What do Marriott, Home Depot, Patagonia and Walmart have in common? These businesses offer benefits like onsite child care and stipends to help their employees acquire and afford child care. Spurred by government incentives and a desire to attract and retain talent, a growing number of companies are taking an active role in the provision of child care for their employees. In fact, 11 percent of American workers had access to an employer-sponsored child care benefit as of 2020.
Employer-sponsored child care has received substantial praise, but some child care policy experts are urging caution. In his new report entitled, Questioning the Promise of Employer-Sponsored Child Care Benefits, Early Learning Nation contributor Elliot Haspel takes a critical eye to the subject and raises some important questions, including:
- Is it appropriate for businesses to play a prominent role in procuring child care?
- What are the philosophical complications associated with this approach?
- What are the benefits and the risks attached to employer-sponsored child care?
- What alternative models still engage employers?
Last month, New America’s Better Life Lab hosted a virtual panel with child care advocates and policy leaders to discuss their reactions to the report. Brigid Schulte, author and director of the Better Life Lab, began the discussion and introduced Haspel. Rebecca Gale, award-winning journalist and staff writer at the Better Life Lab, moderated the event.
Panelists:
- Erica Phillips, Executive Director, National Association for Family Child Care
- Nicole Riehl, President & CEO, Executives Partnering to Invest in Children (EPIC)
- Carmi Medoff, Founder & CEO, OnsiteKids
- Miriam Calderón, Chief Policy Officer, Zero to Three
Here are the key findings.
1.Embracing child care as a work support raises major philosophical questions.
The rise of employer-sponsored child care prompts philosophical questions: what is child care, and who is it for?
Child care helps parents (especially mothers) stay connected to the workforce and keeps our economy running, but being a “work support” is not its only function. Haspel is concerned that if child care is viewed as merely something to keep kids safe while their parents are working, then there is little incentive to nurture a high-quality, pluralistic system that relies on a valued and well-compensated workforce. He coined the term minimum viable child care fallacy to describe the problem.
Haspel also claimed that promoting employer-sponsored child care benefits weakens the argument in favor of a universal system and reinforces the idea that child care is a private good. Supporting employer-sponsored child care could contradict the argument that advocates have been making for decades: that child care is a public good worthy of robust, sustained government investment.
Embracing employer-sponsored benefits places child care in a category of services that an individual must navigate on their own and potentially procure with help from their employer, such as healthcare or a gym membership, rather than in the same category as public schools.
2.Employer-sponsored child care raises concerns about access, equity and fairness.
Employer-sponsored child care benefits, especially benefits like onsite centers, “tend to flow pretty disproportionately to higher earning, white collar-workers, and usually those who are working at a headquarters office,” according to Haspel. Small businesses are unlikely to have the resources to offer these benefits to their employees. Further, part-time and frontline workers are frequently excluded, and millions of freelancers and “gig” workers are ineligible entirely.
As Haspel noted in the report and Erica Phillips echoed during the panel, employer-sponsored child care benefits tend to favor formal care in a center setting and are “not inclusive.” Options that millions of families rely on, such as home-based child care programs, faith-based centers and Family, Friend and Neighbor (FFN) care, can be left out of the equation, and the choices available to parents are limited.
Employer-sponsored child care can also contribute to “job lock,” which limits worker mobility and forces parents to stay in positions they might otherwise leave. Haspel argued that linking child care to employment puts parents in a bind: If they lose their jobs, then they also lose their child care.
3.Some experts are optimistic about the rise of employer-sponsored child care and claim it can expand supply, build capacity and be an on-ramp to continued advocacy.
Panelists, except Haspel, believe that employer-sponsored child care can play a pivotal role in system and capacity building. They argued that business capital could help build new child care centers, increase supply in rural areas and reduce strain on an overwhelmed child care system. Nicole Riehl supported this idea, citing examples from her experience at EPIC, where she worked with small and medium-sized companies to help them build child care centers in rural areas that also serve their broader community and not just employees.
According to Carmi Medoff, employer-sponsored programs also “have an opportunity to provide stable, well-funded positions for early childhood educators,” and to improve both the quality and quantity of educators entering the field. She added that with capital from employer sponsorship, we can make early childhood education a “rewarding and sustainable career path” and ensure “the pipeline stays open.”
