Great Lakes Wire

Childcare costs are putting significant pressure on families in the United States, and recent data indicates that these affordability issues are having a direct impact on the national labor force. The Care Board, an initiative from the University of Kansas Institute for Policy & Social Research, reports that mothers have experienced a 2.8 percentage point drop in labor force participation between January and June, marking the steepest decline in over four decades. In contrast, fathers’ participation remains above 95%, highlighting a gendered effect.

Mothers with children under five are particularly affected, being the most likely among working-age adults to cite childcare barriers as their main reason for leaving the workforce, reducing hours, or missing workdays.

A separate study by Care.com, titled the 2025 Cost of Care Report, shows that families now spend an average of 22% of their household income on childcare. This figure is more than three times higher than the U.S. Department of Health and Human Services’ recommended affordability benchmark of 7%. As a result, nearly nine out of ten parents report making significant changes to their work or lifestyle to manage these expenses. About one in four have taken additional jobs and 7%—mostly mothers—have left the workforce entirely. Parents also use about 29% of their savings to pay for care costs.

Geographic differences do not ease this burden. According to research from the Economic Policy Institute, there is no state where infant care is affordable for median-income families. Even in South Dakota—the least expensive state—childcare takes up 9.4% of family income, still above federal guidelines. In New Mexico it rises to 21%, and in most states and Washington D.C., annual infant care costs now surpass in-state college tuition.

This situation creates what some call an affordability–participation paradox: families cannot afford to work without childcare but also cannot afford childcare unless they work. This cycle restricts labor force participation overall, limits economic growth, and widens gender gaps in earnings and career advancement.

Employers are feeling these effects as well through increased absenteeism, reduced productivity, and higher turnover rates—especially among women at prime earning ages. Ensuring access to affordable childcare has become a strategic concern for businesses seeking to retain talent and maintain operational efficiency.

"Ensuring access to affordable care is therefore not just a social concern, it is a strategic workforce imperative, directly influencing talent retention, operational efficiency, and the long-term resilience of the organization’s labor force," wrote Kevin Marrs from ASE.

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