Study: Lack of Affordable Child Care Costs S.C. Economy $1B Annually

By:Jessica Holdman/ S.C. Daily Gazette

Half of working South Carolina parents missed work at least once in three months for lack of child care.

One in 10 reported quitting their job or getting fired, according to a survey by the state Chamber of Commerce.

In March, the state chamber partnered with the U.S. Chamber of Commerce Foundation and the state Department of Social Services to poll 500 parents of children under the age of 6 across the Palmetto State. South Carolina is the 16th state in the nation to participate in one of these surveys.

The chamber conducted the study to highlight how much the price and availability of child care costs the state’s economy, as the business organization lobbies state legislators to come up with possible solutions.

The estimated fiscal impact is nearly $1 billion annually: Employers lose $818 million through turnover and absenteeism, and the state misses out on $179 million in tax revenue.

More than half of that (an estimated $501 million) is driven by lost productivity from employee absences, according to the report titled “Untapped Potential in South Carolina.”

“I had to quit my high-paying, full-time job due to continuous issues with my children’s child care,” a mother of a 1-year-old and 4-year-old wrote in her survey response.

“I left my job because I cannot afford child care,” wrote a mother of a newborn and 5-year-old. “It’s more affordable for me to stay home with no income than to work and pay for child care.”

‘Finding child care was brutal’

The survey, along with legislative efforts using tax credits to address child care in the state, come as South Carolina companies seek to fill the more than 72,000 open jobs in the state as of last month, according to data from the state’s workforce agency.

“Finding child care was brutal,” Leah McCraney, a paralegal and mother of two living in Columbia, told business leaders present at the survey rollout.

“I spent literal years — years plural — on wait lists,” she told the roughly 50 attendees. “I was forced to work part time as a result of that wait period.”

McCraney, who has a 3-year-old daughter, Sophia, and a 7-year-old son, Whit, said the family has spent as much as $21,000 in one year for child care.

“At one point, my wage was so low we couldn’t make it work,” McCraney said. “It was cheaper for me to stay home.”

And even when she was at work, she worried.

McCraney talked about having the livestream of her child care center’s infant room up on one screen while struggling to focus on a second screen for work.

Incentivizing child care

One way the chamber hopes to address the issue of child care is through an upgrade of a nearly 30-year-old tax break in the state.

The little-used incentive enacted during former Gov. David Beasley’s administration credits employers on their corporate income tax for operating on-site child care for workers or providing direct payments for private options.

In 2024, 18 employers claimed a total of nearly $51,000 in credits, according to the state Department of Revenue.

State chamber leadership has said the problem is twofold. Some companies don’t know the credit exists, and the offer needs updating.

The credits are capped at $100,000 in startup expenses or $3,000 per employee for continued operations or direct payments. And the credits can’t exceed 50% of a company’s income tax bill.

A bill pending in the state Senate would up those caps to $1 million and $12,000 per child of each employee.

Most South Carolina companies already pay little in corporate income tax, especially those that received tax breaks to move or expand. So, to make the tax break more attractive to companies, the bill would allow businesses to use it as a write off against state licensing fees and companies’ share of state income tax withholdings.

‘We’ve all gotten that call’

Jack McBride, CEO of commercial grade cleaning supply manufacturer Contec Inc. in Spartanburg, told his company’s story via video. For the past five years, he said, Contec has struggled to fill more than 40 job openings.

To try to draw in working parents, McBride said he’s considering offering employees a child care stipend as an employment benefit.

And Nicole Scott, a mother of three who works as a market executive at Bank of America, talked about the benefits the bank offers, including child care reimbursement and 16 weeks of paid maternity and paternity leave.

The bank also has a program that helps parents find and pay for backup child care when their usual provider falls through.

“We’ve all gotten that phone call that the nanny can’t come that day or the child care provider is closing their doors and you don’t have anywhere to take your child,” she said.

Finally, the pending legislation seeks to boost the number of people working in child care in the state by offering them a tax credit on their personal incomes — ranging from $1,500 annually for entry level positions to $3,000 annually for the most experienced workers.

“The child care issue is a critical one both for quality of life and from the economic development perspective,” said Sen. Tom Davis, the bill’s lead sponsor.

The bill has yet to have a hearing, the Beaufort Republican said, but he does not expect any pushback on the issue to keep it from advancing in the next legislative session.

“The private sector is recognizing these are critical pieces to getting a workforce,” he said. “It’s just a question of what, economically, will move the needle. This is just one aspect of it”

Altogether, state revenue officials estimate the legislation could reduce state tax revenues by $26.7 million in its first year — more than 75% of that coming from the credits for child care workers.

Other data

When it comes to South Carolina working parents, a quarter of survey respondents said they cut back on their working hours to care for their children. Other common strategies included parents taking their work home with them. Some took their children to work with them or worked from home so they could care for them.

Another parent, Rob Byers III, shared his story in a video played for attendees. He talked about how he and his wife went without child care for two years while on a waiting list. They coped by each working four hours a day, splitting time at a Columbia research firm.

They would “cram as much as humanly possible in a four-hour period,” he said. “It’s impossible. It is. You work for four hours straight, but there’s eight hours’ worth of work there every single day at minimum.”

The 7½-minute video, put together for DSS’ ABC Quality program, ends with the message “WORK DOESN’T WORK without quality child care.”

The majority of survey respondents said someone in their household stayed home with the children.

“It’s sad how much mothers, and especially single mothers, have to give up and sacrifice in their careers because they have children,” a mother of a 2-year-old wrote. “I’ve had to delay taking a job to figure out child care or turn down opportunities because of my child.”

High income households, where the family earned $100,000 or more per year, were more likely than mid- and lower-income families to send their children to pre-kindergarten and child care centers.

Those making less than $100,000 who did not have a stay-at-home parent were more likely to leave children with a friend or other family member.

Affordability, followed by personal choice, were the top factors in selecting child care. And proximity to work was a major factor in picking a child care location, the survey said.

The South Carolina Daily Gazette is a nonprofit news site providing nonpartisan reporting and thoughtful commentary. We strive to shine a light on state government and how political decisions affect people across the Palmetto State. We do that with coverage that’s free to both readers and other news outlets.