How Public-Private Partnerships Can Help Working Parents with Childcare Challenges

During the past few years, childcare has become a hot topic for parents and guardians, especially in light of the COVID-19 pandemic. Even in today's remote-first work environment, working parents still face barriers to accessing affordable, high-quality care for their children. 

During this installment of The Drumbeat, Aaron Merchen, Director of Policy and Programs at the U.S. Chamber of Commerce Foundation, spoke with Charles Aull, Executive Director at the Kentucky Chamber of Commerce, about the importance of public-private partnerships in addressing childcare challenges and offering childcare options to working parents.

Childcare Challenges Typically Fall Into Two Categories: Availability to Affordability

Aull broke down childcare challenges into two different buckets: availability and affordability.

“[It’s a challenge] just simply finding access to childcare, but then even once you find access to childcare, particularly when it's higher-quality childcare … then you run into the affordability issue.”

For instance, in Kentucky, the general annual cost of childcare ranges between $6,000 to $11,000, while the state’s median household income is around $55,000 per year. 

“If you are a parent with, say, two kids [or] three kids, particularly if they're younger, that could amount to a tremendous amount of money,” he said. “That is something that's gonna discourage folks from being able to participate in the workforce.”

House Bill 499 Has Helped Address the Affordability Issue of Childcare

Aull spent time doing research and talking to employers and professionals in the childcare advocacy space to find ways to address the affordability issue.

“One of the solutions we came up with was to work on incentivizing more employers to offer childcare in some form as a benefit of employment,” he said. 

While some employers offer onsite childcare, that perk is expensive and difficult to implement.

“We were thinking more along the lines of, how could we help more employers do things like offer a stipend [or] a lump sum to help that particular employee just simply afford childcare,” he said. “So just as we offer things like health insurance or maybe tuition reimbursement, what can we do to get more employers to offer things like that in the childcare space?”

As a result, House Bill 499 was born, allowing each state to match the employer contribution on a dollar-for-dollar basis — up to 100% of the cost of care for that particular worker, Aull explained.

“[House Bill 499] gives that employer the ability to essentially double the size of their employee benefit and also gives that worker or that parent in that situation a very large chunk of cash they can use to offset the cost of childcare and really bring that cost down to a much lower level,” he said.

Legislators and Policymakers Must View Childcare Challenges as Current Issues, Not Future Problems

Aull noted that the development of House Bill 499 involved a lot of trial and error.

“I think that's going to happen anytime you're creating a new innovative state policy, and it's probably gonna be a learning experience for us as we go throughout the process,” he said. 

“I think a lot of [policymakers] grasp the concept of the long-term impacts of early childhood education and the effects that that has on early childhood development and what that means for our future workforce,” Aull continued. “However, a lot of employers are facing workforce shortages right now, and I think there are very few public policy issues that you can touch that have the immediate effect as something like addressing childcare challenges has.”

According to Aull, in Kentucky, an estimated 40,000 to 55,000 parents are out of the workforce due to childcare-associated challenges. 

“I think [we must get] legislators and policymakers to understand this is not just solving a future problem in the sense that it's gonna help us develop our future workforce,” he said. “You're solving a problem that's occurring right now.”