Biz leaders: Pennsylvania’s child care crisis is costing the state and employers billions

Business leaders from across the Commonwealth of Pennsylvania have called on the Shapiro administration and the General Assembly to address a child care access and affordability crisis that costs the state and employers billions of dollars every year.

“We have heard from our member-employers from across the Commonwealth how the lack of accessible and affordable childcare is hampering their ability to hire because potential workers can either not find childcare or afford it,” the leaders of more than 50 business organizations told policymakers in a May 30 letter.

The effort, spearheaded by the Chester, Delaware and Westmoreland Chambers of Commerce, comes as lawmakers and the Democratic administration embark on a 30-day effort to pass a new state budget.

The “overwhelming support” from the chambers across the state, along with the backing of the Pennsylvania Economic Development Association, a statewide trade group, “reflects the severity of the childcare crisis and its impact on the business community through both the workforce and the economy,” organizers said in a statement.

The commonwealth ranked 37th nationwide for the affordability of its childcare, with Pennsylvanians devoting 18.6% of their salaries to defray the costs, according to an analysis by the financial literacy site GoBankingRates, which used a combination of data from the Economic Policy Institute, the U.S. Census Bureau and the U.S. Department of Health and Human Services to arrive at its findings.

Laura Manion, the president and CEO of the Chester County Chamber of Business & Industry, said she experienced that sticker shock first hand when her son was born in 2022.

“Prior to undertaking this effort, my knowledge surrounding the childcare shortage was not experiential, but rather, came from the U.S. Chamber of Commerce’s data, which cited the statistics of millions of employees, mostly women, who were unable to return to work post-pandemic due to the lack of  childcare,” Manion said in the group’s statement.

[For further reading: “WFH, childcare, unemployment and mental health: How the pandemic is changing the workforce for women“]

“It wasn’t until the birth of my son in 2022, coupled with hearing from employers in the CCCBI membership struggling to recruit and retain staff, that I saw my personal experience as just one piece of a multifaceted threat to Pennsylvania’s economy,” Manion said.

Shapiro’s proposed $44.4 billion budget for the new fiscal year that starts July 1 “provides investments up to $66.7 million in childcare services for low-income families, an increase of $30 million for the [state’s] Pre-K Counts program, and $2.7 million in funding for the Head Start Supplemental Program to help address staffing shortages in early childhood education programs,” according to an administration summary.

The Democratic governor devoted a portion of his sprawling March 7 budget address to the childcare challenges facing the state’s families, noting that “we can’t ignore the fact that it’s hard for moms and dads to get to work in the first place if they don’t have affordable child care.

“In any given year, over a third of Pennsylvania parents report that child care problems impacted their job,” Shapiro noted in a transcript of his address published by the Pittsburgh Post-Gazette, adding that the state is further hobbled because “we don’t have enough child care professionals.”

As of the time of his address, the state had nearly 4,000 unfilled child care jobs and 38,300 children on waitlists, Shapiro said, according to the newspaper, adding that “if those jobs were filled, we could make sure nearly every child on that waitlist had a spot. We have kids ready to learn, parents ready to work – we just need more teachers and professionals on the job.”

In their letter to Shapiro and legislative leaders, the business organizations proposed a quartet of reforms and solutions.

They include:

• Legislation “[creating] a tax credit for employers who furnish employee childcare in the amount of the employer’s cost in furnishing employee childcare;
• “Expanding the Child and Dependent Care Enhancement Program. Last year’s budget included funds for up to 30% of childcare-related expenses that filers claim on their federal return. This program is meant to support working families by lessening their tax liability. A total of $24.6 million went into the program for last FY and is now a permanent fixture of the state’s tax code. However, expanding the program will allow more middle-income parents to return to the workforce;
• Addressing retention and recruitment: “Proposals potentially being considered during the current state budget negotiation to offer rebates/incentives for nursing, teaching and policing jobs should be  extended to the childcare community. Hiring incentives would be a great first step to address the ongoing issue of low wages ($12.43/hour statewide average) currently paid to childcare workers being a disincentive to join this critical field,” and
• Regulatory reform: “The Chamber community is advocating that any future regulatory proposals must ensure proper stakeholder input from childcare providers with special consideration to infant care. In addition, any changes do not lead to increased costs for providers,” the business groups wrote.

“As the sole chamber of commerce within Delaware County, with over 1,200 employers as members, we have been hearing from our membership about the lack of childcare and impact to the workforce,” said Trish McFarland, the president of the Delaware County Chamber of Commerce.

“As a working mother of three children, I can attest first-hand that this struggle is real,” McFarland said. “We have worked hand-in-hand with our members in the childcare industry on bringing awareness to their various hardships.”

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