Jamee Herbert: Over the last six episodes, we've looked at our broken childcare system from many different angles.

Sonja Castañeda-Cudney: Did it work for the health of our family? I don't know. It was very stressful.

Benu Chhabra: Many of us, including myself, had health issues where we couldn't even leave the program to go even for a regular checkup.

Wendy Doyle: There are couples out there that want to start a family. They want that more than anything, but because they know they can't get childcare, they are putting that on hold. And that to me is, we're in the United States of America.

Jamee Herbert: Today we look at the total cost of that system, what we all pay when childcare doesn't work. We look at the hidden cost of lost productivity, shrinking labor participation rates, and the people who ultimately pay the price for it. This is Childcare Matters, Built to Break, the podcast that asks why America's childcare system is built to break.

I'm Jamee Herbert, CEO of BridgeCare, an organization that helps make navigating the minefield of early care and education easier. I've spent years trying to understand why our childcare system feels impossible to work through. Every episode, we'll be looking at a different part of the equation from the economics to the workforce to the policy barrier shaping what care looks like on the ground.

By the end of the season, you'll have a clearer picture of why our childcare system has been set up to fail and more importantly, what we can do to fix it.

This week we asked the question, what's the true cost of insufficient childcare?

Wendy Doyle: I think about, often in the town hall setting, hearing families put non-refundable deposits down at multiple childcare providers, oftentimes $100 and, at a time, just please put me on a list, hoping, and it could be 50 to 75, 100 names in front of them. And then knowing they're not going to get that money back when they're scraping together what groceries are going to look like for the week, and hearing one woman stood up and said, "I'm $400 in. I'm on four different places, $100 each, waiting to be accepted to get childcare."

Jamee Herbert: This is Wendy Doyle, the president and CEO of United WE, an organization that works to break down barriers to women's economic growth and leadership. The picture she paints here might sound like the worst case scenario, but for so many families, this is a very familiar reality.

Wendy Doyle: We're hearing now more than ever, since the beginning of the year, significant closure. The American Rescue Plan Act funds totally have cycled through the system. State of Oklahoma since January, 500 closures in the state. Similar in Missouri, similar in here in the Midwest area, similar significant closures, you're hearing it with no notification to families. It's like we're making the decision Friday, doors closed. What do I do with my kids? I don't know. They got to figure it out.

Jamee Herbert: We all know that families are paying a lot for childcare, but the cost of insufficient childcare goes far beyond that, and we're all paying for it.

Some estimates suggest that insufficient childcare costs the US economy nearly $172 billion a year. This shows up in ways that are easy to overlook individually, but really add up. It could mean difficulty recruiting employees because childcare simply isn't available in the area, or losing skilled workers who can't sustain the cost or find reliable childcare.

What's even more striking, is how unevenly this falls on two groups in particular. The first is younger workers who are often earlier in their careers, earning less, and having less financial cushion to absorb the cost.

And the second population group is women. When childcare falls through or becomes unaffordable, it's women who are far more likely to reduce their hours or leave the workforce entirely.

The numbers make that gap hard to ignore. In 2024, nearly 95% of fathers with young children were in the labor force. For mothers, that number was 68%. When it comes to insufficient childcare, we're seeing a pattern that women are paying a disproportionate price. This is backed by a 2016 HHS report. It shows that higher childcare subsidy results in better labor participation rates for women.

Wendy Doyle: What's concerning to me is that the Department of Labor reported, from January through June, over 200,000 women dropped out of the workforce, and all signs are pointing toward what we're talking about today, the childcare challenge.

It is an economic development issue for our country. There is a lot of thinking that it is, to solve that somebody can stay home, but the reality of the economics, the kitchen table conversations that families are having of budgeting, and looking at where their money is going, partners need to be working. Everyone needs to be working to be able to put it all together. It's not a solution.

Sarah Rittling: We know that there were surveys done where employees were acknowledging that next to healthcare, childcare was the second-biggest benefit that they were seeking.

Jamee Herbert: This is Sarah Rittling for the First Five Years Fund, a bipartisan action group. Her organization has been highlighting research into the economic gains we're leaving on the table with our current childcare system.

