The nation’s child care system is largely broken — and nearly every family has had to bear the brunt of the consequences. From juggling shifts to matching costs and commutes to determine child care options, families have struggled for decades to patch together child care that meets their needs. At the same time, employers have often struggled to recruit and retain talented workers simply because they cannot secure child care. The need for quality, affordable, convenient child care is a national challenge that requires partners across government, communities, and businesses to develop solutions. The private sector is uniquely positioned to play a role as a supporter, disruptor, and innovator on such solutions.
Most forward-thinking businesses know that child care is an economic issue impacting the ability of U.S. businesses to be competitive. Almost every American family, regardless of income, faces challenges when it comes to finding reliable, quality child care.
Child care doesn’t just affect certain parents at a certain stage of their career, but does affect almost all employees at some point. Unmet child care needs negatively impact workplaces through increased costs from absenteeism and turnover. When child care falls through, it impacts companies through lost productivity as employees struggle to juggle work with parenting responsibilities.
A recent study from Goldman Sachs found that 84 percent of small business owners surveyed believe it has been difficult for working parents to afford high-quality child care programs for their children. A similar study by the Small Business Majority found a lack of affordable child care is hindering small business growth, and small business owners are strongly supportive of legislative solutions that would address the high cost of care and expand access.
But it isn’t just small businesses that are impacted by lack of child care. Major corporations, states, and the federal government are innovating to create more access to child care.
For example:
- Mazda's manufacturing plant in Alabama offers child care assistance as a recruitment perk. Offering to cover 30 percent of costs up or $250 per month makes their overall benefits package more attractive in a competitive hiring market. In the first year it was offered, attrition dropped by 11 percent overall and 20 percent among women
- UPS, in partnership with Patch Caregiving, offers workers on-site child care if their typical child care option falls through.
- Kentucky creatively funded child care for all licensed child care center staff, regardless of income, to help address staffing shortages. With many child care centers paying a lower hourly wage than fast food or retail, this added benefit of child care was the necessary boost to increase and stabilize the workforce.
- New federal actions created a $50 billion fund in the CHIPS and Science Act to jumpstart the nation’s semiconductor industry, and in 2023, the U.S. Department of Commerce announced companies applying for a federal grant had to provide a plan for offering child care to their workers. Intel, Micron and other major corporations are winning these grants and building child care into all their workforce expansion plans. Their solutions range from building onsite child care centers to offering discounts at local centers and priority enrollment for employees.
The W.K. Kellogg Foundation’s work is centered around helping children and families thrive. To that end, we partner with businesses and other organizations and communities that are increasing opportunities for families to have both quality child care and competitive jobs.
We know that child care centers themselves make up an oft-overlooked business sector. The vast majority of child care centers are small businesses. The Kellogg Foundation recently invested in Mission Driven Finance’s child care real estate investment trust fund, Care Access Real Estate (CARE). CARE purchases, renovates, and leases houses and centers to child care providers as a child care-friendly and socially just landlord so they can expand to serve more children and families. The fund also shares half of any appreciation profits with tenants to help providers purchase their facility from the fund. To date, the fund has raised $10.6 million in total investor capital and invested $8.2 million in properties to be used by child care providers across two states. This type of investment is critical to bolstering the child care system because it addresses needs that the public sector cannot—in this case, providing the real estate to grow child care businesses.
This kind of thinking about how to strengthen the sector as a whole will make child care easier to access for all families in the United States, regardless of income.
When businesses make child care a priority, through financial support, advocacy, or partnerships, it benefits not only employees but the bottom line and the economy. The Kellogg Foundation is proud to partner with the U.S. Chamber Foundation to advance this work and continue supporting innovative solutions that address this widespread challenge in creative new ways.
About the authors
Jon-Paul Bianchi
Jon-Paul Bianchi is a senior program officer at the W.K. Kellogg Foundation.
