BOSTON — The lack of child care options in Massachusetts is costing families, businesses and the state government more than $2.7 billion a year.
That’s according to a new report from the Massachusetts Taxpayers Foundation, which says that working families are losing an estimated $1.7 million a year in lost wages from not being able to show up for work because they can’t find or afford child care services.
Meanwhile, employers are losing an estimated $812 million a year in productivity and worker turnover because of the shortage of childcare options, according to the report, while the state government is missing out on $188 million a year in tax revenue.
Compounding the lack of options are changes in workforce dynamics and other factors that have seen fewer people looking to work in the child care industry.
“Massachusetts has both a child care problem and a workforce problem, which both need to be addressed to support an economic recovery from a global pandemic,” said Eileen McAnneny, the MTF’s president. “An affordable and accessible child care system can help us overcome our workforce challenges, promote economic growth and support Massachusetts’ reputation as a top state in which to live and work.”
The report cited data from the U.S. Chamber of Commerce showing that 63.4% of parents miss roughly 14 days of work a year due to child care issues.
In Massachusetts, that translates into to an estimated $457 million in lost earnings for about 112,000 wage workers with children age 5 and younger.
About 8% of parents have had to move from full-time to part-time jobs because of child care issues, according to the report’s authors, which equates to more than 20,000 working parents in Massachusetts reducing their hours permanently, with $1.2 billion in estimated lost wages.
About 35,000 parents with children under age 5 have left the workforce during the pandemic, costing employers approximately $563 million a year in extra rehiring and retraining expenses, according to the report.
The report also highlights how child care in Massachusetts is becoming increasingly unaffordable for working families.
The average cost of infant care is $21,000 a year in Massachusetts, the most expensive state in the nation, only behind Washington, D.C., and well above the national average of $15,888. That’s more expensive than tuition and fees at some four-year colleges, the report notes.
Child care costs for toddlers are not much lower, according to the report, averaging $15,095 a year, according to the report.
Many child care centers are financially strained after reopening because they were shut down in 2020 to prevent the spread of the coronavirus, and advocates say low compensation and the rising costs of caring for children are putting some providers out of business.
Meanwhile, care providers are struggling to retain workers in an industry where the pay is traditionally low and the risk of getting COVID-19 elevated, advocates say.
Children age 5 and under are still not authorized to receive the COVID-19 vaccines — leaving them vulnerable to infection.
On Beacon Hill, Gov. Charlie Baker and lawmakers are pushing to expand state funding to deal with the shortage of options and shrinking workforce.
House lawmakers approved a $49.7 billion budget Wednesday that calls for spending $70 million to increase salaries for early education and care providers who accept state subsidies. The plan also calls for updating a state law to allow child care facilities to be paid based on student enrollment, not daily attendance.
Amy O’Leary, executive director of Strategies for Children, a Boston-based advocacy group, said it’s crucial for the state to invest more in early education and child care.
“Decades of research has shown that high-quality early education benefits young children, families and our communities,” O’Leary said. “Over the past two years the connection to our economy has been made even more clear.”
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@northofboston.com.
