Long before our organization’s founding in 1978, women have had a historical familial role as the primary caregiver. Despite advancements toward gender equity, there is still a palpable expectation of women to solve their family’s and our society’s child care issues. We were reminded of this reality during the COVID pandemic when women of all income levels left the workforce to care for their children. And we have seen how this responsibility acts as a barrier to pay equity, business ownership and wealth generation. When paired with a shortage of affordable, quality child care options, women are often forced to drop out of the workforce, or experience gaps in their employment impacting their lifelong earnings.
Our state’s child care shortage and affordability challenges have reached crisis levels. Last year, Minnesota saw more than 200 in-home child care providers close their doors, and more than 15 child care centers close. According to Wilder Research, there are more than 330,000 children ages 0-4 in Minnesota with less than 8,000 child care providers to support families. And the average cost of center-based infant care in our state is more than the annual cost of college tuition at the University of Minnesota. 94 percent of Minnesota families have insufficient income to meet the federally recommended cost for child care, which is seven percent of income.
As a working mother of four children, I know this crisis all too well, and am proud to represent a Minnesota nonprofit organization working to help solve it. In addition to offering child care providers the tools and skills needed to run profitable and sustainable businesses, WomenVenture has deployed nearly $500K in microgrants and loans to 19 child care business providers since the beginning of 2024. Support from our donors and the State of Minnesota will allow us to deploy $1 million to providers by the end of June 2025, allowing businesses like Home Away from Home Childcare to receive financial consulting services and support to expand capacity.
We encourage a multi-faceted approach, with the State of Minnesota playing its part. On the supply side, the state must provide targeted incentives to increase the number of licensed child care businesses and livable wages for providers – recognizing the crucial role this industry plays in shaping the wellbeing of future generations and our economy.
On the demand side, Minnesota must provide greater support for families with young children by expanding subsidies and financial assistance to make child care more affordable for low- and middle-income families as proposed in the “Great Start” scholarship bill in discussion at the Capitol.
Lastly, more Minnesota employers and elected officials need to support flexible work arrangements, on-site child care facilities, and subsidies for their employees. (Dependent care Flexible Spending Accounts are capped at $5,000 year, a level set in 1986 when the annual cost of care for a toddler was about $3,300.)
We applaud recent efforts of elected officials, child care advocates and public-private partnerships to expand the supply of child care. More needs to be done. We have an opportunity to boost Minnesota’s economy by more than $2 billion if we can solve child care issues and support parents that want to be in the workforce.
It is well past time we acknowledge the ripple effect of this crisis on our state’s children, their caretakers, our economy, and the women who power it.
Author: LeeAnnRasachak, WomenVenture CEO
