Prior to our special Chamber Briefing: Childcare at 11 a.m. on Feb. 28, the Seattle Metro Chamber’s team is providing a quick report on this important industry and how it impacts your business and our economy. Ready to dig into this issue?

See the recording here.

The Problem

In 2022, the Child Care Collaborative Task Force of the state’s Department of Commerce published The Mounting Cost of Childcare report, and concluded that the demand for affordable, quality childcare far outweighs the current supply.

  • Parents with children under the age of 6 represent 15% of the state’s workforce.
  • In 60% of those households, all available parents work.
  • More than 300,000 children under the age of 6 need childcare.
  • Washington state childcare supply falls short of demand by about 40%.

According to Child Care Aware, that deficit in supply, along with increasing operating costs because of state Quality Rating Improvement (QRI) requirements, drives the cost of childcare up and out of reach for many Washington parents.

  • Since 2010, the median cost of childcare increased by 13%-20% for center-based care.
  • Median incomes rose by 5% during that time.
  • The annual share of income spent on childcare for a two-parent household with one infant in a childcare center is 15.4% and 53.2% for a single-parent household.
  • In Washington state, parents pay more on average for childcare than parents in all but two other states.
  • The average cost per infant at a Washington childcare center is about $14,440 a year.

In most cases parents can expect to pay more than the annual cost of tuition at Washington’s public universities. This assumes that parents can even find care, which is in many cases is difficult or impossible. In a parent survey Seattle Metro Chamberistered by the state task force, half of the respondents said they found no childcare openings near school or work.

Employee Turnover = Employer Costs

Childcare determines workforce participation. According to the task force’s report, in 2019 18% of employees with children quit their jobs and 9% reported being let go, citing childcare issues as a major factor in these events.

When employee turnover goes up, so do employer costs.

  • A study from Eastern Washington University found in 2019 Washington employers incurred $2.03 billion in costs related to employee turnover or absences caused by childcare issues.
  • That cost expands beyond employers – the study estimates childcare access issues cost the state’s gross domestic product $6.5 billion that year.

Childcare and early learning are essential in preserving our current workforce and preparing the future’s workforce.

Childcare Workforce: Underpaid and Overworked

Despite the large price tag for parents, most childcare providers are barely able to pay minimum wages to employees, because of required Quality Rating Improvement costs and low state subsidy reimbursement rates.

As a result, the childcare workforce is consistently underpaid, undermining recruitment and retention efforts and further constraining supply.

  • The taskforce reported in 2021 the turnover rate for Washington’s caregiver workforce was 43%.
  • In 2021, the National Association for the Education of Young Children reported 81% of respondents to a nationwide childcare provider survey said it was as or more difficult to recruit and retain qualified educators than before the pandemic.
  • That percentage increased among respondents representing centers that are minority-owned or serve families that need financial assistance.
  • Most respondents identified insufficient wages and benefits as the primary reason for their staffing challenges.

Exhaustion and burnout lead to turnover as well, and for centers experiencing staffing shortages those problems increase for the remaining caregivers, and negatively affect the quality of the program.

Proposed Solutions

In 2022, the Child Care Collaborate Task Force presented “The true cost of quality child care in Washington,” a set of recommendations to improve accessibility and affordability for families and sustainability for providers. The task force said solutions to the childcare crisis must follow a public-private model:

  • Adopt a new model for the Working Connections Child Care childcare subsidy rate-setting based on cost-of-care estimations, living wages and cost of program enhancements.
  • Distribute relief payments to childcare programs and providers to supplement wages.
  • Supplement wages and benefits of the entire licensed childcare workforce (not just those who serve subsidized children) with public funds beyond Working Connections Child Care subsidies.
  • Develop a comprehensive strategic plan for supporting the growth and sustainability of the childcare workforce and sector, ensure a continuing pipeline of trained childcare professionals into the future.

Join us for a briefing on solutions at our special event, Chamber Briefing: Childcare at 11:00 a.m. on Feb. 28 via Zoom.