Child Care Raises State Economy, Report Says
California’s licensed child-care industry pumps tens of billions of dollars into the state’s economy, but the industry is strained and badly in need of support from both the private and public sectors, according to a report being released today.
The study, commissioned by the nonprofit National Economic Development and Law Center, analyzed the economic power of an industry normally viewed in social and educational terms. It found that the industry generates more than $4.7 billion annually in direct revenue, rivaling revenues of the livestock and vegetable crop industries.
It employs more than 123,000 people--exceeding the number of those working in advertising.
Perhaps more significantly, child-care providers enable working parents to earn $13 billion a year, earnings that in turn generate $40 billion in economic activity, found the report conducted by San Francisco-based consulting firm M.Cubed.
All told, the industry spurs a total of $65 billion in annual economic activity for California, more than the motion-picture industry, the report found.
The data show that child care is an infrastructure need critical to the state’s health, much as transportation, housing and water are, said National Economic Development and Law Center President James W. Head.
“If you take child care out of the equation, you really begin to look at the diminished capacity of families to work, and the diminished ability of industries to be competitive,” Head said. “If we’re talking about continuing to have a vibrant economy in California, this is an essential infrastructure we have to support.”
The center--which advocates making child care more accessible and affordable--has conducted comparable studies in recent years for eight California counties, including Los Angeles.
The industry faces enormous challenges that are expected only to worsen, the report notes. By 2010, 85% of the state’s labor force will probably consist of parents, according to U.S. Census Bureau data. And already, licensed child care currently meets only about 21% of the estimated statewide need.
A 2000 survey of 500 low-income families in Los Angeles County found that more than half had lost a job and more than two-thirds failed to seek one due to difficulties finding child care.
Wages are low and turnover rates among child-care staff exceed 30%, the report notes. Everything from zoning restrictions to thin profit margins make it a difficult business for start-ups.
The report called on state lawmakers to pass tax-credit legislation. It urged state and local government to encourage development of new facilities and encourages private industry to provide child care for employees. It also called for public funding for child-care business development and augmenting programs to finance child-care facilities.
“It’s really important for all our policymakers in our public and private sectors to recognize that we’re not just out there with our hand out,” said Patty Siegel, executive director of the San Francisco-based California Child Care Resource and Referral Network, she said. “We make a contribution to the state’s economy.”
