Increased child care access could ease Montana workforce shortage, advocates argue

Once upon a time, supporting access to child care was feminism. These days, in the face of a statewide workforce shortage, it’s just good business.

“Government works at the pace of government, and business works at the pace of business,” Jason Nitschke, a senior child care business advisor at nonpartisan childcare advocacy group Zero to Five Montana, said during a Tuesday afternoon presentation sponsored by the Billings Chamber of Commerce.

The presentation’s title, “Child care is Infrastructure,” underscored the pragmatism of this call-to-action. Nitschke frames access to child care in terms of its “broader economic impact”: When child care is out of reach, parents have to sit out of the work force. And when there’s a workforce shortage, businesses miss out on potential growth and increased revenue and the government misses out on tax revenue.

“A lack of available high-quality childcare in Montana has prevented many parents from fully participating in the labor force, and thus further exacerbates the state’s workforce shortage,” according to a March 2024 report from the Montana Department of Labor and Industry.

In 2023, at least 21,270 Montana parents reported being unable to participate in the labor force due to family responsibilities and a lack of childcare, according to the report. Another 45,000 Montana parents reported being underemployed or working reduced hours for the same reason.

Yellowstone County has capacity for 40% of demand for child care for children under six years old and just 29% of capacity for children under two years old. Counties unable to meet one third of demand are considered “child care deserts.”

Labor force participation — the number of adults of working age participating in the workforce — is at 64.9% in Yellowstone County and 63% across the state. In Yellowstone County, about 59.1% of women are in the workforce, compared to 58.1%across the state as a whole, according to Nitschke.

Early child care in the county costs $800 to $1,500 per child per month, or 13 to 25percent of the county’s median home income. The state’s cutoff for affordable childcare is 10% of household income.

“It’s the cost of putting a roof over your head to put one child in child care,” Nitschke said.

Though last year’s legislative session saw bipartisan support for child care legislation, child care is hardly accessible. So businesses can leverage child care benefits to attract employees.

“How can you make yourself a destination employer?” Nitschke asked the audience.

Nitschke advocates for employers implementing flexible spending accounts, childcare subsidies, paid parental leave and allowing for more flexible work and scheduling.

Though the cost of child care may seem exorbitant, running a child care business isn’t lucrative. Providers face high insurance premiums and operational costs due to staffing requirements. For every $1 a provider charges a family, about 60 percent goes to staffing, according to providers at Tuesday’s presentation. Making even 10%of the cost to families in profits is “next to impossible,” which makes reinvestment in the business and growth difficult.

And the average salary of an early child care provider in Billings is just $26,208, or$12.60 per hour.

“Low wages often prevent childcare providers from being able to recruit and retain a qualified workforce,” according to the Montana Department of Labor and Industry. This is one of the primary causes of the childcare shortage.

Sarah Schreiner, the owner of a child care facility in Laurel, argued that businesses could subsidize child care providers in exchange for employee spots in child care programs, which could lead to increased wages.

Nitschke and others also argued for tort reform, which would decrease the amount of money parents could recover in legal settlements with child care providers, thus decreasing insurance premiums and freeing up more revenue for compensating staff.

“We’re easy targets for settlements,” Schreiner said. “Insurance companies are pulling out because the industry is too high-risk.”

The average cost of a settlement against a child care provider is $25,000, according to Schreiner.

Zero to Five does not advocate for deregulation of the child care industry, which Nitschke said leads to lower quality care and increased insurance premiums.

See Presentation Here: