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New report: Child care issues result in $1.36B loss in Utah's annual economy

Charlotte, 5, reacts as Lt. Gov. Deidre Henderson reads a book to children at Creative Learning Academy in Salt Lake City on July 12, 2022. A new report released Wednesday shows the significant financial impact child care issues pose on Utah's economy.

Charlotte, 5, reacts as Lt. Gov. Deidre Henderson reads a book to children at Creative Learning Academy in Salt Lake City on July 12, 2022. A new report released Wednesday shows the significant financial impact child care issues pose on Utah's economy. (Jeffrey D. Allred, Deseret News)


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SALT LAKE CITY — As the youngest state with the highest birth rate, child care is crucial to Utah's economic infrastructure and provides a stable foundation for families.

A new report released Wednesday by the U.S. Chamber of Commerce Foundation in partnership with the Salt Lake Chamber, Utah Community Builders, United Way of Salt Lake and Voices of Utah Children reveals Utah's current child care landscape.

The report shows the significant financial impact child care issues pose on Utah's economy, as well as the specific hurdles parents face while navigating child care and work. The findings of the report highlight the value of access to child care for families and that solutions must be responsive to the distinct challenges of Utah, said Derek Miller, president of the Salt Lake Chamber.

"Child care is crucial to Utah's economic success now and provides a stable foundation for Utah to thrive as a top tier business environment in the future. By understanding the needs of parents and working to find public and private solutions, Utah will be better equipped to unlock the economic potential of parents whose employment and educational options are currently limited by their child care circumstances," Miller said.

Key economic findings in the report:

  • Child care issues result in an estimated $1.36 billion loss annually for Utah's economy.
  • Utah loses an estimated $258 million annually in tax revenue due to child care issues.
  • Absences and employee turnover due to child care cost Utah employers an estimated $1.1 billion per year.

While the report highlighted the impact child care issues can have on the economy, it also demonstrated the hurdles or barriers it presents for Utah families. Survey results and data in the study indicate a considerable need for child care support services to support parents pursuing career opportunities or a higher level of education.

Impact on parents by the numbers:

  • 43% of parents surveyed reported missing work or class at least once in the past three months.
  • 10% of parents voluntarily left a job due to child care issues.
  • 48% of parents in the past 12 months needed to make a significant adjustment to their school or work training due to child care issues.
  • 26% of parents have changed their child care arrangement due to COVID-19.

A 2019 analysis by the Bipartisan Policy Center estimated that 153,950 Utah children have both parents participating in the workforce and would require care, while there was a capacity of 55,460 formal child care slots and a resulting gap of 98,750 children. Another study by the Utah Department of Workforce Services estimated in 2020 that 54% of Utah children under the age of 6 require care from adults other than their parents.

"Utah's state regulated child care system is only meeting 35% of the state's child care need, leaving a gap of 65% between the need and the capacity," the report states.

The need and accessibility of child care is further impacted by the state's rural areas who are more prone to being a "child care desert," with 81% of rural residents living in an area without a sufficient number of licensed child care providers. While rural areas may face additional barriers, the impact spans most of the state with approximately 77% of Utahns living in a child care desert, according to the Center for American Progress.

Current child care dynamics, according to the report:

  • Parents primarily pick their child care provider based on affordability.
  • When it comes to cost, families pay an average of $561 per month for child care, although costs can vary dramatically by provider type and household income.
  • Families pay for child care out of their personal budget 59% of the time while 30% don't have child care costs.
  • In the majority of Utah counties, households pay between 10% and 20% of their annual income for a child to attend in center licensed care. The U.S. Department of Health and Human Services outlines that a family should pay no more than 7% of its household income to be considered affordable.

"Child care is the key to getting out of poverty for both the family and the child. If you're a parent with kids — you cannot work, you cannot go to school and afford housing without high quality child care, and child care is not particularly affordable. And so families who don't have that piece of the equation, it's virtually impossible to break the cycle of poverty," said Bill Crim, United Way of Salt Lake president.

The report acknowledges the different and unique dynamics that Utah presents regarding child care and family choices.

While 49% of parents in Utah with a child under the age of 6 have both parents participate in the labor force, 46% have only the father in the labor force. Women most often reported choosing to stay at home with their child at 36%, compared to men at 3%.

The data notes that for 43% of two-parent households, the ideal child care arrangement is to have one parent work full-time while the other does not. While this may be an option for some families and a reason why one parent may not choose to pursue further education or career opportunities, the report notes the option to do so should still be made available.

"Our hope is that this report will help Utah policymakers understand better that our broken child care system negatively impacts much of these young children and their families but (also) our entire state as the economy," said Crim. "We've known for a long time now that we have a moral obligation to invest in the health, safety and future success of young children, including those who are regularly in child care settings."

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Ashley Fredde covers human services and and women's issues for KSL.com. She also enjoys reporting on arts, culture and entertainment news. She's a graduate of the University of Arizona.

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