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According to an April 2021 Harvard Business Review article, an estimated 50 million workers (one-third of the labor market) have a child under 14 in their household requiring childcare. When the 2020 COVID pandemic hit, parents–especially women–had to scramble to find affordable child care alternatives when schools and daycare centers temporarily or permanently closed.
Historically, trying times have helped shed much-needed light on systemic cultural or governmental flaws. Take the Great Depression, for instance. It laid bare the weaknesses in the banking and stock market industries.
Without that severe economic downturn, however, we might not have the protection of the FDIC to secure savings or checking accounts or the policies and agencies from the New Deal which cushioned and bolstered the nation. Runs on the banks and excessive unemployment rates of that era haven't been seen again in this country.
History is full of instances where problems were equally met with inventive and practical solutions that benefited humankind. Can America’s current crisis, exacerbated and exposed by the COVID-19 pandemic, turn into another example?
When children returned home from school in mid-March 2020, little did they know they wouldn't return for months (or a year). Childcare centers closed, too, or significantly reduced the number of children they cared for to avoid spreading the disease as much as possible.
State-mandated stay-at-home orders emphasized the importance of reliable remote-working and learning infrastructures, but something else as well—reliable childcare.
Closed schools left working parents with a dilemma: how to continue working while caring for children when the traditional school day was no longer an option.
An analysis of 2,500 parents revealed how a sampling of the parental population managed:
Essential workers with no options to work from home, single mothers and non-Caucasian females bore the biggest brunt of having their hours reduced or their jobs defunded altogether.
According to a National Women's Law Center analysis of 2020-2021 job reports, 2.3 million women left the labor market from February 2020-April 2021, making it the lowest participation rate for women since 1988. By comparison, 1.8 million men left during the same period. There are still 900,000 fewer workers today than compared to pre-COVID numbers.
According to an August 2020 Barron’s financial report estimate, lost job productivity related to school closures and lack of childcare would cost the U.S. at least $700 billion. That would translate to 3.5% of the GDP.
Before coronavirus, childcare insufficiencies reportedly cost working parents $37 billion in lost wages and $13 billion for employers in lost productivity.
While the recent labor pool has been extremely poor, consumer spending has been climbing and the economy reviving, but the U.S. GDP has not kept up. If the U.S. workforce had as many women as men, GDP output could potentially increase by 5%.
Unquestionably, childcare is a business issue, not simply a personal one. Childcare is a crucial part of increasing participation in the workplace.
Without a shift, the economy can’t realize its full potential, resulting in continued labor shortages, stalled supply chains, inflation and a lower GDP.
We do not have to sit idly by and do nothing, though. We have the power to create change starting in our workplace.
Hire and train workers with an employment gap
Be forgiving of employment gaps on resumes. Caring for young children is an admirable, tiring, thankless, payless job. Anyone willing to make the necessary sacrifice to raise the next generation should not be penalized for it. The same goes for caring for an ailing adult family member.
With an employment gap comes a skill-set gap. Be willing to train or help fund applicants’ or employees’ education to bring their knowledge and skills up to par.
Create available childcare
The most vulnerable labor populations are minority, single-parent women in the service industry, where working from home isn’t an option. Lay-offs or reduced hours due to a lack of affordable and available childcare could easily land this group and their children below poverty.
To offset rising costs, consider subsidizing employees' childcare expenses. This could be anything from paying a percentage of monthly childcare fees at any facility to paying a portion at a particular child care center and helping employees move ahead on the waitlist or even an allowance towards babysitters or daycare. Employers in the states of California and Massachusetts, for example, pay into a fund to be used by workers for any caregiving expenses for children or adult family members.
With preschool and daycare centers having waitlists, it might be easier to offer internal childcare to employees. With childcare right on-site, your employees will have more reasons to remain loyal to the company and productive during their work hours.
Adopt flexible schedules and remote work
Consider flex scheduling and remote work so parents can work while having more availability to oversee their children when away from school. The ability to take care of their kids after school lets out for the day, during teacher workdays, holidays or summer vacation would be a very attractive perk to any parent.
Nurture women in the workplace
Since women make up the majority of caregivers, having a place where they feel comfortable, valued and heard would motivate them to apply and stay in your company.
Community and a sense of belonging can be a make-or-break deal for employees. Build a workplace community with small, intimate groups where women can share, support, motivate and comfort each other.
COVID-19 may have worsened an already shaky childcare situation in America, but the story doesn’t have to end there. Make childcare a business issue.
With an estimated one-third of the U.S. workforce having at least one child under the age of 14, a labor shortage that shows no sign of bouncing back soon and lost profits, we can’t afford to ignore or underserve a large segment of the population balancing work and family.
Join The Ohio Society of CPAs (OSCPA) and Gloria Riviera, an ABC news correspondent and host of the podcast No One is Coming to Save Us, to explore this topic more in an empowering OSCPA Women, Wealth & Wellness Conference on July 21.
Costs to attend this special webcast are discounted with your accounting membership into The Ohio Society of CPAs and count towards your CPE credit classes. The OSCPA is committed to advancing the accounting profession to benefit the economy of Ohio and offers a wealth of information and trending news affecting businesses as well as quality education for accountants.