By Bailey Vincett, Director of Government Relations at Charleston Metro Chamber of Commerce
The childcare crisis isn’t just a family issue—it’s a two-generation workforce challenge affecting both parents and children. Without affordable and accessible childcare, parents face limitations in their ability to work, while a child’s early development and future career readiness can be hindered by inconsistent care and education. Expanding the accessibility and affordability of childcare is essential for improving the economy and supporting the workforce of today and the future. Investing in childcare solutions benefits businesses by creating a more stable and productive workforce, while also helping develop a stronger future labor force.
Economic Impact of the Childcare Crisis
In South Carolina, the childcare crisis is estimated to cost the state’s economy $1.4 billion annually. With only 56.4% of eligible adults working or actively seeking employment in 2022, South Carolina’s labor force participation rate is one of the lowest in the nation. A significant barrier to workforce participation is the lack of accessible and affordable childcare, as highlighted by the SC Labor Force Participation Task Force Survey. The shortage of childcare spaces not only affects families but also impacts businesses and the economy as a whole.
Childcare Staffing Challenges Lead to Quality Concerns
Childcare providers in South Carolina are facing a critical staffing shortage that is undermining both the availability and quality of care. Centers must meet state staffing requirements to ensure child safety and development, but without sufficient staff, they cannot operate at full capacity. Providers are often forced to turn away children to comply with regulations. The high turnover of early care workers further destabilizes childcare centers, resulting in inconsistent care that negatively impacts children’s developmental outcomes.
Recommendations for Expanding Accessibility and Affordability
To address the childcare challenges impacting working parents and the broader economy, the Charleston Metro Chamber is recommending prioritizing the following:
- Childcare Scholarships for Early Care Workers: Offering scholarships for early care teachers to receive free childcare could significantly increase workforce participation, expand the tax base, and stimulate economic growth. According to the SC DEW labor force participation study, childcare issues—such as lack of available care (14%) and parents staying home with children (13%)—are major barriers to workforce engagement. By providing free childcare to early care workers, South Carolina could encourage more individuals to enter and remain in the workforce, benefiting the economy.
- SC Boo$t Funding: Allocating $26 million to the SC Boo$t wage enhancement program will help address chronic workforce shortages and high turnover in the childcare sector. Caregivers are paid lower than 98% of other professions, which impacts care quality. By increasing wages, the state can attract more skilled professionals, reduce turnover and ensure high-quality care that supports early childhood development, ultimately leading to better educational outcomes for children.
- Reimbursement Rates: The Cost of Care study reveals a significant gap between the actual cost of childcare and the reimbursement rates provided by Child Care Scholarships. Centers accepting these payments are losing money, leading to lower wages for staff and higher turnover. Increasing reimbursement rates is crucial for ensuring that childcare providers can operate sustainably while maintaining high-quality care. This would improve the financial viability of childcare centers and the quality of services offered to families.
A Strong Workforce Starts with Childcare
Expanding access to affordable and high-quality childcare is crucial for building a strong future workforce. While we recognize that improving childcare will require significant investment, we firmly believe that this investment is not only necessary but worthwhile. We are open to exploring new and consistent revenue streams dedicated to childcare, whether through public-private partnerships, targeted taxes or other mechanisms, to ensure a resilient economy, benefiting businesses, families and the state as a whole.
