A lack of child care options is costing Montgomery County millions and the state billions each year, according to a recent study showing the impact limited child care has on the state and local workforce and economy.
The Indiana University Public Policy Institute and Early Learning Indiana teamed up last spring to look into the economic repercussions on the state and businesses from child care related disruptions. The findings were released in June.
Montgomery County was one of three rural economies, including Jackson and Parke counties, assessed in the study. Three urban economies — Elkhart, Marion and Vanderburgh counties — were also used in the study. Indiana was compared to the economies of Louisiana and Maryland.
For Montgomery County, the study shows losses of more than $4.9 million each year in economic activity due to child care related employee absenteeism and turnover, and $808,670 in tax revenue losses.
“When I look at that study it tells me we’re leaving a lot on the table,” Crawfordsville Mayor Todd Barton said. “Lost productivity that could be regained if we were to start addressing this shortage, or this challenge that we have. I think those numbers are very significant for local companies and very significant for our local economy.”
Jackson County shows losses of more than $7.5 million in economic activity and Parke County is losing more than $2 million each year.
According to the study, parents with children under the age of 5 miss an average of 13.3 days of work due to child care issues and an additional 2.8 percent quit their jobs to address child care needs. As a result, it’s costing Montgomery County employers more than $7.8 million each year after paying wages to absent employees along with pay for overtime or temporary employees and costs from reductions in productivity. And when an employee quits, employers spend more time and resources to find, hire and train new employees.
Local officials and employers have already began searching for answers.
“We’ve started a workforce group and we’re starting to sort out some solutions on a local level for our workforce challenges,” Barton said. “When we’ve tried to identify the root causes, it’s very clear that child care rises to the top of that list and that it keeps a lot of people out of the workforce. Right now, I think the biggest role for us is to foster this conversation and lead this conversation among our area employers.”
Barton said the local Workforce Development Roundtable group has created a subgroup to address the lack of child care issue. Because local employers aren’t big enough to address the problem on their own, their collectively looking for a solution.
One option is for businesses to fund child care together, though Barton said there hasn’t been any commitments yet. Barton also said they’re working with groups like Early Learning Indiana to help identify potential funding sources.
“In some cases, the government can apply for some grant funding, so we’re really investigating that,” Barton said. “But really we are just working to create that public-private partnership and bringing all of those employers together at the same time to discuss this really important issue.”
At the state level, the study estimates Indiana losses nearly $1.1 billion in economic activity due to employee absenteeism and turnover. The child care related disruptions cost the state an additional $118.8 million in lost tax revenue and the study shows Indiana employers have direct costs of nearly $1.8 billion.