Financial Consequences of Orange County’s Child Care Shortage Exceed $4 Billion

By Vanessa Serna
Vanessa Serna
Vanessa Serna
June 3, 2021 Updated: June 3, 2021

A shortage of child care agencies in Orange County, California, has resulted in a loss of more than $4 billion annually in lost production and wages, officials say.

Child care advocates said that more than 67,000 jobs are lost every year in Orange County, and $372 million is lost in tax revenue, due to a lack of child care options.

“These dire economic impacts—combined with the difficult personal decisions the crisis forces—are a flashing red light for Orange County’s financial health and future prosperity,” Kimberly Goll, executive officer of First 5 Orange County, said in a statement. “Our child care crisis is taking a massive toll not just on local businesses’ workforces, but on the tens of thousands of families who are impacted by child care challenges.”

First 5 Orange County, a children and family organization, said it’s responding to the economic impact of the child care deficit by attempting to bring recognition to the importance of child care in the workplace.

By its estimates, the economic impact on Orange County employers exceeds $2 billion each year due to factors such as absenteeism, turnover, and recruitment. The economic impact on Orange County families and the overall economy is about $2.27 billion, the organization said. Voluntary and nonvoluntary work departures, a reduction of workforce, and parental withdrawal from the workforce contribute to that figure, it said.

According to research conducted by First 5 Orange County, 40 percent of parents and guardians said that the expense of child care, combined with accessibility challenges, prevented them from working at some point.

Additionally, one in five people arrive late to work late, and one in six leave work early due to child care gaps. Ongoing challenges result in 1 in 10 people either losing or resigning from their jobs and 1 in 11 reducing their hours to accommodate child care needs, research found.

The report also pointed to a lack of infant and toddler care options in Orange County; it said that if one-third of infants and toddlers required child care, there would still be enough licensed child care facilities to accommodate just one in seven children.

The data provided was conducted from surveys and interviews with more than 50 Orange County employers that represent more than 71,000 employees.

Challenges identified by parents and guardians include affordability, convenience of location, and quality care, said NP Strategies President Rebecca Alvarez.

“Parents said they need one [or] more affordable quality options or assistance covering the cost so that they can make it work,” Alvarez said. “More flexible hours that meet work schedules when factoring pick-up and drop-off time, including shift hours and weekends, … assistance finding quality child care, and greater flexibility at work and support from their employers.”

Of the businesses First 5 interviewed, child care was a rising issue in human resources benefits.

Larger employers have resources to offer benefits such as dependent care flexible spending accounts, assistance finding care, and contribution to health insurance for all family members.

To assist in supporting parents, some organizations have proposed the idea of providing physical space for a child care facility, but they lack the tools. First 5 said it aims to engage participation from private and public sectors to address the child care crisis by adopting feasible tactics.

First 5 concluded that a 2 percent increase in women in the workplace would provide 2,657 jobs, $174.9 million in additional earnings, and $14.6 million in additional tax revenue.

Vanessa Serna
Vanessa Serna