Inadequate child care costs Montana businesses nearly $55 million a year in lost worker productivity, according to a new report from the Bureau of Business and Economic Research at the University of Montana.
Better access to child care would save the state’s economy $250 million a year while child care costs disproportionately burden lower-income families, thus perpetuating the cycle of poverty, the study's authors found.
“This is going to end up slowing down the country’s economic recovery until people can figure this out,” said Robert Sonora, the director of health research at the Bureau. “The key takeway from this study is the cost of child care for individual families is fairly substantial. For families with $30,000 annual income or less, 10% of their total income is spent just on child care.”
The Bureau partnered with the Federal Reserve Bank of Minneapolis and collected data from 404 Montana households with children ages 0-5 from January through April. The responses are weighted to reflect the statewide population of households with young children, and most responses were collected prior to the pandemic.
"One primary economic impact of inadequate child care on Montana families is the lost wages families suffer when parents have to miss work, switch from full-time work to part-time work or turn down a job offer,” the study concluded.
The survey found that 62% of parents missed time from work in the past year due to child care, 22% turned down a job offer and 26% declined to pursue further education or training. A total of 15% had to switch from full-time work to part-time work, and 12% had to quit their job in order to take care of children because child care costs were too high.
Parents in low-income households were more likely than those in high-income households to:
- Decline to pursue further education or training in connection with their employment (38% versus 21%)
- Turn down job offers (36% versus 12%)
- Change from full-time to part-time work (24% versus 10%)
- Quit their jobs (26% versus 5%)
American Indian respondents were more likely than white respondents to:
- Decline to pursue further education or training in connection with their employment (47% versus 24%)
- Turn down job offers at a higher rate (37% versus 22%)
- Quit their jobs (27% versus 10%)
Urban households were more likely than rural households to report greater difficulty in finding affordable child care, a finding that is supported by a Missoula Area Chamber of Commerce study that found "astronomical" child care costs here.
Taxpayers carry a major economic burden caused by inadequate child care as well, the report states.
"Specifically, the federal government and Montana state government obtain lower income tax receipts because of the wages parents forego due to inadequate child care,” the study’s authors concluded. "Taxpayers lose a total of $32 million dollars annually due to inadequate child care."
The federal government loses almost $23 million annually in lower income tax receipts, they found, while the State of Montana loses $9 million annually in income tax receipts. Taxpayers lose $1,260 annually per household with children ages 0-5, or approximately $700 per parent.
“Individual households are aware of how big this problem is, but I don’t know that all Montanans understand what that burden is,” Sonora said. “I don’t think they they grasp the size of this. The purpose of this study was to understand the impacts from 30,000 feet. If we want our families to be able to do well, we have a lot of work to do to address this.”
Kelly Rosenleaf, the executive director of Childcare Resources Inc. in Missoula, lamented the fact that the Republican-controlled state Legislature and Democrat Gov. Steve Bullock were not able to find a way to permanently fund pre-kindergarten education in the past session. Montana is one of only a handful of states without publicly-funded “pre-K” education programs.
“Most states have something for 4-year-olds,” she said. “It’s important for low-income and reservation communities. We would do well to invest in our youngest kids so we wouldn’t have to be investing so much in prisons and teen pregnancies. While policy-makers say they believe in children and taxpayers say it’s the most important issue, our investments don’t look like that. We give way more money to prisons than we give to children.”
Rosenleaf said research shows that investing in early childhood education reduces the likelihood that those kids will end up in prison, end up being on welfare due to poverty or get pregnant as teenagers.
She believes taxpayers would pay less in the form of reduced criminal justice and social welfare costs if the government were to invest more in early childhood education.
Her organization uses federal grants, administered by the state, to subsidize child care costs for low-income parents on a sliding scale.
“We serve over 500 families a month on that program, including students at the University of Montana or Missoula College,” she said. “We have a shortage of child care in Missoula County. We can meet about 43% of demand. In Missoula County, 70% of children under school age live in households with working adults, and we know how many licensed slots there are, so we know we can only meet 43% of demand.”
The lack of affordable child care is a “huge problem,” she noted, but one that’s fixable.
“We are the only developed country in the world without a paid parental leave policy,” she said.
Rosenleaf also noted that parents often have to pay $1,000 a month for infant care or $800 a month for kids over the age of 2. Despite that, child care workers are often not paid enough, especially with high housing costs in Missoula.
Vicki Olson, the director of the ASUM Child Care center on the University of Montana campus, said they have about 50 people on the waiting list. The center provides day care for children of students, staff and faculty. They might have openings for school-age kids soon, because Missoula’s public schools are moving to five-day-a-week in-class schedules soon.
They use scholarships to help subsidize child care for many students, she noted.
“Otherwise, many students would have to drop out,” she said.
To view the full report from the Bureau of Business and Economic Research, visit this story online at missoulian.com.
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