Child Care Solutions Can Lead to Greater Workforce Availability

Jul 11, 2019

How is child care connected to workforce shortages? In more ways than you might think.

Workforce availability is the top concern we hear from member businesses. While there is no silver bullet to solving this, coming at the issue from many angles can lead to a better future for our region’s workforce.

As today’s parents know well, child care can be quite expensive. For some families, it’s only an option with child care assistance from the government. The assistance allows parents to work outside of the home while also filling an open position at an area business.

Let’s say things are going great for a working parent receiving child care assistance and they are offered a promotion along with a wage raise. This may seem like solely positive news, but that’s not always the case. Very often, once a parent accepts the wage raise, they are no longer eligible for child care assistance. Rarely is the wage raise high enough to bridge the income gap to afford child care costs. Rising income triggering a cut off from child care assistance is known as the child care cliff effect. When a bigger loss in resources happens due to a promotion or raise, this may discourage people from staying in or even entering the workforce.

The Economic Alliance is advocating to see increased access to quality and affordable child care and allow more employees to enter the workforce. We’ve long supported workforce and education policies that promote career readiness skills and high academic standards that better align with the workforce needs of tomorrow. In 2019, we added a new item to our public policy agenda to address the child care cliff effect.

Along with the cost of child care, the shortage of child care providers also impacts workforce availability and productivity. Business leaders from across the country focused on the nation’s child care crisis and its effects on the economy during a recent briefing on Capitol Hill. We recognize this as a growing challenge in our region as well.

We’ll continue to advocate to raise the eligibility for the state Child Care Assistance program to a significantly higher percentage of the federal poverty level, which is where it sits now. We’ll also advocate to federal lawmakers to continue to fund the Child Care and Development Block Grant.

To meet more immediate needs, we are partnering with the Iowa Women’s Foundation and Linn County’s Early Childhood Iowa program. A series of Child Care Solutions Workshops with business leaders, lawmakers and child care providers later this summer will work to address the child care and workforce challenges in our community.

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