First 5 Orange County releases second phase of child care report: “Child Care and its Impact on Orange County’s Economy”

SANTA ANA, Calif. (June 1, 2021) – Child care-related challenges exact a significant toll on Orange County companies and the overall economy, along with a staggering personal and financial toll on families with young children, who far too often must choose between continuing to work or abandoning their careers to care for their children, according to a newly released report that underscores the urgency of a targeted, ongoing community-wide focus on solving the crisis.

Conducted by First 5 Orange County, the report found that more than 67,000 jobs, in Orange County alone, are lost annually due to unrelenting disruptions and gaps in child care, resulting in a $4.3 billion hit to the county’s economy in lost productivity and wages. Meanwhile, the county loses out on another $372 million annually in tax revenues that are lost due to the crisis, according to the report, “Child Care and its Impact on Orange County’s Economy.”

“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,” said Kimberly Goll, president and chief executive officer of First 5 Orange County. “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.”

The new report reflects the input of in-depth interviews and surveys with more than 50 Orange County employers representing more than 71,000 employees. While COVID-19 has exacerbated the problem, this crisis was present prior to 2020 and will persist without immediate and long-term action.

Today’s newly released report follows First 5 Orange County’s initial report, released last October, that revealed a harsh personal and financial landscape for many families throughout the county. That report found that tens of thousands of families can ill afford the high costs of quality child care – when, indeed, they can find it. Many families are forced to make difficult life choices: Should they keep working but dedicate virtually their entire paychecks for child care? Or should they sacrifice their jobs and careers and stay at home, often putting their families in financial jeopardy?

First 5 Orange County will use the findings in the two reports to bring together a coalition of champions representing the business community, non-profits, child care providers and local, county and state officials. They will work together to help formulate recommendations and a plan of action.

The economic impact analyses in this report were calculated using an input-output modeling system, based on an initial model created by the Bureau of Economic Analysis. While other reports on child care may measure one job lost as one job lost or a reduction in earnings taken at face value, this report measures the profound “ripple effect” or additional impacts that one job lost or a reduction in earnings has throughout the region’s economy. Dr.Wallace Walrod, CEO, TCCG Tech Coast Consulting Group LLC, who conducted this part of the study, said this approach provides a more complete understanding of the overarching impacts associated with child care and child care-related challenges.

“These reports by First 5 Orange County make a compelling case: this county’s child care crisis is serious and we must address it now. And when I say ‘we,’ I mean everyone – employers, elected officials, community leaders, schools, children, family advocates, and families themselves,” said Lucy Dunn, president and CEO of Orange County Business Council. “We ignore the crisis’ economic and personal devastation at the county’s peril.”

The report noted that the child care crisis hits families especially hard in Orange County due to the high cost of living here. According to the report, the crisis disrupts working parents/guardians in a number of ways, including the following:

  • One in five parents routinely arrives late to work due to gaps in child care
  • One in six is forced to leave work early on a regular basis
  • One in 10 either chooses to resign or loses their job due to child care challenges
  • One in 11 is forced to reduce their hours or is unable to assume a full-time position.

Goll noted that these are conservative estimates for working parents with children under the age of 6.

Women and women of color have been particularly hit hard. As of January 2021, 28 percent of Latina women and 24 percent of Black women are involuntarily working part-time, compared with 17 percent of all women.

The report contains quotes from numerous parents and employers about how the child care crisis is affecting them.

A mother named Cecilia told the researchers: “I am a single mother of three and work from about 9 to 6 Tuesday through Saturday. My children’s daycare is only open Monday through Friday so my mom has to watch them on Saturdays. I have to leave early a lot because my kids cannot stay past 6. If I could find child care with more flexible hours, I would look for a better position.”

Said another mom: “Most of my income pays for child care. It doesn’t make much sense, but I am working so that when they are older and don’t need child care, I have a job.”

An official at Cal State Fullerton told researchers: “If we could double, triple, quadruple child care capacity, demand is that much greater than supply. The need is great for both students and faculty and staff.”

“Child Care and its Impact on Orange County’s Economy” contains additional data-rich information about the child care landscape in Orange County. You can view the presentation by visiting www.occhildrenandfamilies.com/childcare.

About First 5 Orange County Children and Families Commission
The First 5 Orange County Children and Families Commission oversees the allocation of funds from Proposition 10, which added a 50-cent tax on tobacco products sold in California. In fiscal year 2018/19, the Commission allocated more than $25 million to fund programs for young children. Children ages 0-5 received 2.8 million services. Funds help pay for early education, pediatric primary and specialty health care, children’s dental, homeless prevention, and child development programs for children from the prenatal stage to age 5 and their families. The Commission’s vision is that all young children reach their full potential. For more information, please visit www.occhildrenandfamilies.com.