Child care is a critical part of the state’s economic infrastructure

With the state budget stalled because of disagreements between lawmakers and the governor on how to raise the money needed to fix the roads, other key elements of the state’s economic infrastructure are getting much less attention.

At the top of the list is child care.

Parents need child care to work or get the training they need to get ahead, and businesses are increasingly identifying the lack of affordable care as a barrier to recruiting and retaining employees.

Most parents understand the struggle to find child care—even if they have the resources to purchase higher quality care. For families working in lower-wage jobs, the cost of care can be a complete barrier to work and economic stability. And, in many communities, higher quality child care can be hard to come by because child care providers remain some of the lowest paid workers in the state, causing high turnover and a very truncated career ladder. The facts are sobering:

• For many parents, child care costs devour most of their paycheck. The average annual cost of child care for one infant in Michigan is $10,603, and for families with two children (an infant and a 4-year-old), the cost rises to $19,281 per year—higher than average annual tuition at a public university or average annual mortgage payments. A single with one child in center care pays nearly half of her/his annual income for child care.
• Child care workers struggle financially. A 2018 study of the Michigan child care workforce found that more than 9 of every 10 child care workers have incomes so low that they receive at least one public subsidy for themselves or their children, including Medicaid, the Earned Income Tax Credit, food assistance, or subsidized school meals.
• There are “child care deserts” in the state where high quality child care is hard to find: An estimated 44% of people in Michigan live in child care deserts—census tracts with more than 50 children under age 5 that contain either no child care providers or so few options that there are more than three times as many children as licensed child care slots.

In a new report, the League documents how current federal and state investments in child care assistance fall short of the need, leaving too many parents with the tough choice of working fewer hours, relying on a patchwork of temporary arrangements with relatives and neighbors, or staying out of the workforce altogether—increasing the likelihood of economic insecurity and poverty for their children. Michigan has one of the lowest initial income eligibility thresholds for child care in the country, and reimbursements for providers remain well below market rates. As a result, the number of families with low incomes receiving child care subsidies tumbled in Michigan from 62,413 in 2003 to an estimated 20,400 in 2020.

With the influx of new federal funds from the Child Care Development Block Grant, and the growing support of the business community for child care investments, state leaders have a unique opportunity to build a child care system that gives all parents the opportunity to work to support their families and gives young children the boost they need to take full advantage of the incredible potential for intellectual and emotional growth during earliest years of life. Let’s make sure that they put child care on the list of infrastructure improvements needed to grow the state’s economy.