Sarah Rittling: We went out in the country and did some focus groups where we tested this, and it resonates that, "I don't have a child but I'm going to work and my colleague is not showing up because they're having issues with childcare." And so, from all walks of life, all aspects, data, good data, bad data, all of it's there and I think that's incredible.

I think the willingness from the business community and eagerness from small businesses to large, to want to be at the table and figure out how they can make this work for the employees, is an exciting part of where we're headed.

Jamee Herbert: Sarah also points out how strongly childcare is linked to local economies.

Sarah Rittling: I was on a panel and it was a local legislator, and it was out West, and a local chamber of commerce and they had a business that was coming into town and they needed to figure out childcare to get that business in here. This is a story that now is told lots and lots and lots of times around the country, of economic development side of bringing businesses in, building a workforce within a town, a city, a community, an area, acknowledging that if they're going to be able to do that, they also have to have some childcare solutions.

Jamee Herbert: Even for employers like the one Sarah mentioned, who genuinely understand that childcare is a problem, the question becomes: whose responsibility is it to solve? Should employers make sure their workforce can access care or help them afford it? Will the government step in? Or does it take some combination of the two? And if so, who leads that effort? Those are all fair questions.

And here's some context that might reframe them. According to the Bureau of Labor Statistics, about one in three workers has a child under 18. A quarter of those have children under six. That puts parents of young children at roughly 8% of the total workforce. When employers hear that, the reaction is often, "That's a pretty small slice of our people. Does it make sense to build a benefit for only 8% of our population?" But here's the thing: that framing misses something really important. Childcare isn't just an employee benefit, it's an economic driver.

To find out more, I spoke to Simon Workman. He's the co-founder and principal of prenatal to five fiscal strategies, a nonprofit focused on providing states with childcare solutions.

Simon Workman: Childcare is one of the smartest investments you can make. I mean, there's a lot of data out there and it spans huge parts of the economy. There's a very well-known economist, James Heckman, that developed something called the Heckman Curve and it really looks at what is the return on investment in the long term? And that ranges from about $7 for every dollar invested around pre-K, to more like $13 return for every dollar invested if you have a fully robust zero to five system, that actually starts early.

Now, when those returns come, depends. A lot of that is about children who have access to high quality early childhood environments are less likely to go through the juvenile justice system, are more likely to graduate from high school, more likely to graduate from college, more likely to have higher paid jobs. And there's a tax impact of that, of then they have higher paying jobs that put more money into the economy.

Jamee Herbert: Simon's really explicit about what will happen to the economy if we don't address the number of challenges with childcare business models and workforce recruitment and retention, all of which impact the availability and accessibility of care.

Simon Workman: I think you're going to see more and more childcare providers closing, which leads parents either to drop out of the workforce, which has big implications on their own economic stability, but also on the economies of the states and the communities as a whole.

Jamee Herbert: What Simon is describing played out in real time when COVID hit. Overnight, childcare providers shut their doors. Parents couldn't focus or show up fully and employers saw it happening right in front of them on Zoom calls. Kids climbing on laps and joining meetings. Childcare does in fact impact them, and the business community took notice. This is something Sarah mentions earlier in the series.

Sarah Rittling: Kind of like a match was lit on that because of COVID, frankly. And so I think that having the business community, having those voices, having that presence I think has been really, really helpful in a lot of different ways. And I think a lot of that had to do with, people really started engaging and having a real conversation publicly that we did not have prior to 2020. I think the personal nature of the choices that you're forced to make at home was very personal and then we all started living each other's lives in a more real way and it provided a comfort that allowed us to talk about it.

Jamee Herbert: Simon takes it further. The business of investing in childcare doesn't stop with parents.

Simon Workman: There's been more and more studies to do to show what is the economic impact in the short term. That is about, if you're paying educators more, they have more money in their pockets right now and they go spend it in the economy right now. You maybe are lifting them up out of poverty and lifting them up from having to rely on other public benefits, so they no longer have to take Medicaid. They no longer rely on food stamps, because now they're being paid a living wage and actually spending that money themselves in the economy.

Jamee Herbert: But not every politician is motivated by this. In today's political climate, the focus is often on immediate wins, what's visible right now. Young kids can't vote, and it's hard to campaign on future returns when your voters want to know what you did for them this year.

