As Minnesota companies call employees back to the office, one question looms large: What about their kids? For parents, accessible, quality child care is essential to making a return to the office possible. For employers, child care is a pressing business issue that impacts recruitment and retention. 

Teachers’ wages had to increase to maintain a ready workforce, and basic operational costs have spiked. In Minnesota, the teacher-child ratio remains low, which adds costs, even though it’s the most important factor in ensuring safety and quality. Operating a child care business is only possible with high occupancy levels. Yet even at optimal capacity, the average provider’s profit margin in Minnesota is razor thin. 

Our state ranks third highest in the United States for infant care costs, now around $1,900 per month per baby. That’s more than most parents pay for their mortgage. By the time their child reaches kindergarten, a family in Hennepin County has spent more than $98,000 for child care. 

Child care is expensive because it is labor intensive. There is no new tech-enabled way to replace the presence of a skilled, caring early childhood educator.

Solving the child care conundrum will require a resurgence of the business leadership Minnesota benefitted from in earlier decades. The Minnesota Early Learning Foundation was established in 2005 by business and civic leaders.

Art Rolnick, former research director at the Federal Reserve Bank of Minneapolis, was an instrumental leader in the effort to make substantial commitments to early learning. So were former Ecolab CEO Doug Baker, the Minnesota Business Partnership, and others who championed investments in child care, citing a return on investment (ROI) of $17 for every $1 invested. We need business leaders to step up again. Here’s what you can do:   

1. Understand the new expanded $16 billion federal tax credits: 

• Increased cap on Dependent Care Flexible Spending Accounts from $5,000 to $7,500
• Expanded tax credit for working parents (the Child and Dependent Care Tax Credit), from $1,200 to $2,100 for a dual- and middle-income family with two children
• Triple the employer-sponsored care tax credit for businesses
• Expanded Child Tax Credit, the maximum refundable portion increases from $1,600 to $1,800 per child

These credits, while modest, are the most significant middle-class child care affordability measures in decades. To ensure the credits are used, employers and employees should talk with their advisors about how they apply at scale and in individual circumstances. 

2. Add child care at your worksite.

New Horizon Academy has partnered with many companies to build and operate on-site programs—at Best Buy, Land O’Lakes, and others. While these programs are on the rise at large U.S. employers, they’ve stalled in Minnesota. Yet neighbors Andrew Butler, executive chairman at insurance company Cottingham & Butler in Iowa, and Dan Rohrbach, CEO at health care provider Southwest Health in Wisconsin, have just announced their on-site child care facilities, which average in cost from $1.45 million to $1.62 million for an 8,500-square-foot space that accommodates 100 kids, when attached to an existing building.

Read more from this issue

Open Letter: Is It 1929 Yet?

Twin Cities Business Person of the Year: Rob Vischer

Editor's Note: Meet the New Boss...

Leading in the Human + Machine Future

3. Find nearby providers whose hours align with your work shifts or will flex their availability.

Know about child care quality measures and rankings so you can assess their quality. Ask about discounted and reserved slots for your employees and consider providing subsidies to further lower costs. Small businesses can band together for negotiating leverage. Arrange for back-up care when employees’ everyday arrangements fall through. 

A call to Minnesota business leaders

Minnesota long has prided itself on leading in education and employment, as evidenced by such innovations as the Early Learning Scholarship—the first in the country. But other states are now moving more aggressively to support their working families. Iowa offers free care for kids of child care teachers, Colorado’s new universal pre-K program covers part of the cost for every family there, and New Mexico provides publicly funded child care.

If Minnesota wants to compete for and grow talent, we must do something new about child care.

As employees return to work sites, let’s address their new reality. Child care is just not their problem. It’s our challenge, too—one we can solve together. The bottom line for businesses: When young families succeed, so do we.