Childcare Breakdown: The Scarcity of Childcare in Wisconsin is Fueling Workforce Shortage and Economic Challenges

Wisconsin Economic Development Institute Releases Report on Childcare and its Impact on Workforce and the Economy

A new report from the Wisconsin Economic Development Institute, Childcare in Wisconsin and its Impact on Workforce and the Economy, shows the scarcity and high cost of quality childcare in Wisconsin is making it increasingly difficult for parents trying to enter, re-enter, or remain in the workforce. The report also clearly illustrates that the state’s childcare access crisis is a top concern for the business community. In fact, 80% of Wisconsin employers believe the economy is impacted by the availability of affordable, high-quality childcare. In addition, 73% of businesses believe that without greater access to childcare, Wisconsin employers will face workforce shortages now and in the future.

The detailed report, commissioned by WEDI, was prepared by Baker Tilly who gathered and subsequently analyzed all relevant recent research and surveys on childcare and its impact on the workforce and economy of Wisconsin. Both statewide and locally gathered data were utilized. Alongside data collection, informational interviews of important stakeholders were conducted. Data for the report was collected between October 2022 and February 2023.

“Employers across Wisconsin are facing unprecedented hiring challenges, as many workers are choosing to remain out of the workforce, and the WEDI report clearly illustrates one key factor is the lack of employee access to childcare,” said Mary Perry, WEDI Board member and President and CEO of the Wisconsin Economic Development Association (WEDA). “While childcare remains an important family issue, it is also a critical business issue. It plays a major role in employment decisions made by families, and as a result has a significant impact on employers and business productivity.”

The report, which highlights Wisconsin’s childcare challenges and speaks to the need for program and policy solutions, reveals that the childcare crisis is affecting the ability of businesses to recruit and retain employees. For example, 58% of Wisconsin employers said that decreased access to quality childcare resulted in difficulty hiring new employees, workers reducing their hours, and employees using more paid and unpaid leave.

Report Highlights:

  • Approximately 4 out of 5 Wisconsin employers say the state economy is impacted by a parent’s access to affordable, high-quality childcare.
  • Two-thirds of employers say childcare is a way to retain valuable employees.
  • The long-term economic impact of Wisconsin’s childcare crisis is estimated at $4.2 to $6.4 billion.
  • A typical family with an infant and a 4-year-old spends 1/3 of their annual income on childcare.
  • In 2022, in the 10-county West Central Wisconsin area, 90% of centers had a wait list with a total of 4,304 children on the wait list.
  • In rural Northern Wisconsin, the 14-county area has gone from 283 regulated childcare programs in 2016 to 184 in 2022 – a 34% reduction in just six years.
  • 80% of residents in rural Wisconsin live in childcare deserts.
  • There are more than three children under age 5 for every ONE licensed childcare slot.
  • 75% of Wisconsin employers say the state economy is impacted by a parent’s ability to find affordable, high-quality childcare.
  • 21.6% of employers in Chippewa and Eau Claire Counties report they have had employees leave their job due to a lack of childcare.
  • In a survey of Rock County businesses, nearly 50% of respondents rated the importance of childcare as Important-to-Very Important for their employee recruitment and retention efforts.

The Wisconsin Economic Development Institute, Inc. (WEDI) is a non-profit, non-partisan foundation established under the Wisconsin Economic Development Association (WEDA) to conduct research and education designed to increase the effectiveness of economic development efforts. WEDI aims to:

  • Provide policymakers, organizations, and the public with critical information to help address and improve economic conditions.
  • Provide policy research material, industry publications, and educational services, training, and programming to promote economic development.
  • Identify and offer ideas and resources to address gaps in economic growth and prosperity.
  • Offer stakeholders and the public a clearinghouse of economic development information.