However, others are also starting to wake up to the long-term economic benefits that can sustain from funding childcare properly. Connecticut state representative, Kate Ferrar, has reformed her state's approach to childcare by establishing an office of early childhood.

What do you think gets overlooked when we talk about the economic impact of accessible, reliable childcare?

Rep. Kate Ferrar: I think really just from a practical standpoint, the economic costs for that individual family, meaning if they cannot find childcare that they think is a good fit, and that they can afford, and that is relatively close to either their home or work, that they will pass up that work opportunity, or they might have to leave a work opportunity and a job, or they might have to use up their sick time or PTO to deal with childcare issues.

So, I think to me it's very much the day-to-day impact of how challenging it can be for a family, and how that affects the job they have and can keep, or the job they could seek, and how much that limits really that economic success for that family.

Jamee Herbert: According to First Five Years Fund polling, three quarters of voters and small business owners say federal childcare and early learning funding should increase. Close to 90% of business owners say employees with young kids are more likely to stay in the workforce with affordable high quality childcare.

Sarah Rittling: People are saying like, "I just can't afford to go back to work because I can't afford childcare." And so yes, there are public funds that go into this. Businesses are at the table. We have the tax good being leveraged, but how do we make steps to get so it doesn't feel like a private luxury for families?

Jamee Herbert: How do you think we connect the dots between childcare and the broader economy?

Sarah Rittling: It's a big question, but I'm going to tackle in a couple of different ways. So yes, 100% the cost of not having childcare, on the workforce, on our economy, is now an excellently told tale. We know childcare means business and the engagement from the business community, from local chambers of commerce from all aspects has been fast-paced moving, instrumental, such an incredible part of this large story that we're trying to tell.

Wendy Doyle: You're really seeing that a lot of companies, as they're looking at a growth model, really doing their due diligence before they make a decision to go to a particular state to look at what the childcare resources are available.

Jamee Herbert: Wendy points to something thoughtful businesses are already doing: factoring childcare access into decisions about where to open new locations or expand operations. If the workforce in a given area can't access or afford care, that's now part of their calculation.

Wendy Doyle: You're seeing international companies that are thinking about coming to the United States and looking at, as a workforce challenge, childcare isn't where it needs to be, therefore may overlook coming to the United States. So I see that as going backwards.

Jamee Herbert: Simon is very clear about what we will miss out on economically, if we don't reform our childcare system.

Simon Workman: There's been some great data out there that breaks it down into, what is the return for the family individually of if you have affordable childcare, that puts more money in your pocket as a parent, and that you're spending in the local economy. What's it do for businesses who suddenly aren't dealing with people calling out sick, aren't having to replace staff who leave because of childcare problems. That has a cost related to it.

And what's the overall increase in the tax base? All of this money is being spent in the local economy. If families have less they're spending on childcare, they're not buying second homes somewhere else. They are using it to pay for things for their kids. They are using it in their local economy. The early childhood workforce, when you're paying them more, they are using it to feed their own family. They're using it in their own local economy.

So, it really is a smart investment in the short, medium, and long term.

Jamee Herbert: Improving our childcare system isn't just the right thing to do because we want to take care of children and we want them to be in healthy, thriving, quality places with caretakers who really care for them. And, because we want to make it so that all parents and folks who want to work, especially mothers who are disproportionately impacted by this system can pursue careers that they love.

We want those things. And I think generally speaking, a lot of people agree with that. But it's also just a pure, hard, economic case, about the hundreds of billions of dollars that our country is losing out on due to lost productivity and earnings from not investing in our childcare system. It just makes sense. It's not even a question. It shouldn't be a question of, do you believe in it or do you not, and values, it just makes sense.

It has been proven the cost we are paying to not investing in this system. And so while I personally very much believe, and I think many of us do in the value of quality childcare for our children and our parents, it is a math and economic question.

Across this series, we're showing you every piece of the puzzle of a system that has been built to break. In our final episode, we look at what we've learned during the series and what we can do to fix the childcare system in America. We can only fix the system if we first understand why and where it's broken.

So subscribe, and share this podcast with others who are navigating the system too. And go to getbridgecare.com. If you want to learn more about what can be done to help families access high quality affordable childcare, the link is in the show description.