Childcare Investment Bolsters the Economy

Childcare access is a vital pillar of our economy. Without adequate childcare access, working parents, especially mothers, are unable to fully participate in the workforce.

By Alexis Bailey, NJBIA Vice President of Government Affairs On Oct 31, 2022

The Rutgers Center for Women & Work’s recent report, “The Status of Women in New Jersey,” found nearly 10% of New Jersey women who did not work sometime between April 2020 and December 2021 cited childcare responsibilities. In comparison, just 2.3% of men reported not working for the same reason.

Luckily, in New Jersey, lawmakers have placed a heightened focus on combating our state’s childcare challenges. Senate Majority Leader M. Teresa Ruiz introduced a comprehensive bill package this spring to strengthen our childcare infrastructure.

The $28 million “Thriving by Three” competitive grant program to increase infant and toddler seats across the state was signed into law on June 30. This program will create 1,000 new slots in childcare deserts. NJBIA is proud to work with Majority Leader Ruiz on this package and is fully committed to advancing the remaining bills in the package.

Two bills are of particular interest to the business community. One would ensure a mixed delivery system for childcare by mandating that school districts receiving pre-K aid provide at least half of preschool pupil placements at licensed childcare centers, with the remaining seat expansion at district and Head Start programs. This is critical to ensure the viability of private providers and access to care for our state’s youngest children.

As we continue to move toward preschool expansion across the state, it is imperative that the private sector has a seat at the table. Licensed childcare centers operate on thin profit margins due to the structure of these types of businesses. Staff salaries are the largest expense, making up more than half of typical operating budgets. Legally required staffing ratios for each age group make it crucial for centers to serve children across age demographics in order to remain financially solvent and maintain a sustainable business model.

The second bill would incentivize employers to support their employees’ childcare needs by offering tax credits for those that provide on-site childcare accommodations, work with local centers to provide childcare slots for employees’ children, or contract with qualified childcare information and referral services. This bill will play a critical role in helping businesses to think differently about their benefits package for employees and help working parents fully participate in the workforce.

As we continue to recover and grow our state economy post pandemic, high quality childcare access that emboldens the workforce, employers and center-based providers must remain a paramount concern for policymakers.

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