North Carolina’s economy stands to gain significantly from addressing its child care crisis, according to a new report.
Solving the child care issue could create up to 68,000 new jobs in the state, boosting its annual economic output by an impressive $13.3 billion and adding $7.5 billion to its GDP. This is the finding of a study released last month by the N.C. Department of Commerce and the advocacy group NC Child.
“Accessible child care is fundamentally an economic development issue,” stated Samantha Cole, child care business liaison at the N.C. Department of Commerce.
This latest report builds on previous research showcasing the impacts of unaffordable and limited child care in North Carolina. Earlier this year, NC Child partnered with the state and national Chamber of Commerce Foundations to release a report revealing that the state loses approximately $5.65 billion annually due to a dysfunctional child care market.
“Taken together, these reports illuminate the significant economic opportunities that North Carolina has missed out on because of the child care crisis, while also showcasing the potential for a flourishing economy if we invest in addressing it,” noted Tiffany Gladney, NC Child’s senior director of policy and government relations.
The latest study highlighted that one in five employers cite insufficient child care as a barrier to hiring. It also found that there were 100,000 fewer working-age parents with young children actively participating in the labor force in 2023 compared to 2019. Furthermore, the study estimates that between 14,498 and 31,067 parents could have reentered the workforce in 2023 if adequate child care options were available.
These workforce challenges presented by the child care shortage present an opportunity for businesses to step in with creative solutions, according to the report’s recommendations. Businesses are encouraged to consider contributing to employee child care tuition, supporting employees’ emergency backup child care needs, offering on-site or near-site child care options, or even investing in local child care expansion grants.
Momentum is already building on both local and state levels. The NC Chamber has formed a Child Care Coalition to mobilize business leaders in advocating for policy change and addressing child care issues. Local chambers are initiating or joining efforts to expand access and affordability.
Cole pointed to examples like the on-site child care facility implemented by a UPS site in California which successfully reduced employee turnover and North Carolina’s innovative Tri-Share pilot program that splits child care costs between employers, employees, and the state government. She emphasized the valuable lessons to be learned from these and other creative community-led initiatives.
The current report comes at a crucial time as stabilization funds, which have been providing vital support to child care programs across the state, are set to expire in December. Western North Carolina communities are also grappling with the aftermath of Hurricane Helene, which severely impacted homes, businesses, and child care facilities.
While legislators allocated $67.5 million in stabilization funds over the summer, promising further action before these funds deplete, they will reconvene in November to discuss budget priorities and then in January for a full budgeting session.
Gladney stressed that the economic impact of early childhood education has become a powerful argument in advocating for its expansion.
“The early childhood education crisis requires a multi-pronged approach, and we need everyone at the table—including the business community—to collaborate and develop sustainable and affordable solutions,” she emphasized.
The report proposes several policy strategies aimed at tackling the high costs for parents, the low wages of early childhood teachers, and the financial vulnerability of child care businesses.
These include continued stabilization funding, establishing a minimum rate for child care programs participating in the state’s child care subsidy program, providing wage supplements for early childhood teachers through the WAGE$ program, expanding NC Pre-K and strengthening Smart Start programs, expanding the Child and Dependent Tax Credit, scaling up the state’s Tri-Share pilot program, providing free child care for the children of early childhood teachers, and creating more accessible pathways to careers in early childhood education.
For example, expanding affordable child care could bolster North Carolina’s annual economic output by an additional $5.7 billion to $13.3 billion, create 29,000 to 68,000 new jobs, and contribute $3.2 billion to $7.5 billion to the state’s GDP.
Interview Between Time.news Editor and Child Care Expert Samantha Cole
Editor: Welcome to Time.news, Samantha! Thank you for joining us today. Your recent report on North Carolina’s child care crisis has brought to light some staggering economic implications. Can you tell us more about the report’s key findings?
Samantha Cole: Thank you for having me! I’m excited to discuss this vital issue. Our report revealed that addressing North Carolina’s child care crisis could create up to 68,000 new jobs and add an impressive $13.3 billion to the state’s annual economic output. It also has the potential to add $7.5 billion to the state’s GDP.
Editor: Those are significant numbers! It sounds like child care accessibility is not just a community issue, but a pressing economic development concern. Can you elaborate on why accessible child care is critical for North Carolina’s economic growth?
Samantha Cole: Absolutely! Accessible child care is essentially a catalyst for workforce participation. Currently, one in five employers in North Carolina cites insufficient child care as a barrier to hiring. Our research showed that in 2023, there were 100,000 fewer working-age parents with young children participating in the labor force compared to 2019. By investing in child care, we enable parents to return to work, thereby alleviating labor shortages and driving economic growth.
Editor: That makes a lot of sense. With such compelling evidence, what do you think are the biggest obstacles to implementing effective child care solutions in North Carolina?
Samantha Cole: Well, one of the biggest challenges is the lack of affordable and quality child care options. As noted in previous reports, North Carolina loses approximately $5.65 billion each year due to a dysfunctional child care market. Businesses and families need tangible, scalable solutions, which often require collaborative efforts across governmental, business, and nonprofit sectors to overcome these hurdles.
Editor: Collaboration sounds key! You mentioned some innovative initiatives in your report. Can you share some success stories that might serve as models for other states to follow?
Samantha Cole: Certainly! For example, a UPS facility in California implemented an on-site child care center, which successfully reduced employee turnover and increased job satisfaction. Additionally, North Carolina’s Tri-Share pilot program is a fantastic initiative that splits child care costs among employers, employees, and the state government—making it more affordable for families while supporting local child care providers.
Editor: Those are great examples of how innovative thinking can lead to positive outcomes. As we look ahead, how are local and state chambers of commerce stepping up to address these challenges?
Samantha Cole: The NC Chamber has formed a Child Care Coalition, which aims to mobilize business leaders to advocate for policies that’ll expand child care access and affordability. Local chambers are also joining forces to bring awareness to this crisis and work on initiatives that can directly impact their communities. It’s heartening to see this momentum building—businesses are beginning to recognize the role they play in creating solutions.
Editor: It seems crucial to build on this momentum, especially with stabilization funds for child care programs set to expire soon. What do you predict will happen if there isn’t immediate action taken?
Samantha Cole: If we don’t take immediate action, communities may face even greater challenges. Without the vital support these stabilization funds provide, we risk further instability within child care programs. Combined with the aftermath of Hurricane Helene, which has already impacted many facilities, the stakes are incredibly high. Our workforce’s future depends on the ability of parents to find reliable child care options.
Editor: Absolutely, the urgency is clear. What message do you have for parents and business leaders who are watching this situation unfold?
Samantha Cole: My message would be to stay engaged and advocate for change. Parents should voice their needs, whether by contacting local representatives or participating in community discussions. For business leaders, exploring creative solutions—like offering on-site child care or contributing to employee tuition—can make a real difference. Together, we can drive policy changes and create an environment where both families and businesses can thrive.
Editor: Thank you, Samantha! Your insights underscore the interconnectedness of child care and economic development. It’s clear that by investing in child care, North Carolina can unlock tremendous potential for growth.
Samantha Cole: Thank you for having me! I hope our conversation inspires others to take action on this pressing issue.
Editor: Absolutely! We’ll continue to monitor this situation closely and report on any developments. Thank you for your time, Samantha!