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A new report, released on Tuesday by the U.S. Chamber of Commerce Foundation in collaboration with the Grand Rapids Chamber, Michigan Chamber, and the Early Childhood Investment Corporation, highlights the staggering economic impact of Michigan’s childcare crisis, which reaches nearly $3 billion annually. This report sheds light on the urgent need for comprehensive solutions to address this challenge, and it underscores the significant consequences it has on the state’s economy.

In response to this critical issue, the Lansing Regional Chamber has taken an active role as part of the statewide childcare coalition dedicated to exploring effective solutions. Regionally, the Chamber is supporting the initiatives of Capital Area Michigan Works!, the United Way of Southeast Michigan, and LEAP, who were awarded the Regional Child Care Coalition Planning grant from the Early Childhood Investment Corporation. This grant aims to strategically strengthen the regional childcare system, further emphasizing the need for collaborative efforts.

The economic toll can be categorized into two main areas: direct labor costs and direct tax revenue losses. Annually, employee turnover costs employers a staggering $1.04 billion, while employee absences result in an additional cost of $1.26 billion for employers. The high rate of employee turnover further contributes to a loss of $460 million in state tax revenue. Moreover, due to employee absenteeism, the state sustains an annual loss of $116 million, culminating in a total economic loss of $2.88 billion, as outlined in the report.

The data presented in this report underscores the pressing need for concerted efforts and innovative solutions to address Michigan’s childcare challenge comprehensively. For additional information on childcare, please contact LRCC talent development manager Sarah Bakken at sbakken@lansingchamber.org.