One of the most hotly debated aspects of President Joe Biden’s American Families Plan is the
President’s proposal to improve the quality and affordability of childcare and preschool. Now, child care isn’t something that most people would consider a small business issue, and you’ve
probably never thought about how child care affects your small business either.
But child care is central to the running of most businesses—especially small businesses—though we rarely give it much thought. Two experiences changed the way I think about early childhood education and childcare in relation to small business.
Experience number one
A highly successful entrepreneur told me child care was one of his biggest problems.
Years ago, I ran into Paul Orfalea, the founder of Kinko’s, at an event in San Francisco’s City Hall.
I’d spent time with Orfalea years before when he was running Kinko’s, and I interviewed him for my book, Wear Clean Underwear. Orfalea had subsequently sold Kinko’s—FedEx bought it for
$2.4 billion—and was now focusing his time on his philanthropic foundation.
“What’s your primary area of interest?” I asked. His answer took me by complete surprise: “Early childhood education.” I’d met dozens, if not hundreds, of corporate titans and never once had anyone mentioned childcare as an interest. Why would this man focus on young children?
Now, I can’t quote Orfalea directly—this conversation, after all, took place years ago. But his reply changed the way I thought about childcare, seeing it not just as a personal issue but as a business issue.
Orfalea said that when he ran Kinko’s (there were 1900 stores when it was sold) his number one problem with workers was that otherwise excellent employees were always having to take unexpected time off because of child care problems. If there had been quality, reliable child care, much of his problem with absenteeism would have disappeared. And that didn’t even take into account the cost of child care which kept many otherwise qualified people—mostly women—staying at home and out of the work-force.
Experience number two
As a small business owner, I lost my most valuable employee because of the cost of child care.
Twelve years ago, when Rosa, my Director of Operations, had her first child, she was able to take three months of paid maternity leave since California provides paid maternity and paternity leave. (California is one of only eight states to have publicly-funded maternity leave.)
When she returned, I decided to make my office a “baby friendly” office, and she brought her infant son to the office for five months. (He was a VERY good baby.) But that wasn’t a long-
term realistic option.
When Rosa had her second child, the cost of child care for two children basically made it financially infeasible for her to continue to work for me (child care in the Bay Area costs well above the national average of $11,896 per child). She left me for a business that provided her with free child care and pre-school.
The lack of high quality, affordable child care and pre-school creates many problems for small businesses, the business community, and society in general. It:
- Reduces the labor force. The lack of affordable child care pushes workers—especially women—out of the work force, making it harder for businesses to find and keep qualified workers.
- Reduces new business formation. Many women who would like to work or to start their own businesses cannot do so because of the lack of affordable child care.
- Reduces women’s earning capacity. Women who step out of the work force or reduce their hours to take care of children significantly lessen their lifetime earning capacity, and reduce their retirement savings and security.
- Increases absenteeism. When child care arrangements fall through, workers have to stay home.
- Creates worker stress. When employees are worried about the quality of their childcare or how they’re going to afford it, their minds aren’t on the job.
Moreover, the child care industry is overwhelmingly dominated by small businesses, typically women or minority-owned small businesses, who unfortunately operate on the thinnest of profit margins. Supporting that industry will help these small businesses and their owners thrive.
Biden’s plan would provide free pre-school education for all three- and four-year olds in America, provide financial support for the cost of childcare for middle and low income families, and provide financial support to increase the quality and number of childcare options.
We like to say America has the best workers in the world—but if those workers can’t afford to take a job because child care is too expensive or have to stay home from work because quality child care is unavailable—the American economy misses out.
When it comes to making America competitive with other industrialized countries, child care and pre-school is an essential part of our economic infrastructure. And child care is central to the running of most businesses—especially small businesses. And it’s time we give it the support it deserves.
Copyright Rhonda Abrams, 2021
This article originally ran in USA Today on June 16, 2021