by Guest Author Meredith Archie
President of the NC Chamber Foundation
Sr. VP of External Affairs for the NC Chamber
Co-Chair of the NCIOM Task Force on Essentials for Childhood

Summary

Child care is a critical support for our communities to enable a parent to work and provide for their family, and for a child to receive foundational life skills. Both are required for healthy children, healthy families, and healthy communities. North Carolina currently has insufficient child care availability, but that can change.

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Child Care and North Carolina's Untapped Potential

The health of North Carolina’s economy is directly tied to the strength of its workforce. Currently, our state is not realizing its full potential when it comes to both families and economic competitiveness.

Affordable, quality child care supports working parents on the job, allows businesses to recruit and retain talent, and helps North Carolina children develop skills for success in school and life. The NC Chamber Foundation commissioned a 2023 statewide survey of North Carolina voters, which showed that North Carolinians are experiencing a child care crisis that is hurting families and making it hard for businesses to hire employees and grow [1]. That crisis has only continued to worsen.

Families Are Struggling

Lack of quality, affordable child care is causing parents to leave the workforce or turn down opportunities—exacerbating North Carolina’s labor shortage and threatening business and economic growth.

In 2023, research from the U.S. Chamber of Commerce identified North Carolina as having a severe worker shortage, with 62 available workers for every 100 open jobs [2]. In the same year, in a survey of eligible voters, North Carolina parents of children under the age of 5 provided measurable data of their actions related to child care [1]:

• 26% said they left the workforce because they couldn’t find affordable child care.
• 60% said they had to miss work because of a problem with child care.
• 37% refused a job opportunity, promotion, or job change because it would increase child care expenses.
• 32% did not pursue job training or continuing education because of a lack of affordable child care.

While those statistics have an economic impact, they also have a staggering impact on the health of families and communities.

In the same survey of eligible voters, 79% agree that quality, affordable child care is important to strengthen the economy and help workers provide for their families.

• 95% of North Carolinians say quality child care programs help ensure that workers are able to go to work reliably.
• 94% say that quality child care programs help children develop important social skills, such as self-confidence, self-discipline, and the ability to work well with others.
• 93% agree that quality child care programs help children have academic success in school.

Child care is a critical support for our communities to enable a parent to work and provide for their family, and for a child to receive foundational life skills. Both are required for healthy children, healthy families, and healthy communities.

Lost Economic Potential

In 2024, North Carolina was selected by the U.S. Chamber Foundation for an installment of its Untapped Potential research [3]. In partnership with the NC Chamber Foundation and NC Child, the U.S. Chamber Foundation commissioned a survey of 517 North Carolina parents with children under the age of 6. Survey results were then used to model an estimate of the direct financial impact of insufficient child care coverage on North Carolina’s economy.

The report determined that child care breakdowns are costing North Carolina $5.65 billion in lost economic activity each year [4].

• Child care-related employee turnover and absenteeism cost North Carolina employers an estimated $4.29 billion per year.
• North Carolina misses an estimated $1.36 billion annually in tax revenue due to turnover and absence costs stemming from child care issues.
• In total, child care issues result in an estimated $5.65 billion annual loss for North Carolina’s economy.
• 35% of parents that experienced disruptions to their employment in the past year reported leaving the workforce as a direct result of issues with child care.
• 15% of working parents are planning to leave employment over the next 12 months—18% of women and 13% of men.

The survey results estimate how often parents are missing work or educational opportunities because of insufficient child care, which is then used to model the financial impact to the state’s economy to understand the untapped economic potential due to child care breakdowns. The results highlight the challenges facing North Carolina families with young children and clearly show the need for flexible access to high-quality, affordable care.

Aaron Merchen, senior director of policy and programs in early childhood education for the U.S. Chamber of Commerce Foundation said, “North Carolina’s child care gaps drive parents out of the workforce, reduce tax revenue for the state, and put undue strain on households—particularly among the most economically vulnerable. While these challenges are complex and persistent, they are addressable, and the business community will play a central role in developing solutions that benefit all North Carolinians.”

Leading on Solutions

Seeking workable, employer-focused solutions for consideration in North Carolina, the NC Chamber Foundation examined child care policies in 28 states with similar population growth and governance, as well as recommendations from North Carolina organizations and recent state and local actions.

The resulting 2025 report outlines 11 potential strategies to expand the supply of accessible, affordable, high-quality child care in North Carolina, and achieving success requires progress in 4 critical areas [5]:

1. Increase the number of high-quality licensed child care providers in North Carolina (centers, family child care homes, and religious-sponsored).
2. Develop the qualified child care workforce needed to fully utilize capacity in high-quality licensed child care facilities and family child care homes and help expand supply.
3. Enhance child care jobs and careers through competitive employee compensation.
4. Make more high-quality child care options affordable for more North Carolina families.

If we can make progress on the policy solutions available in these four areas, North Carolina can lead on solving this crisis, which is not unique to our state. The stakeholders have been collaborative, including child care providers, employers, policymakers, and, most importantly, families. We must continue to operate with a bias for action, because our children, our families, and our communities are counting on us to get this right.

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Guest posts represent the author's views and do not necessarily reflect those of the NCIOM.

References

1. NC Chamber Foundation child care survey findings. NC Chamber Foundation. May 10, 2023. Accessed April 17, 2025. https://ncchamber.com/2023/05/10/nc-chamber-foundation-child-care-survey-findings-summary/

2. Understanding America’s labor shortage: The most impacted states. U.S. Chamber of Commerce. December 13, 2024. Updated February 11, 2025. Accessed April 17, 2025. https://www.uschamber.com/workforce/the-states-suffering-most-from-the-labor-shortage

3. Untapped potential: Economic impact of childcare breakdowns in the U.S. U.S. Chamber of Commerce. Accessed April 24, 2025. https://www.uschamberfoundation.org/solutions/early-childhood-and-k-12-education/untapped-potential

4. U.S. Chamber of Commerce Foundation; NC Chamber Foundation; NC Child. Untapped potential in NC: How childcare impacts North Carolina’s workforce productivity and the state’s economy. United States Chamber of Commerce Foundation. 2024. Accessed April 17, 2025. https://ncchamber.com/wp-content/uploads/Untapped_NORTHCAROLINA_053124_DIGITAL.pdf

5. Addressing North Carolina’s Child Care Crisis. NC Chamber Foundation. February 26, 2025. Accessed April 17, 2025. https://ncchamber.com/foundation/child-care/report-addressing-north-carolinas-child-care-crisis/