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Opinion | Let’s keep Alabama working: Childcare and workforce development

This tax credit will lead to increased access to childcare, enabling a more robust workforce and stimulating the economy.

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The business community is united in its belief that expanding access to quality affordable childcare is essential to alleviating some of the burden caused by the skilled labor shortage we experience today. Currently, parents in Alabama make up 35 percent of the workforce. We know that when parents have access to high-quality, affordable childcare, employers benefit from reduced absenteeism and productivity loss, increased employee retention, and a greater abundance of skilled workers. 

In 2022, nearly 85,000 hardworking Alabama families needed access to childcare but had no quality, affordable options in the communities where they live. That number may continue to grow as Alabama’s job growth outpaces the increase in available childcare slots. The average weekly cost for infant/toddler childcare in Alabama was $139 as of 2021, which translates to approximately $556 a month, or $6,672 a year. That’s 12 percent of the annual income for a household with children earning the median income ($55,000). State-level policy can incentivize the expansion of childcare to support Alabama’s growing economy and get Alabamians back to work.

A critical piece of legislation, sponsored by Representative Anthony Daniels and Senator Garlan Gudger, will establish the Alabama Childcare Tax Credit offering tax incentives to employers and childcare providers that seek to expand childcare access and increase quality in care for working families. 

The legislation provides a tax credit to employers of any size who provide childcare benefits to employees. This will allow Alabama families to keep more of their hard-earned money.

Incentivizing employers to offer childcare benefits will undoubtedly lead to increased access to childcare, enabling greater parental workforce participation and raising parents’ income. There are 210,000 working age parents that aren’t working, and 80,000 of them have young children that require childcare. It is estimated that by improving access to childcare and closing the supply gap of the more than 85,000 children that need it, we could increase Alabama’s labor force participation rate by 3% – representing an additional 66,000 Alabamians in the workforce and stimulating our economy.

Toyota believes childcare is an essential resource for Alabama’s working parents – specifically mothers who are entering or reentering the workforce.  This tax credit will lead to increased access to childcare, enabling a more robust workforce and stimulating the economy.  It benefits the entire childcare ecosystem while addressing the current challenges of affordability, quality and accessibility.  By supporting this bill, we will help grow Alabama’s vibrant economy and get Alabamians back to work.

Join us in supporting the Alabama Childcare Tax Credits legislation to help Alabama parents contribute to our state’s much-needed workforce.

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Jason Puckett is president of Toyota Alabama.

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