A North American road to the middle class
Using the market, not tax dollars, to expand on-site childcare
One of our nation's greatest challenges is finding the workers we need to keep our economy rolling. Many business leaders tell me this is their greatest concern. At the same time, we are driving many women out of our workforce by failing to provide the childcare services they need to hold onto their jobs. It is estimated that between 20 percent and 35 percent of women in the U.S. never return to their previous job after becoming mothers.
Much of this is due to a lack of accessible, affordable childcare. Today, only 11 percent of all civilian workers in the U.S. receive childcare assistance from their employers. And only 7 percent have access to on- or near-site childcare. Yet, both employers and employees report that on-site childcare is among the most valued benefit for workers. The reasons are obvious:
On-site childcare gives parents proximity to their children, allowing them to check on their kids during breaks and respond quickly to a child's illness or injury. On-site childcare hours can match the specific working schedule of the company, giving more flexibility and security to working parents in a wide array of industries.
On-site site facilities also provide back-up care that is necessary during school holidays and weekends or in family emergencies. Additionally, workers report feeling more at ease and better able to concentrate when their child is in care near their workplace. This reduces absenteeism and increases retention, lowering turnover costs for employers and increasing productivity for employees.
A number of U.S. companies have made on-site childcare a priority, and both they and their workers are reaping the benefits. At Patagonia, the outdoor clothing retailer, the rate of staff turnover for working parents who have their children enrolled in the company's on-site childcare program is 25 percent lower than for their workforce as a whole. Fully 85 percent of Patagonia employees take advantage of the program. Home Depot, which has 264 children enrolled in the on-site childcare program at its headquarters, believes on-site care is a "competitive advantage." The company reports that job candidates ask about it during interviews, and parents who join the company and sign up gain "peace of mind" that leads to better performance.
Burns & McDonnell, an engineering, construction, architecture and consulting firm based in Kansas City, opened a 20,000-square-foot childcare center that will help the company reach its goal of a workforce that's one-third female. Clif Bar & Company, maker of organic foods and drinks, has had on on-site childcare facility since 2010. Largely as a result, the company has only a 5 percent employee turnover rate.
With the benefits of on-site childcare so clear for both workers and employers, the government should do what it can to promote greater access to such facilities. But public resources are severely limited. Largely because of the tax bill passed last year, we are facing annual deficits of more than a trillion dollars.
So how about using that good old capitalistic concept - the power of the market - to incentivize the private sector to provide more on-site childcare? After all, the federal government is the world's biggest customer, spending trillions on goods and services each year. What if it gave a small preference to those suppliers who provide on-site childcare for their workers? This could create hundreds of thousands of new, on-site childcare slots without costing taxpayers a dime.
That's the concept behind the Child CARE Act, which I recently introduced in Congress. It would incentivize employers to invest in on-site childcare by providing a preference in government contracting for those who do so. This preference would apply to both civilian and defense contracts of more than $4 million. By providing a small advantage in federal contracting to those companies that offer on-site childcare services to their employees, we could use the power of the competitive marketplace to help accomplish that worthy goal.
Taking this step is clearly in our national interest. On-site childcare benefits both working parents and American businesses, making us more competitive in the global economy where the quality of our workforce is the key to success. We must work to incentivize this critical employee benefit to help millions of working families and the U.S. businesses that need those workers. With workers and companies clamoring for on-site childcare, it's a concept whose time has come.
Raja Krishnamoorthi, formerly the president of two small businesses, represents the 8th District of Illinois.