These panelists also believe employer-sponsored child care can inspire new advocates and advance our nation toward a universal system rather than detract from long-term goals. A growing number of businesses are raising their hands and taking an active approach to child care.
Miriam Calderón believes child care policy experts should work with these businesses to find palatable solutions, identify funding options and educate them about why a publicly funded system could benefit them.
According to Riehl, “employers implementing these solutions and becoming more familiar with the business model of child care and the financial challenges that exist in that space are also becoming greater advocates.”
4.There are reasons to be skeptical about employer involvement in child care.
Haspel described corporate attitudes towards major child care proposals as “checkered at best” and claimed there is “strong evidence that business interests are not always the friend to the child care sector.” Many businesses lobby in favor of tax cuts and regularly fight corporate tax increases that could fund child care programs.
Haspel noted that the U.S. Chamber of Commerce launched a six-figure ad campaign against the Build Back Better Act, defeating legislation that would have supported $400 billion in child care funding.
Employers have also proven to be “fickle” and can change their minds about what child care benefits they offer their employees. In tough economic times when businesses are looking for a way to cut expenses and improve profitability, child care programs may vanish altogether. Haspel cited two recent examples, Google and General Mills, which shut down their onsite child care centers as cost-cutting measures.
Employer-sponsored child care might benefit employees, but these programs are fragile and potentially temporary. Changes in economic conditions can pose a serious threat to child care benefits. As cited in the report, 30 percent of companies say they plan to scale back child care benefits in the event of a recession.
5.A universal child care system is ideal, but experts disagree on what immediate child care solutions we should accept in our current policy climate.
Panelists, except Haspel, expressed their support of an “all-hands-on-deck” approach and generally welcomed the rise of employer-sponsored child care benefits. They claimed that a universal system is what we should strive for, but we are not close to achieving that reality and American families are in desperate need of practical solutions right now.
They believe we should encourage and celebrate businesses taking a proactive approach to help their employees access child care. “I hope the government does more, but I certainly do not hope that employers do less,” said Medoff.
Haspel disagrees with the so-called “both-and” approach in which it is possible to promote employer-sponsored child care and also make advancements toward a universal system. Employer-sponsored child care comes with serious political and opportunity costs. The more child care advocates and policy experts direct resources and attention to supporting job-linked child care, the more we shift our energy away from advocacy for a publicly funded system.
Every dollar dedicated to government incentives for employer-sponsored child care is a dollar not spent on subsidizing child care. The advancement of employer-sponsored child care does not bring us closer to creating a universal system that works for everyone. According to Haspel, it actually places us on an entirely different path that cements child care as a perk that should be acquired through employment.
Haspel does not believe employers should be completely “divorced” from child care. He acknowledges that businesses have a vested interest in supporting employees with caregiving responsibilities, and those who offer child care benefits generally do so with good intentions. Haspel, however, wants businesses to shift their energy away from individualized benefits tied to employment and focus on bringing us closer to a publicly funded system. He presented alternatives that still engage businesses but do not involve the creation of onsite child care centers or voucher programs, including directly supporting community-based programs and funding grants to help expand their reach and capacity.
Haspel also applauds businesses whose advocacy “goes beyond platitudes and leans into measures that raise dedicated tax dollars.” Haspel believes Vermont is an example of how businesses should be involved. In 2023, the Vermont business community was a vocal proponent and testified in favor of a corporate tax bill. Their lobbying helped to get the bill passed and ultimately expanded child care funding, created a more than $100 million annual funding stream and subsidized child care for thousands of families.
Haspel wants the early childhood education community to reflect and question the prominence of employer-sponsored child care before it metastasizes into something we didn’t intend for it to become.
These are difficult conversations, but conversations that we must keep having. He also emphasized that “this is one of those issues [in which] reasonable people can reasonably disagree.”
Our nation’s approach to health care is a “cautionary tale” about the consequences of relying on employer-sponsored benefits instead of investing in a public system. “Today’s stopgap measure can become tomorrow’s status quo,” Haspel warned.
Elise Anderson is a recent graduate from the Department of Urban Policy and Planning at Hunter College where she earned her M.S. in Urban Policy and Leadership. She is also the Communications Manager at Vote Mama, the leading source of research and analysis about the political participation of mothers. Anderson worked previously as a congressional press secretary and campaign manager, and has a passion for policy and supporting working families.
