"It's past time that we treat childcare as what it is — an element whose contribution to economic growth is as essential as infrastructure or energy."
That's how U.S. Treasury Secretary Janet Yellen put it in a recent report that details how our current child care system fails to adequately serve families. I couldn't agree more.
We know that child care providers are heroes. As the parent of a third-grader, a lifelong advocate for children and families, and the daughter of a single mom, I've seen firsthand how your child care provider becomes a partner in your child's earliest years, providing supervision, foundational educational and social experiences, and empowering the workforce our employers need.
When the pandemic hit, child care providers stepped up to keep front-line workers going. Our hospitals and health systems told us that one-third or more of their staff depend on child care access. It is not an exaggeration to say that access to child care meant the difference between life and death for their patients.
But the way the child care industry functions now puts parents and providers alike in a tough spot. On average, child care costs can consume up to 13% of total income for families with children under age 5 according to the Treasury report — at a time when parents can least afford it. For lower-income families in greater Minnesota, access and affordability barriers are even greater, with parents traveling significant distances or splitting up their children to find an available slot.
Families must choose between bearing these high costs or a family member leaving the workforce entirely to care for the kids. For single parents, there isn't a choice at all.
For providers, revenue primarily comes directly from families. Rising costs means raising prices; trying to keep costs low means low wages for a workforce that is predominantly women and disproportionately people of color. Staff must in turn choose between a future of low wages for skilled and demanding work or leaving the field entirely, creating a staffing crisis that is only exasperated by worker shortages throughout our economy and leading to closed classrooms or reduced hours. No one wins in this cycle.
The reality is that our economy cannot function without child care. That's why Gov. Tim Walz and I leveraged public funding and private partnerships to support families and the child care industry during the COVID-19 pandemic. This included prioritizing more than $300 million of investments early on to invest in supports for public health costs, access to child care, raised child care assistance rates and new business supports. Support is continuing with about $535 million in child care investments from the American Rescue Plan, with $300 million going toward child care stabilization grants.
Our long-term economic recovery relies on finding long-term solutions. As we talk to employers across the state, child care access frequently comes up as one of the top needs for addressing the labor shortages and skills gaps employers are wrestling with. Earlier this month, our administration announced the Governor's Council on Economic Expansion. When we talk about economic opportunity, I want us to be thinking broadly and creatively — and that means child care access.
But we can't fix this on our own. Federal investments that ensure low- and middle-income families can afford child care, as well as preschool investments that build up our mixed delivery system of center-based, school-based and family child care providers are investments we can't afford to not make. Additionally, paid family leave and continuing the child tax credit expansion help support working parents, reduce poverty and ensure all children thrive. These proposals — and more — are all part of the debate over the budget reconciliation bill that's working its way through Congress.
I know that President Joe Biden and Vice President Kamala Harris — as well as strong advocates in Congress like Sen. Tina Smith — understand the importance of child care, and I'm thrilled that Treasury Secretary Yellen is making clear the link between child care and our country's economic well-being. Minnesota is ready to partner with the federal government, child care providers, employers and families to build the child care system we need. Now Congress must act on these realities.
Peggy Flanagan is Minnesota's lieutenant governor.