Press Releases

Small Businesses Struggle with Lack of Affordable Child Care

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Washington, February 6, 2020 | comments

WASHINGTON – Today, the House Committee on Small Business Subcommittee on Rural Development, Agriculture, Trade, and Entrepreneurship heard from witnesses on the impact of child care on communities and small businesses.

“Like health care, the child care industry presents many challenges; especially for those in rural communities.  Lack of access, lack of choice, and high cost consistently discourage parents from reentering the workforce.  This reduces demand for the few child care entities in those areas and raises costs while eliminating jobs,” said Acting Ranking Member Jim Hagedorn (R-MN).  “Programs like Head Start, or a suggested universal child care program, may only fill part of the gap.  A vibrant private sector option must be part of the calculus.”

Regulations Pose Challenge to Child Care Workforce and Businesses

“…[H]ere you’re talking about the costs for people who are already in the business, but what is harder to see is all the people who don’t get into the business precisely because of these costs.  And the academic literature seems to suggest that it’s not insignificant,” said Dr. Veronique de Rugy, Senior Research Fellow, Mercatus Center, George Mason University, in Arlington, VA.  “The question for the federal government is what can the federal government do.  And that is the hardest question because these are state and local regulations… You’re trying to expand child care or make child care more affordable by subsidizing it.  The problem is if you subsidize it, you may increase the demand and that increase in demand may trigger an increase in the supply, but it won’t be enough if the regulations are so strict that nobody wants to get in.”

“When we involve the private sector and we partner with our school districts, and we partner with other nonprofits and foundations, rather than just adding together our resources of varying types, we actually multiply those resources to create something better than we could when we try to do it all by ourselves,” said Mr. Dan Levi, President, Levi Architecture, PLC., in Cedar Falls, IA.  Mr. Levi testified on behalf of the Black Hawk Child Care Coalition.  “We can’t have centers that open and close, it hurts the economy, it hurts the vitality of our small communities, it leaves moms and dads in a very difficult position…”

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