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  • Writer's pictureChildcare Connections

Report: Iowa Economy Loses Nearly $1 Billion Annually From Childcare Shortage

A new report by the U.S. Chamber of Commerce Foundation found the Iowa economy loses close to a billion dollars annually due to childcare issues.

According to the report, the state has one of the highest labor force participation rates in the nation, but the lack of access to affordable child care costs the economy $935 million from lost tax revenue and employee absences.

"It comes in the form of lost wages, in lost productivity, in the lost taxes to communities for people who weren't able to make those wages," said Mike Ralston, president of the Iowa Association of Business and Industry.

The report surveyed 331 working parents with children five and under and found more than half reported missing work within the past three months because of childcare issues, and they reported paying an average of $552 per month for child care. Nearly 70 percent said they rely on family member for some of their child care.

The report estimated the state loses $153 million in tax revenue and $781 million from employee turnover and absences each year.

"It really impacts again, not only families, but communities and employers and certainly it impacts children when we don't have access to quality child care," said Ralston.

Iowa has faced a growing concerns about access to child care as the state faces a critical shortage of slots, especially in rural areas. According to the Iowa Women's Foundation, the state faces a shortage of 359,000 slots for afterschool care for children under 12.

The state has lost 40 percent of its child care businesses since 2012, according to Iowa Child Care Resource and Referral.

Additionally, the report found many parents are struggling to pay for care with 74 percent of families paying out of pocket and just one percent receiving federal or state assistance.

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