Employing parents? The lack of child care could be hurting your small business

·4 min read

One of the most hotly debated aspects of President Joe Biden’s American Families Plan is the president’s proposal to improve the quality and affordability of child care and preschool. Now, child care isn't something that most people would consider a small business issue, and you've probably never thought about how child care affects your small business either. But child care is central to the running of most businesses.

Two experiences changed the way I think about early childhood education and child care in relation to small businesses.

Experience No. 1: A highly successful entrepreneur told me child care was one of his biggest problems.

Years ago, I ran into Paul Orfalea, founder of Kinko’s, at an event in San Francisco’s City Hall. I’d spent time with Orfalea years before when he was running Kinko’s, and I interviewed him for my book, "Wear Clean Underwear."

“What’s your primary area of interest?” I asked. His answer took me by complete surprise: “Early childhood education.” I’d met dozens, if not hundreds, of corporate titans, and never once had anyone mentioned child care as an interest. Why would this man focus on young children?

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Now, I can’t quote Orfalea directly – this conversation, after all, took place years ago. But his reply changed the way I thought about child care, seeing it not just as a personal issue but as a business issue.

Orfalea said that when he ran Kinko’s, his No. 1 problem with workers was that otherwise excellent employees were always having to take unexpected time off because of child care problems. If there had been quality, reliable care, much of his problem with absenteeism would have disappeared. And that didn’t even take into account the cost of child care, which kept many otherwise qualified people – most of them women – staying at home and out of the workforce.

Child care is central to the running of most businesses.
Child care is central to the running of most businesses.

Experience No. 2: As a small business owner, I lost my most valuable employee because of the cost of child care.

Twelve years ago, when Rosa, my director of operations, had her first child, she was able to take three months of paid maternity leave because California provides the assistance. (California is one of only eight states to have publicly funded maternity leave.) When she returned, I decided to make my office a “baby friendly” office, and she brought her infant son to the office for five months. (He was a VERY good baby.) But that wasn’t a long-term realistic option.

When Rosa had her second child, the cost of child care for two basically made it financially infeasible for her to continue to work for me (child care in the Bay Area costs well above the national average of $11,896 per child). She left me for a business that provided her with free child care and preschool.

The lack of high quality, affordable child care and preschool creates many problems for small businesses, the business community, and society in general. It:

  • Reduces the labor force. The lack of affordable child care pushes workers – especially women – out of the workforce, making it harder for businesses to find and keep qualified workers.

  • Reduces new business formation. Many women who would like to work or to start their own businesses cannot do so because of the lack of affordable child care.

  • Reduces women’s earning capacity. Women who step out of the workforce or reduce their hours to take care of children significantly lessen their lifetime earning capacity, and reduce their retirement savings and security.

  • Increases absenteeism. When child care arrangements fall through, workers have to stay home.

  • Creates worker stress. When employees are worried about the quality of their child care or how they’re going to afford it, their minds aren’t on the job.

Moreover, the child care industry is often dominated by small businesses, typically women or minority-owned small businesses. Supporting that industry will help these small businesses and their owners thrive.

Biden’s plan would provide free preschool education for all 3- and 4-year-olds in America, provide financial support for the cost of child care for middle- and low-income families, and provide financial support to increase the quality and number of child care options.

We like to say America has the best workers in the world – but if those workers can’t afford to take a job because child care is too expensive or have to stay home from work because quality child care is unavailable – the American economy is missing out.

When it comes to making America competitive with other industrialized countries, child care and preschool is an essential part of our economic infrastructure. And child care is central to the running of most businesses – especially small businesses. And it’s time we give it the support it deserves.

Rhonda Abrams is one of America's leading small-business experts and author of the book "Successful Business Plan: Secrets & Strategies." Connect with Rhonda on Facebook, Instagram and Twitter. Register for Rhonda's free business tips newsletter at www.PlanningShop.com.

The views and opinions expressed in this column are the author's and do not necessarily reflect those of USA TODAY.

This article originally appeared on USA TODAY: Why small businesses should offer child care solutions

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