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Child Care Breakdowns Costing North Carolina $5.65 Billion in Lost Economic Activity Each Year

U.S. Chamber Foundation, NC Chamber Foundation, and NC Child Release Research Measuring
How Child Care Impacts Workforce Productivity and the State’s Economy

A statewide report released today estimates that insufficient child care availability is costing North Carolina $5.65 billion in lost economic activity each year.

The U.S. Chamber Foundation, in partnership with the NC Chamber Foundation and NC Child, commissioned a survey of 517 North Carolina parents with children under the age of six. Survey results were then used to model an estimate of the direct financial impact of insufficient child care coverage on North Carolina’s economy.

  • Child care-related employee turnover and absenteeism costs North Carolina employers an estimated $4.29 billion per year.
  • North Carolina misses an estimated $1.36 billion annually in tax revenue due to turnover and absence costs stemming from child care issues.
  • In total, child care issues result in an estimated $5.65 billion annual loss for North Carolina’s economy.
  • 35% of parents that experienced disruptions to their employment in the past year reported leaving the workforce as a direct result of issues with child care.
  • 15% of working parents are planning to leave employment over the next 12 months, 18% of women and 13% of men.

The full report is available online here.

“The health of North Carolina’s economy is directly tied to the strength of its workforce. This survey shows that our state is not realizing its potential when it comes to both families and economic competitiveness,” said Meredith Archie, President, NC Chamber Foundation. “Affordable, quality child care supports working parents on the job, allows businesses to recruit and retain talent, and helps North Carolina children develop skills for success in school and life. The NC Chamber Foundation will continue to provide research to inform North Carolina leaders on this issue and support the business community in providing sustainable, long-term solutions.”

The report is the latest in the U.S. Chamber Foundation’s Untapped Potential series, which has previously measured the economic impact of child care breakdowns in twelve other states.

Survey results estimate how often parents are missing work or educational opportunities because of insufficient child care, which is then used to model the financial impact to the state’s economy to understand the untapped economic potential due to child care breakdowns. The results highlight the challenges facing families with young children and clearly show the need for flexible access to high-quality, affordable care.

“The U.S. Chamber of Commerce Foundation recognizes child care as a two-generation workforce issue—essential to supporting the workforce of today and developing the workforce of tomorrow. Unfortunately, the current supply of child care falls short of demand due to a tight labor market and lack of sustainable funding for child care programs,” said Aaron Merchen, senior director of policy and programs in early childhood education for the U.S. Chamber of Commerce Foundation. “North Carolina’s child care gaps drive parents out of the workforce, reduce tax revenue for the state, and put undue strain on households–particularly among the most economically vulnerable. While these challenges are complex and persistent, they are addressable, and the business community will play a central role in developing solutions that benefit all North Carolinians.”

“Quality early childhood education lays the foundation for our children during the most formative years of their lives”, said Erica Palmer Smith, executive director of NC Child. “Further, we know that child care access helps parents maintain employment, which is critical for supporting their children. This research clearly shows the importance of investing in the child care system here in North Carolina.  We look forward to collaborating with all stakeholders to make that happen.”

“Prioritizing child care is not only about ensuring the wellbeing and development of our children but also about fostering a strong economic foundation for the future,” said Danielle Stilwell, HR Development & Recruitment Manager at Columbia Forest Products. “By investing in these areas, North Carolina can attract and retain top talent, which is crucial for sustainable economic growth. Columbia Forest Products recognizes the importance of supporting our employee owners’ families and understands the long-term benefits of investing in high-quality child care. This collaborative effort between businesses, government, and community stakeholders will not only benefit families but also contribute to the overall prosperity and competitiveness of North Carolina.”

The Untapped Potential report follows research released by the NC Chamber Foundation last year showing that child care is a nonpartisan issue and voters across the political spectrum want this to be an important priority for the state. Learn more.