Opinion Poll: Small businesses support policy solutions to address our nation’s childcare challenges

Introduction

Small business owners and their employees need affordable and accessible childcare to thrive and participate fully in the workforce. It’s well-documented that access to childcare has been a particular challenge, especially due to the industry’s issues stemming from the COVID-19 pandemic. The childcare industry is still struggling to rebound and is recovering lost jobs slower than other pandemic-affected sectors due to low worker wages.¹ The industry’s challenges are also exacerbated by the expiration of the Child Care Stabilization Grants included in the America Rescue Plan Act. Since its expiration on September 30, 2023, 28% of childcare providers who ran out of the stabilization funding reported they were cutting wages or were unable to sustain salary increases and 24% reported they were serving fewer children.²

The childcare industry’s struggles impact the parents who rely on them, which includes many small business owners and their employees. In the month after the expiration of the stabilization funding, nearly one-third of families reported that their childcare tuition had increased.³ Along with rising costs, finding and accessing childcare is a struggle, as half of Americans live in childcare deserts where no care is available.⁴ This puts working parents in a precarious position of having to choose between leaving the workforce or leaving their communities to find affordable, quality childcare.⁵

The lack of childcare funding and access to affordable childcare has put a significant burden on working parents and has impeded the ability of small businesses to retain a skilled workforce. Additionally, for entrepreneurs with children of their own, it’s preventing many from being able to launch or grow successful businesses. Although several states have taken steps to fill gaps in childcare investments, federal action is needed to solve the childcare funding cliff and ensure more individuals can own or work for a small business.⁶ Small Business Majority’s new national opinion poll of small business owners reveals they believe that policymakers should take steps to address the cost of childcare, and that they strongly support a variety of legislative solutions.

Key findings

• Lack of access to childcare is a barrier to small business formation and growth: The vast majority of poll respondents (92%) are parents. A significant number of these small business owners agree that a lack of access to affordable, high-quality childcare for their own children created an impediment for them to start their business (58%) and grow their business (59%).
• Entrepreneurs’ childcare issues impact their ability to run their businesses: Small business owners report that their own childcare issues have forced them to take substantial time away from the business (56%), lose out on business opportunities (39%), hire additional help (28%) and shut down their own business and rejoin the workforce (26%).
• When employees experience childcare issues, small businesses struggle: Small businesses report that they’ve experienced lower productivity (51%), been unable to operate longer hours (44%), lost revenue or earnings (31%), and had to hire temporary workers (28%) when their employees are facing childcare issues.
• Small business employees frequently experience schedule disruptions: Nearly three-quarters of entrepreneurs say that their employees adjust their work schedules due to childcare issues at least a few times a month.
• Employees’ childcare issues impact small business operations: Small business owners say that they’ve experienced unplanned employee work absences (62%), had an employee quit (30%), had a job candidate turn down an offer (30%) and had an employee turn down a promotion (27%) due to childcare issues. More than 6 in 10 (61%) agree that their employees’ childcare issues have negatively affected their ability to do their job as efficiently as both the employer and employee would like.

• Small businesses want policymakers to act on childcare: More than two-thirds (68%) of small business owners believe that policymakers need to take action to address the cost of childcare. They support a number of policy solutions to expand access and address costs, including:
  • More than two-thirds (67%) support renewing $16 billion in funding for the Child Care Stabilization Program, a federal program that provided additional support to childcare providers and expired last fall. 
  • Two-thirds believe that nonprofit childcare providers should be allowed to access the Small Business Administration’s main loan programs for working capital and real estate expansion.
  • 71% support doubling the amount of money that can be saved by a family in a tax-exempt Dependent Care Flexible Spending Account to cover childcare expenses, up to $10,000 annually.
  • 70% support expanding eligibility to more families for the national Head Start program.
  • 73% support expanding a tax credit aimed at helping businesses provide childcare to their workers by increasing the credit’s rate and caps, allowing businesses to jointly create and operate a childcare facility for their employees, and adding in-home services as an eligible use.