Starting a business and starting a family at the same time is no easy feat. Just ask Chanceé Lundy, a new mom who is also co-owner of Nspiregreen LLC in Washington, D.C.
“The cost of child care can be incredibly burdensome for small businesses, especially in large cities,” Chanceé said. “Since I had a child, I’ve had to be very disciplined in juggling my time–particularly because child care facilities where I live are very expensive and typically have a waiting list of one year or more. This can be crippling to a new business owner who did not foresee these issues.”
Unfortunately, too many aspiring small business owners struggle to access affordable child care. After all, child care costs an average of $9,500 per year, which is slightly more than a year of college tuition at the in-state rate.
This expense has real consequences for parents trying to balance work and their personal life–particularly for current and would-be entrepreneurs who need someone to care for their kids while they get a new venture off the ground. A new scientific opinion poll released by Small Business Majority found 36 percent of small business owners who are parents say lack of access to affordable, high-quality child care was a barrier to starting their business. Conversely, 29 percent of business owners with children (and 34 percent of women) say lack of access was actually a major reason for starting their own business in the first place, because they needed increased flexibility in their work schedules.
It’s clear that for many entrepreneurs, lack of access to child care was a barrier to entry. This is why they need practical solutions to overcome the lack of affordable child care options available to small employers and their employees, and a majority of entrepreneurs (56 percent) support policies that would provide direct federal assistance on a sliding scale to help low- and middle-income families afford child care. What’s more, 7 in 10 small business owners support expanding and improving federal income tax credits that would allow for working parents to receive a percentage of child care expenses back as a tax refund.
Small business owners’ support for these policies is not surprising when you look at the impact that not having child care options is having on their bottom lines. Nearly one-third (32 percent) of small business owners say their employees’ family and child care issues have affected their job performance or productivity.
“Having a tool that can help with employee retention while also leveling the playing field is key,” said Zach Davis, co-owner of The Glass Jar restaurant in Santa Cruz, Calif. “Replacing an employee costs me anywhere from $700 to $1,000. In fact, the last employee I lost left because of rising local child care costs, and it has taken six months for me to find a replacement. Had federal assistance been available to that employee, they might have stayed with me for much longer.”
Zach is not alone. Nearly half (47 percent) of small employers surveyed say that employee turnover impacts their bottom line, which underscores why small businesses support creating or expanding publicly administered plans to assist families with the cost of child care.
Fortunately, there is at least one legislative solution on the table. Last month, U.S. Sen. Patty Murray (D-Wash.) and U.S. Rep. Bobby Scott (D-Va.) introduced a measure that would cap out-of-pocket child care expenditures for families who make less than 150 percent of their state’s median income by increasing federal funding for child care centers.
Although Murray and Scott are members of the same political party, it’s important to note that small business owners don’t see this issue through an ideological lens. Of the 502 small business owners surveyed, 50 percent of respondents identified as politically conservative, while 39 percent identified as liberal and 11 percent as independent. In an era of extreme political polarization, perhaps helping entrepreneurs and their employees gain access to child care is one of few issues most of us can agree on. Let’s hope lawmakers take notice.