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The Economic Case for Supporting Caregivers

Posted on January 3, 2023

By Vasundhra Sangar

No one could have predicted the difficulties of establishing a “new normal” in the workplace after COVID-19’s economic shutdowns. It has now been almost three full years since those shutdowns forced people out of the traditional office, prioritized remote work and forever integrated professional and home lives.

As AIM continues its theme of advancing the commonwealth’s attractiveness and competitiveness, it is fitting to turn back to one of the pandemic’s most immediate economic impacts – the mass exodus from the workforce of caregivers whose roles have traditionally been filled by women and women of color. By October 2020, the female workforce in the country had dropped down to levels from the 1980s, meaning that COVID withered an entire generation of progress for women in a matter of months.

The issue became an immediate crisis early in the pandemic because of remote schooling and increased demands for child care. But COVID ultimately affected all levels and types of caregiving, including employees caring for elderly relatives. Millions of American workers with the responsibility to care for children or elders ended up leaving their jobs, underscoring the fragile infrastructure supporting caregivers that continues to keep many of them off the job even today.

In a nationwide survey conducted by, The Future of Benefits 2022, 48% of respondents cited the desire for better child-care or senior-care benefits as the primary reason for leaving a job, and 47% reported they left because they were struggling with child-care or senior-care challenges. The US Census Bureau’s Summer 2022 household survey indicated that over 1.6 million Americans supervised one or more children while simultaneously working, and another 1.3 million reported leaving their jobs to care for children. Brookings Institute data reflects parents with minor children make up nearly one third of the entire workforce.

The pressures on caregivers are among the reasons that participation in the Massachusetts economy has continued a decades-long decline. The labor-force participation rate throughout the commonwealth has declined from 70 percent at the end of 1989 to 65.5 percent in October 2022, a drop that has exacerbated the long-term, structural shortage of employees now faced by Massachusetts companies.

The Massachusetts Business Coalition for Early Childhood Education, of which AIM is a member, surveyed member companies in the final quarter of 2022 and found 97% of responding coalition members had employees who had raised child care as a significant concern over the past few months. Seventy-six percent reported an increase of employees leaving their jobs and 43% said most of the employees they lost were women.

These losses have measurable financial impact. Independent research by the Massachusetts Taxpayers Foundation reflected an $800 million – $1 billion loss for businesses covering costs of turnover and replacement training; $175 – $200 million in foregone income and sales tax revenue for the state due to lower wages; and a $1.6 -$1.8 billion cost to families in missing work, lost wages. and reduced working hours.

The lessons of COVID-19 can and should become a mutually beneficial catalyst for change with respect to caregivers. The staggering numbers present a unique opportunity to make child care, senior care and care-giving structures a competitive advantage for the commonwealth.

In March 2021, in honor of Women’s History Month, AIM launched its Pink Slip initiative with an op-ed in the Boston Globe highlighting steps that companies can take to offer flexibility and incentives to employees with caregiving responsibilities. Suggestions included on-site child care or care vouchers, flex-schedules so employees can work within their caregiving demands, and pay increases to caregivers requiring such flexibility on par with colleagues who can continue to work full time.

But the responsibility to provide such structures cannot be shouldered by business alone. Massachusetts legislators discussed the increased need for early childhood education and care at length last session in light of the pandemic’s lasting effects. The Senate advanced an early education bill to serve as a framework for improvement, and the House has publicly indicated caregiving needs as a priority for the upcoming 2023 legislative session.

Although the Senate bill did not become law, it did contain language establishing an employer commission on the topic of early education and care, indicating that the business community would have a seat at the table as these challenges are navigated by the state. AIM believes it is imperative for members to remain engaged in these conversations and take advantage of opportunities to connect with state leaders in order to avoid prescriptive, one-size-fits-all mandates on business.

The realities employers and employees face must be factored into the decisions lawmakers have committed to making in the upcoming year. There are existing limitations in the state’s funding mechanisms, child care-voucher systems, and the way child-care providers themselves are reimbursed and made stable that must also be addressed through sound policy changes.

The pandemic forever altered the workplace, the workforce, and the nature of work. However, continuing to “expand the pie” and ensure as many Massachusetts residents as possible can access economic opportunity and prosperity remains the right path for our economy and our communities. Realizing life and work are more closely integrated than originally imagined and continuing to break down barriers to the workplace – including with respect to personal caregiving responsibilities – will take us more securely into the new year and our collective new normal.