Recently, some of Alaska’s business organizations, like the Anchorage Chamber of Commerce and the Alaska Chamber of Commerce, have identified the lack of access to quality, affordable child care as one of the top obstacles to economic recovery from the pandemic. Child care supply is low and the demand is high; this is reflected in high costs for parents and tough financial decisions about whether they will rejoin the workforce. As an independent business owner, I urge the Legislature to respond to this hindrance to workforce development with strong policymaking that will provide fiscal stability for our child care sector. Although the Legislature is considering a couple of bills that could have a positive impact on the sector, legislation introduced to date is inadequate.
One potential solution could be the creation of a Child Care Trust Fund. The Alaska Legislature could capitalize on the recent dramatic rise in oil prices by seeding a fund and following a percent-of-market-value model where draws are based on average earnings. As this investment is carefully managed and grows, sustainable draws would assist in the expansion of our child care system so that we have an adequate supply of caregivers. This would help ensure that caregivers earn high-enough wages to reduce the extraordinarily high turnover rate that is plaguing the industry. Until and unless we have enough child care workers, professional parents may not be able to get back to work and help our economy reach its full potential. Additionally, the fund could help stabilize costs to working parents.
The U.S. Chamber of Commerce Foundation recently partnered with the Alaska Chamber of Commerce to document the urgent need to address child care. The Chamber found that insufficient child care reduces state economic output by $165 million annually. Seventy-seven percent of parents report missing work due to inadequate child care, and 36% of parents have delayed entering higher education or training due to a lack of child care. A stunning 40% of respondents to the chamber survey report that someone in their household has been forced to leave work, not take a job, or change jobs due to challenges with child care in the last year. In a recent survey of its membership, the Anchorage Chamber of Commerce reported that lack of child care was the second-biggest barrier to workforce development after lack of qualified applicants. Clearly, we must fix this sector to ensure Alaska’s broader economy can thrive.
To date, Alaska’s child care policies have been set by the Department of Health and Social Services’ Child Care Program Office. Lawmakers have proposed legislation, HB 149, to provide child care providers with a stronger voice in allocating child care resources, and there’s no question that child care providers should have a seat at the table in deciding how to balance funding between wages, training, number and scale of subsidized child care slots and other key decisions. While it is worthwhile to strengthen providers’ voice in decision-making, a Child Care Trust Fund would ensure there are sufficient resources.
Every day that we fail to address the child care crisis, Alaska businesses miss out on opportunities to grow and innovate. We have to ensure professional-age parents can get back to work and grow Alaska’s economy. Lawmakers should consider passing legislation to create a Child Care Trust Fund, in addition to considering more modest measures to stabilize this sector.
Dr. Daniel Volland is a licensed optometric physician, small-business owner, vice president of the South Addition Community Council, and member of the Anchorage Chamber of Commerce Legislative Committee. The views expressed here are his own.
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