NJ Child Care Gap Costs Businesses $2 Billion Every Year, Study Finds

Companies across New Jersey are facing an uncertain future as artificial intelligence, automation and global disruption play out on the world stage. But there’s one surefire way to help stabilize the Garden State’s workforce, experts say: child care.

That’s the key finding from an analysis released by the Moms First’s National Business Coalition for Childcare in partnership with the New Jersey Business and Industry Association.

Read the full study and learn about its methodology here.

According to the study, New Jersey businesses lose $2.28 billion a year due to child care disruptions, with more than half the cost borne by the “essential, high-interaction and shift-based workers who keep New Jersey’s core industries running” – and whose roles will persist even as AI becomes commonplace.

These workers include critical jobs as teachers, nurses, caregivers, customer service representatives and employees in the transportation and manufacturing industries.

Child care is the largest expense for many New Jersey families with young children – greater even than their rent or mortgage, researchers said.

“The findings underscore a profound economic reality: supporting child care isn’t a perk – it’s a workforce necessity, particularly for the foundational workers who sustain New Jersey’s essential industries,” NJBIA president and CEO Michele Siekerka said.

Some findings from the analysis include:

• 76% of New Jersey’s working parents are foundational workers — about 180,000 – and 9 in 10 parents reported experiencing child care disruptions that impacted their work, ranging from missing work to reduced productivity at work to leaving the workforce altogether. Absenteeism alone affects 125,000 parents each year in New Jersey, costing employers $520 million.
• New Jersey’s top 5 industries hurt most from childcare disruptions are healthcare; education; trades, construction, and industrials; transportation and logistics; and retail, representing $550 million in total losses. Child care instability undermines day-to-day operations in these sectors, driving up turnover, reducing availability of skilled workers, and shrinking the pipeline of experienced employees.
• Across 11 common employer interventions — ranging from backup care and childcare stipends to on-site centers and predictable scheduling — the analysis found a universally positive return on investment, with returns ranging from 5% to 300% or more.

The New Jersey data builds on national findings that child care disruptions cost U.S. businesses up to $70 billion annually, researchers said.

New Jersey accounts for about 3 percent of the $70 billion, which matches its share of the country’s overall economic output. But, while the findings for New Jersey mirror the national pattern, Garden State parents leave their jobs at a rate above the national average because of their inability to find and afford reliable child care.

“As companies race to adopt AI, the foundational workers our entire society depends on aren’t going anywhere,” said Reshma Saujani, founder and CEO of Moms First.

“Without child care, they can’t work,” Saujani said. “When a nurse can’t find last-minute care, that’s a shift missed. When a teacher’s daycare closes, a classroom goes unstaffed.”

“If companies want a chance at growing in an era of disruption, investing in child care is one of the smartest bets they can make,” Saujani urged.

The findings from “Investing in Childcare: How U.S. Businesses Can Unlock Up to $70 Billion by Providing Childcare Benefits” were developed with support from McKinsey and Company, which presented both national and New Jersey data at an Executive Business Roundtable of employers, industry associations, and community organizations recently convened by Moms First and NJBIA.

• Related: NJ Moves Forward With Free Preschool, Kindergarten For All Residents
• Related: These NJ Kids Are ‘Falling Through The Cracks,’ Report Says: See The Latest Data

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