Ongoing child care crisis costs NE Tennessee $63.2 million annually

Published 8:33 am Monday, December 19, 2022

Prior to the pandemic, child care was a growing crisis for families and our economy.Fast forward to today, Tennessee’s working parents of young children continue to struggle to find and afford child care. For Tennessee employers the situation is likewise acute, with the child care crisis exacerbating the state’s workforce shortage.

The topline findings of a new study that examined adverse economic impacts of inadequate child care on Tennessee parents, businesses and taxpayers reveal $2.6 billion annually in lost earnings and revenue. In Northeast Tennessee alone (Carter, Cocke, Greene, Hamblen, Hancock, Hawkins, Johnson, Sullivan, Unicoi and Washington counties), the economic impact is $63.2 million per year.

The study, conducted by Tennesseans for Quality Early Education (TQEE) with support from Zogby Analytics and economist Clive Belfield, analyzed survey results from 1,297 working parents with children under age 6 to determine how child care challenges adversely affect workforce participation and productivity, and quantifies the resulting economic impact.

“There’s no denying that we are facing a child care crisis here in Tennessee and across the country, and this report shines a light on just how dire the situation is for working families, businesses and our economy,” said Blair Taylor, president and CEO of TQEE. “Our current child care system needs an overhaul. It’s our intent for this report to serve as a call to action for collaborative problem-solving by state government and the private sector.”

Northeast Tennessee parents who encounter child care problems are hit hardest — losing an estimated $40.5 million in earnings each year. More than half of Northeast Tennessee working parents of children under age 6 reported employment disruptions due to inadequate child care. Specifically, 26 percent quit or were fired; 32 percent turned down a job offer or promotion, 28 percent reduced hours from full-time to part-time or were prevented from increasing hours to full-time; and 19 percent were forced to stop seeking employment altogether.

Northeast Tennessee employers in turn experienced losses of $12.6 million from lower productivity, reduced revenue, increased hiring and retention costs and, ultimately, lost profits. While the economic impact on families and employers resulted in lower consumption of taxable goods, lower profit margins, and ultimately reduced  tax revenues of approximately $10.1 million per year.

“High-quality child care, which enables adults to work while laying an important foundation for children’s success in school and beyond, is a powerful strategy for growing Tennessee’s workforce of today and tomorrow,” said Miles Burdine, president and CEO of the Kingsport Chamber of Commerce and TQEE board chair. “Many of the businesses we work with have experienced firsthand the problems  that inadequate child care creates for their employees. And this report, which we’re proud to co-sponsor, makes it clear that partnership between businesses, families and policymakers will be important to finding solutions.”

“Ballad Health sees increasing child care access as critical to our ability to recruit and retain healthcare professionals in our system,” said Todd Norris, senior vice president for community health and system advancement, Ballad Health. “We also see the proven benefit high-quality early education provides to prepare children for school readiness and to support the economic strength of families and employers in our region.”

Access, affordability and quality are the primary factors that drag down the system. Nearly two-thirds working parents said they have trouble accessing care at all. Affording child care is also a major issue for many Northeast Tennessee families, with half of parents citing affordability as a challenge. The affordability problem becomes even clearer in light of the fact that one-third of Tennessee children under 6 live in families with incomes less than $40,000, yet the average annual cost of center-based child care is $11,068 and $10,184 for infants and toddlers respectively. That’s more than the in-state college tuition at most Tennessee universities. Another 44 percent cite finding suitable quality as an issue.

“The brain develops more in the first five years of life than during any other time, and about two-thirds of Tennessee children may spend a substantial portion of that consequential period of development in some form of child care,” said Taylor. “Beyond the immediate economic implications, it’s imperative we prioritize access to high-quality and affordable child care options in order to provide our children with the strongest foundation for future learning.”

In addition to the statewide and Northeast Tennessee reports, TQEE produced five other companion regional reports that feature data specific to Davidson County, Shelby County, Hamilton County, West Tennessee and Knox County. All of the reports can be viewed in full at tqee.org/2022-child-care-study/.

Report partners reflect a statewide concern among Tennessee business organizations to address the inadequate child care system. They are Baker Donelson, Ballad Health, Baptist Memorial Healthcare Corporation, Benwood Foundation, Blue Cross Blue Shield of Tennessee, Bristol Chamber of Commerce, Chattanooga Area Chamber of Commerce, First Horizon Bank, Greater Jackson Chamber, Greater Memphis Chamber of Commerce, Hyde Family Foundation, Joe C. Davis Foundation, Johnson City Chamber of Commerce, Kingsport Chamber of Commerce, Knoxville Chamber of Commerce, McNairy County EDC and Chamber of Commerce, Memphis Tomorrow, Nashville Area Chamber of Commerce, PNC Bank, Scarlett Family Foundation, Tennessee Business Roundtable, Tennessee Chamber of Commerce, The Healing Trust and The Urban Child Institute.