The Massachusetts economy loses an estimated $2.7 billion each year because working families can’t afford or find childcare, according to a report released Thursday by the Massachusetts Taxpayers Foundation.
Just over 60% of that money is lost wages from parents who don’t work, and 30% of that is lost to employers through reduced productivity and cost of sales. The nonpartisan public policy organization’s report says the average cost of infant care in Massachusetts is $21,000 a year — the most expensive in the nation. Experts say continued state and federal support is needed to support providers and reduce childcare costs.
Problems with childcare and its high costs are causing parents to miss work, switch from full-time to part-time jobs and some leave the labor market altogether, the foundation found.
“If you have a kid and live in the city of Boston, you’re paying tuition,” said William Eddy, executive director of the Massachusetts Association of Early Education and Care. “If you’re making $75,000 a year in Boston and a third of that goes towards your Paying for childcare costs and then along with your rent and food — you know it’s really taking a toll on your ability to lead a quality life. ”
If just 10% of stay-at-home parents with young children were able to return to full-time work, the report estimates the economy would gain $859 million in wages and $33 million in tax revenue.
With the staffing shortages plaguing providers, tackling the high cost of childcare becomes even harder.
“So many of our early education programs across the state have closed classrooms that if they could actually hire staff, we would actually allow us to take on more children,” Eddy said.
Amy O’Leary, executive director of advocacy Strategies for Children, said when providers were forced to close early in the pandemic, many have not reopened, causing thousands of children’s spaces to be lost.
At the Guild of St. Agnes in Worcester, executive director Ed Madaus credits state and federal subsidies to attract needed workers. He added that many of his employees are re-entering the job market, so aren’t taking them away from competing providers.
“We’re giving $2,000 in incentives to join us and we’ve increased our salaries by over 30% in the last few years,” Madaus said. “We still have to hire more people, so we’re doing everything we can to attract people.”
But Eddy said the state’s family childcare grant program isn’t reaching the majority of people who need it most. He pointed to a report released by the state last month that found only 17% of families eligible for subsidies are currently receiving them.
“That’s right, in short, the problem we’re having right now,” Eddy said. “Some families spend an extraordinary amount of their income on childcare because they could not get a subsidy. They either couldn’t navigate the system or couldn’t find a coupon – or vendors in their area just didn’t offer a coupon because they’re understaffed and classrooms are closed.”
Madaus and Eddy both said they were encouraged by the recently released House of Representatives budget, which earmarks $110 million for early childhood education and care. O’Leary added that it can’t come soon enough.
“Programs have probably held it together for a long time, but that doesn’t mean they’re going to be sustainable for the next six months,” O’Leary said.
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