Nebraska businesses can’t find enough workers to fill their open positions. One of the most common causes is familiar to states across the country; workers can’t find a place to keep their kids while they’re on the job. The lack of affordable child care options is costing families and the local economy hundreds of millions of dollars in wages and productivity.
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Child care shortages limit work options for families
First Five Nebraska shows that 91% of the state’s counties do not have enough licensed child care providers to meet demand. Many are at capacity, with some having long waitlists, and others having closed due to staffing or financial challenges.
Families in rural communities often have the fewest options and may have no licensed providers within driving distance. For parents, that can mean turning down shifts, relying on friends or relatives or leaving a job when care is not available.
Nebraska’s labor market adds pressure to the problem. The U.S. Chamber of Commerce reports that the state has only 70 available workers for every 100 open jobs. This worker shortage makes the lack of participation from parents with young children even more glaring.
Surveys show that 31% of Nebraska parents with children under age 5 have left the workforce because they could not find or afford child care, according to First Five.
Child care breakdowns carry a high economic cost
Researchers at the University of Nebraska-Lincoln’s Bureau of Business Research measured the economic cost of these disruptions in an earlier analysis. They found that working parents lose about $489 million in wages each year due to child care breakdowns.
Businesses lose an estimated $234 million from reduced productivity and turnover, and state income tax revenue misses out on about $21 million annually. When the ripple effects across industries are considered, the total impact exceeds $744 million and represents more than 3,300 jobs.
More recent findings show that the impact has grown sharply since before the COVID-19 pandemic in 2020. Updated data estimates direct and indirect losses of $1.74 billion in business output and $1.61 billion in employee salaries. State tax revenue drops by about $63.8 million, and the economy loses a net 6,843 jobs. Researchers have said that more parents are leaving or changing jobs due to childcare concerns than in earlier years.
A nationwide gap affects millions of families
Nebraska’s situation reflects a larger national pattern. A recent assessment by the Buffett Early Childhood Institute found that nearly 14.8 million children across the U.S. need child care, but the licensed supply covers only about 10.8 million. More than 4.1 million children do not have access to child care within a reasonable distance. The dearth of care results in a 28% national gap.
Research from the Buffett Institute and the Bipartisan Policy Center estimates that child care shortages could cost the U.S. economy between $216.4 billion and $329.4 billion over the next decade through lost productivity, fewer available workers and reduced income and revenue.
Communities test local solutions
Several Nebraska communities have taken steps to address the child care shortage locally. In some small counties, employers, families and nonprofits have come together to open new centers or support home-based providers. Local employers help fund a community-led child care center in Thayer County in southern Nebraska, and use state tax credits to support nearby providers.
In northeast Nebraska, a group of businesses and a local college formed a regional child care collaborative. Their goal is to pool resources, expand access and open a new center for families in Norfolk by 2026.
The report also highlights ideas from other Midwestern states. Michigan uses a cost-sharing model that splits child care expenses between families, employers and the state. Iowa invests in strengthening the child care workforce to increase capacity. Colorado offers grants to help employers build or expand on-site child care centers.
