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Thanks to previously unpublished Labor Department data, KPMG is now reporting the number of U.S. workers each month who are cutting their hours due to a lack of childcare options. The high cost of childcare has been well-documented: Its impact on the wallets of working parents, the careers of many women and the time workers spend finding quality childcare. But a new monthly index aims to not only show how women and men lose out financially due to childcare options, but quantify the number of working hours lost, demonstrating the high productivity cost to businesses that don’t offer reliable solutions. ...READ THE FULL STORY FROM SOURCE ↔️
KPMG, the professional services firm, recently released the “Parental Work Disruption Index,” building on previously unpublished data from the Bureau of Labor Statistics that breaks down the loss in working hours, as well as yearly and lifetime wages, that stem from a lack of childcare access. Using a 12-month trailing average, the index also measures the change in the number of both male and female workers who have lost hours or shifted into part-time work due to childcare gaps since 2019.
“We know childcare costs prevent labor participation and that the childcare problem really hits both sides of the [gender] equation,” says Mathew Nestler, senior economist at KPMG US and author of the index, which the firm plans to update monthly. “But to what degree are childcare problems affecting working Americans?”
The index also quantifies the total working hours lost based on employees shifting their schedules, a key metric in quantifying productivity costs to businesses. While business sector productivity increased by 2.5% in the second quarter of this year, looking at total working hours lost can help show business leaders the impact of absentee workers on their bottom line, says Nestler.
“This is one more excellent data point on what the child care crisis is costing our economy and what is on the line if we fail to address it,” Reshma Saujani, an activist with the organization Moms First, said in an emailed statement.
Julia Coehn Sebastien, cofounder and CEO Of Grayce, a caregiving marketplace employers can offer as a benefit, says that because employers often don’t have great data specifically on caregivers within their workforce, “they don’t understand the size of the challenge” unless they visibly witness people missing work, she says.
Employers are not just missing out on understanding the scale of lost work hours. Coworkers picking up the slack for absentee workers leads to increased rates of burnout for everyone else. “The index is a clear way for companies to understand the strains in the labor market,” says Nestler. “The loss in working hours is valuable to companies because [it quantifies] the childcare problems their employees are having.”
Annual childcare costs in the U.S. now total more than average annual rent costs in all 50 states. KPMG estimates that between 1.2 and 1.5 million workers, 90% of whom are women, either shorten working hours or miss work entirely each month because of childcare access. The loss in work hours, estimated to range between 26 million and 1.4 billion hours per year, causes a blow to family earnings. The index found that losing just one hour of work each week due to a gap in childcare results in an annual loss of between $780 and $1,504.
Women between 25 and 44 are still most impacted by the cost of childcare, accounting for 70% of all workers affected by childcare costs, KPMG’s index found. They made up 77% of full-time employees missing work because of childcare problems through September of this year, though that’s down from a 2006 high thanks to an increase in men’s share. Of those working part-time because of childcare problems, 90% are women, the index found.
Says Saujani: “Women can’t work without affordable and available care–period.”
But increasingly, men also struggle due to childcare access. About 34% of workers who cut their full-time hours to part-time because of childcare so far this year were men. While still a fraction of the women having to leave, the number of men in this category nearly doubled from September of last year to about 40,000 last month, the KPMG index found.
Meanwhile, the index doesn’t measure the full impact of a lack of quality, affordable childcare on careers, particularly women’s, says Joseph Fuller, a professor of management at Harvard Business School and co-lead of its Managing the Future of Work initiative. For workers who must scale back their work hours because of childcare, “the correlation is not just that you get stuck in a lousy job,” he says. “When you get hired again, your next job is more likely to be unattractive. And you’re also not adding credentials that get you on an upward mobility path.”
The index shows these are not just costs to individuals, but to businesses, too. Talent replacement costs can top three- to four-times the departing employee’s salary, according to SHRM. If employers don’t understand their people are leaving because of childcare costs, and don’t survey them on what they would want from the company, says Fuller, replacing them is going to be a big cost. “If you’re not soliciting that data, you’re always getting surprised,” he adds.
The new Parental Work Disruption Index also reveals that the number of employees leaving the workforce due to childcare costs has reached a post-pandemic high: In September 2024, 1.6 million employees either worked fewer hours or shifted to part-time work because of childcare problems, according to KPMG. That measure is a 69% increase from the average of the same month in the previous four years.
This year’s rise was boosted by an increase in “voluntary” or “noneconomic” part-time workers who experienced childcare problems, Nestler says its research showed. (The Labor Department calls people who work less than 35 hours a week by choice or because they’re unable to work more, voluntary or noneconomic). But he questions how voluntary such schedules really are. “To what degree is it voluntary to not work, work part-time or reduce work hours because of the lack of access to affordable childcare?”...For More READ THE FULL STORY ▶▶
