Will Biden’s pressure on chip makers lead to real impact on childcare?
Last month, when the Biden administration moved to require companies seeking a piece of $39 billion in federal funding for semiconductor manufacturing to establish affordable childcare for employees, some hailed it as a desperately needed solution for one of the most persistent problems facing working people.
Stories of people who gave up job opportunities, even their careers, because of their childcare needs have dominated the national conversation for years. Usually, those people happen to be women. A McKinsey study last year revealed that 45% of mothers in the U.S. with children up to five years old who left the workforce during the pandemic cited childcare as a major reason for doing so, versus just 14% of men.
Increasingly, employers see solving childcare needs not only as a critical component of hiring and retaining talent but also of persuading employees to return to the office in the wake of the pandemic.
Not everyone is convinced the administration’s requirement is the answer it promises to be. An opinion piece in The Washington Post conceded that while it’s “clever,” it isn’t nearly enough to fix such a massive institutional problem.
Still, the consensus seems to be that when it comes to addressing the issue, doing something is better than doing nothing — and for those on the frontlines of childcare, it’s definitely a move in the right direction.
“For years, we have believed that employers have a vested interest in supporting their employees with childcare, so I think this is a really interesting personification of that, with a bit of government encouragement along the way,” said Stephen Kramer, CEO of Bright Horizons, which operates more than 1,000 employer-sponsored childcare centers globally and counts Citi, Bank of America and PayPal as clients. “Minimally, it is putting a spotlight on an important issue, that if employers are going to have the workforce they need to do the kind of work that, for example, semiconductor manufacturers intend to do, childcare is an important component to enabling that.”
As Kramer sees it, “We’re at a point where employers just simply can’t ignore this issue.”
They do so at their peril, as one stat suggests. Employees with kids three years old and younger cost U.S. employers some $1,150 per year due to inadequate childcare, making for an average annual loss of $12.7 billion, according to recruitment service Zippia.
To say that those aiming to serve the massive need for childcare services are in a growth industry is an understatement. Bright Horizons is among the providers enjoying a healthy bump in business, last year opening more than 20 new centers across the U.S. and expanding into the Australian market, where it operates 75 locations.
Meanwhile, innovative solutions are springing up all the time. For example, The Haven Collection, with locations in New Jersey and Rhode Island, touts itself as the first fully licensed daycare in the U.S. to offer flexible childcare services, workspaces and physical fitness all under one roof.
It’s been six years since founder and CEO Britt Riley came up with the concept late one night as she nursed her newborn baby while trying to get her toddler back to sleep, all the while stressing about the demands of her job. “My background is in marketing, and the more I looked into it, the more I didn’t understand how an industry that’s critical to the infrastructure of the entire U.S. economy was being overlooked,” she recalled.
While childcare is a concern that knows no borders, there are countries that have it figured out better than the U.S. does, Riley suggested. “If you look at the Scandinavian countries, also Germany, the Netherlands and Denmark, they have a support network built around people’s childcare needs, which has been ingrained and accepted in their system for decades,” she explained. “Because they needed to have more women in the workforce, they needed to be able to show that they were supporting these families.”
Riley has generally positive feelings about the Biden administration’s latest move — while conceding there are enormous issues still to be addressed, including the woefully low pay rates for those who provide childcare.
“I think it’s an uphill battle because for so many years, the childcare industry wasn’t theirs to think about — it wasn’t their problem as employers, it was really just the families’ issue to figure out,” said the entrepreneur, who believes public-private partnerships will be the ultimate solution to the childcare dilemma. “I think any step forward is a great step.”