It's no secret that Americans are struggling to keep up with the cost of living, even as the rate of inflation slows this year. But for working parents paying out of pocket for
The Department of Labor estimates that child care can take up to 19% of an average family's income per year and per child. In a country where maternity and paternity leave are not guaranteed and child care is only getting more expensive, this leaves U.S. workers and the economy in a precarious position, and one that the Biden administration is making an effort to address.
With an eye on bringing semiconductor manufacturing back to the U.S., the U.S. Department of Commerce announced that any semiconductor manufacturer requesting over $150 million in federal funding must submit plans on how the company will provide affordable and high-quality child care for their employees. The Creating Helpful Incentives to Produce Semiconductors Act, better known as the CHIPS Act, hopes to reduce outsourcing, but could serve as a blueprint for how the government and employers can work together to build a better child care infrastructure.
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"Certainly over the last several years, we have seen an increased interest in manufacturing organizations wanting on-site child care centers," says Stephen Kramer, CEO of Bright Horizons, a child care provider for employers. "It's becoming increasingly difficult for employers to attract and retain employees, especially in locations where manufacturers are located, which tend to be child care deserts."
While this isn't the first time the government has stepped in to provide funding for child care — notably, the government spent today's equivalent of $1 billion during World War II to provide working mothers with affordable child care — the CHIPS Act makes it clear that this issue is finally being recognized by lawmakers as a way to strengthen the economy, underlines Kramer.
In fact, the Economic Policy Institute suggests that by limiting child care expenditures to just 10% of a family's income, the increase in women's participation in the labor force alone could boost U.S. GDP by $210 billion. This would be the antithesis of what occurred during the pandemic, which resulted in over a
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While the pandemic did lead to state-wide child care assistance, most programs will expire this year. For example, in California, low-income families pay a fee to receive subsidized child care, but saw that fee waived over the last few years. This waiver ends in June. In Oklahoma, Human Services has been covering 100% of the co-payments parents pay for subsidized child care — that will come to an end in October.
"[CHIPS] is a wonderful win for employees and their children," says Kramer. "It highlights the importance of employer participation in child care needs and the increasing challenge that working parents have in the area of child care, both from an affordability perspective, as well as from an availability perspective beyond the pandemic."
The CHIPS Act is a dash of hope for federal-funded child care as pandemic-induced safety nets come to an end. However, Kramer asks
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As for what the child care solution should look like, Kramer advises employers who have the funds or fall under the CHIPS Act to consider providing an onsite child care center. That way, a company's unique work hours and routines can be built into how the center functions, and parents can be more focused on work knowing their child is nearby. Most importantly, employers should listen to what their working parents need from their caregiving benefits; no workplace is the same, underlines Kramer.
"We have seen employers take note of the government's ambition here, and start to proactively think about child care," he says. "But ultimately, that is less because of what the government has done in particular, and more because they're hearing from their employees."
