15 or 20, I was one of thousands of employees for a company in southeast Michigan. With much fanfare and the construction of new buildings, they opened a state of the art childcare center for 3 month to 5 year olds, an employee fitness center, an office in a remote suburb for those that didn't want to do the commute to the main workplace but wanted all the office amenities that a home office would not allow, and special computer networks to allow work from the home. One by one these amenities disappeared as the downturn in the industry became more severe. During the rollout of all the amenities, it was stressed that the workforce was changing, and those that accommodated working parents would have access to a larger workforce because of these amenities. Should government pay? I don't believe they should. Can government dictate that these facilities be provided. Perhaps they have the right to do that.

duane
Tue, 04/18/2017 - 8:50pm

I wonder how TraverseCONNECT, Small Business Association, Talent 2025 address the issues of childcare, of transportation, of skill development. It would seem they have some practical experiences that could help readers better understand the practical aspects of each issue.