Childcare Problem ‘Has Definitely Bruised’ Economic Futures, Says Detroit Advocate

Lifelong Detroiter Barbara Young left the workforce about 15 years ago to watch her children, unable to find childcare fitting within her budget. Today, she believes unaffordable and unavailable childcare “has definitely bruised” Detroit’s future.

Young spoke to MIRS after a more than hour-long Senate Housing and Human Services Committee meeting. The Thursday afternoon gathering zoomed in on Sen. Kristen McDonald Rivet (D-Bay City)’s SB 838, which offers low-income families a $5,500 yearly tax credit, to be distributed as refundable monthly payments to offset childcare for youths under 3 as long as the parents are working.

Also discussed Thursday is a proposal for operational grants to childcare providers serving children under 3. McDonald Rivet said Thursday afternoon that the plan overall requires an additional $1.5 billion investment from the state in the next fiscal year.

“I understand that this is a substantial investment. I do. But the total cost pales in comparison to the cost of no action,” McDonald Rivet said.

She referenced a Sept. 5 report affiliated with the U.S. Chamber of Commerce Foundation, the Michigan Chamber of Commerce and the Lansing-based Early Childhood Investment Corporation. It is estimated that childcare issues result in $2.88 billion being lost annually from Michigan’s economy, as well as $576 million lost each year in state tax revenue.

The report found that 14 percent of parents in Michigan left their job in the previous six months due to childcare.

More than a decade ago, Young left a job she loved as a medical assistant, recording patients’ vital signs and doing administrative work. She said for her, the job was very fulfilling and meaningful. First coming in, the job offered up to $35,000 in yearly salaries, and she saw the potential of earning more if she got 10 years of experience in the field.

On top of her job, Young’s husband was receiving benefits as a U.S. Navy veteran. But she said those income sources were not enough, especially with one of her sons requiring autism services and her youngest daughter being diagnosed with scoliosis and arthritis.

“We had to make the decision sometimes that it was either groceries or medicine, groceries or a doctor’s visit,” she said. “If you can’t afford childcare, and you’re creating all these jobs, you’re just gonna have an empty building, because until we get the childcare taken care of, that (job building) problem is not going to be able to excel either.”

The Michigan Chamber perceives that since 2019, the share of Michiganders with a family member who’s left, refused or significantly changed a job because of childcare has grown from 14 percent to 31.9 percent, explained Leah Robinson, the Chamber’s legislative affairs director.

Robinson said the data could mean the family member didn’t take a promotion, transitioned from full-time to part-time or “they just simply could no longer afford to work.”

“That means that almost a third of our workforce here in Michigan makes employment decisions based off of childcare resources,” Robinson said.

As for the operational grant component of McDonald Rivet’s proposals, the Fiscal Year (FY) 2025 budget sets aside $24 million in one-time General Fund dollars to assist eligible child care providers receiving Child Development and Care (CDC) program subsidies, serving poor Michiganders with children under 13.

But McDonald Rivet imagines something much bigger.

“The reality is that it costs more money to provide childcare, (particularly for) an infant and toddler than what parents can afford to pay,” McDonald Rivet. “What the operational grants have done, and my proposal is for infants and toddlers, is to take the amount of what the cost is to provide those slots and offer operational grants to provide the delta of what’s possible for parents to pay, and what it actually costs in order to provide care for those kids.”

Young is now back in the workforce, serving the social services organization Detroit Parent Network. What makes her interested in the operational grants is that her mother now runs a home-based childcare service with 11 children.

“In-home daycares don’t get as much as center-based (ones). They need that money, because they’re providing the same amount of care as a center-based daycare, but they’re not getting it,” Young said. “My mom has to buy a lot of things out of her pocket, so that means she might be a little late on a bill.”

Before Thursday’s meeting, McDonald Rivet and Dave Meader, the head of the Detroit Regional CEO Group, talked about SB 838 on this week’s episode of the MIRS Monday Podcast.

Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter

Click here for more News & Resources.