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There is a childcare crisis. SSTI members are working on solutions.

July 20, 2023
By: Michele Hujber

Every year, inadequate childcare causes the US economy to take a $122B hit, according to a study by an economist at the University of Pennsylvania. This economic hit affects everyone—workers, businesses, and taxpayers. Parents lose income when they miss work to take care of a child. Businesses suffer from lower productivity when employees are absent. Taxpayers end up paying more when parents leave the workforce and generate fewer tax revenues. Future economic growth slows when tax revenues decline.

The COVID pandemic brought this issue to the forefront. “… COVID amplified how crucial and under-resourced the childcare sector is. And also how vital it is to our economy,” said Tara Colton, executive vice president of economic security at the New Jersey Economic Development Authority. “Now we talk about (childcare) as (part of the) economic infrastructure. We see … the significant impacts of (inadequate childcare) on the ability of our economy to function and the ability of people to return to the workforce, advance in the workforce, etcetera.”

Throughout the country, these issues are being addressed by SSTI members and their close associates.

City of Beaverton

In Oregon, The City of Beaverton, an SSIT member, has two programs that create new childcare slots so parents can stay in the workfoce and expand the number of childcare workers to do so.

The first is the Childcare Startup and Expansion Program. “Beaverton’s Economic Development Department determined that providing cash grants to incentivize new and expanding centers and home-based childcare businesses should be our focus,” wrote Bill Berg, business development manager in Beaverton’s Community Development. The city awarded nine grants that funded facilities for 161 more kids and employed 30 more staff members.

West Side Works connects childcare businesses with students from Portland Community College’s (PCC's) Early Childhood Education program to increase the number of qualified childcare workers. The program is a partnership of Beaverton’s Economic Development Division, Washington County, Worksystems, Inc., and PCC. ARPA funds cover student wages.

Fourth Economy

SSTI member Fourth Economy, a national community and economic development consulting firm, often discusses with their clients how they can incorporate childcare supports into their programs. "Fourth Economy defines the childcare need and then talks about ways to increase childcare opportunities, through such things as policy, funding, or programming," said Megan Nestor, an expert in childcare policy at Fourth Economy. Nestor suggests that the most effective models for childcare are public-private partnerships. An excellent model of this, she said, is the Michigan Tri-Share Childcare Program. Through this program, employers, employees, and the state share equal amounts of childcare expenses.

“It makes so much sense for economic development and business to be thinking about childcare,” Nestor said. “It supports a full and healthy economy, and it brings women into the workforce and keeps them there. It brings families to cities and places and brings people to regions and hubs. Having good childcare options is an economic development issue.”


The New Jersey Economic Development Authority (NJEDA), which is closely affiliated with SSTI member New Jersey Commission on Science, Innovation and Technology, is helping childcare centers make facility improvements via the Child Care Facilities Improvement Program Grants program. This program is primarily focused on improving the physical infrastructure of childcare centers. The program provides money for facilities maintenance that haven’t historically been eligible for state grants. Tara Colton, executive vice president of economic security at the New Jersey Economic Development Authority, notes that locating these grants for childcare facilities within NJEDA sends a strong message that adequate childcare plays a critical role in the state's economy.

The expected impacts of the program are to improve the quality and safety of childcare environments. In addition, NJEDA envisions significant economic impacts from the program. Many centers can’t run at full capacity, and thus make less money, because they cannot afford to make improvements. “We help them avoid this Catch 22,” Colton said. “If they have more children there, they could in many cases earn more money.”

Improved facilities will also help the centers qualify for higher levels of federal funding from the Child Care Assistance Program. “So many of the providers can't get the higher rate because of their facilities,” Colton said. “If we improve their facilities, they can make more money serving the same child because we've helped them cross into that next level.”

University City Science Center/Washington University and BioSTL

The University Science Center in Philadelphia has incorporated childcare into two STEM-focused programs. One, FirstHand, is a free out-of-school time (OST) youth STEM education program. OST scheduling helps working parents keep kids in safe, supportive, enriching settings during parents’ workday, playing an essential role when affordable childcare is scarce. The program also runs during daytime hours. The second program, Building an Understanding of Lab Basics (BULB), gives adults introductory lab training. Participants receive stipends that allow them to pay their bills and care for their families while they complete training.

Two other SSTI members, Washington University and BioSTL, coordinate training for a program in St. Louis, MO that is similar to BULB, in that it that combines bioscience industry training with childcare.

Here are more program examples

SSTI members also told us about many more programs that they admire. Here are links to a few of them:

  • Excel by 8, a statewide nonprofit that, wrote Bryan J. Barnhouse, president & CEO of SSTI member Arkansas Research Alliance, is helping Arkansas in “taking this important issue head on.”
  • Child Care WAGE$® Program provides salary supplements to low-paid teachers, directors, and family childcare providers.
  • The Cube offers babysitting while mothers use the coworking space. The Cube is the largest Black women-owned coworking space in the US.
childcare, economy, economic impact