No Maternity Leave but More Companies Raising Children in the U.S. [K Population Strategy]

Increase in Companies Adopting Childcare Welfare
Considering Working Moms and Dads' Needs Amid Pandemic and Labor Shortage
Company-Centered Changes... Productivity Up, Turnover Rate Down Expected

Among the OECD member countries, the United States is the only country without guaranteed paid parental leave, yet the number of companies providing childcare facilities such as daycare centers as a welfare benefit is increasing. Since the COVID-19 pandemic, as more working moms and dads have sought childcare facilities, the U.S. industry, which has long suffered from chronic labor shortages, is rushing to establish work-family balance environments to secure workforce.

According to the Wall Street Journal (WSJ), CNN, and others on the 13th, a survey conducted by the Society for Human Resource Management (SHRM) targeting over 4,200 companies in the U.S. showed that the proportion of companies providing childcare facilities increased from 26% in 2019 to 32% in 2023. The number of companies offering on-site childcare services in Washington DC increased by 47% between 2020 and 2023.

Global logistics company UPS provided childcare services to about 300 employees at its facility in La Stop, California during the COVID-19 outbreak. The service was later expanded to Ohio and Pennsylvania, and currently about 410,000 people can access this service. The company evaluated that employee absenteeism decreased and turnover rates dropped after introducing the service.

U.S. coffee company Red Rooster Coffee also contracts with childcare providers to offer related welfare benefits. This welfare program was created in 2018 after founder Hayden Polseno Hensley discussed it with his co-founder wife. As the number of employees who were pregnant or had pregnant spouses increased, the need for on-site childcare facilities grew, prompting immediate implementation. The company actively uses this system, viewing childcare provision as a solution to the high turnover problem in the coffee industry workforce.

Hotel chain Marriott operates a daycare center at its Bethesda headquarters, offering employees discounted childcare costs. Office design company One Workplace, headquartered in California, partnered with childcare service provider Upwards in January last year to subsidize some childcare facility usage costs. Big tech companies like Amazon and Google are in similar situations.

Stephen Kramer, CEO of Bright Horizons, a U.S. childcare service provider, recently told CNN in an interview, "During the pandemic, corporate clients' interest in childcare services increased significantly," adding, "We have confirmed that this interest has continued even after the COVID-19 crisis." He added, "More employers are showing interest in providing on-site childcare services to make it easier for working parents to come to the workplace."

Brad Wilson, CEO of Care.com, a childcare and caregiving staffing company, also explained, "Companies are focusing on these aspects (providing childcare services) from the perspective of productivity and employee retention." He added, "One in five U.S. workers quit due to lack of employer-provided childcare and caregiving benefits, and the same proportion is willing to move to companies with better support."

During the COVID-19 pandemic, the U.S. federal government supported childcare costs for working moms and dads working from home. However, when the government stopped this support in the second half of last year, the number of working parents suddenly unable to find childcare increased. This led to a wave of resignations to handle childcare and housework. As the labor shortage worsened, private companies felt the need to directly solve childcare issues so that talent could return to the workplace.

The WSJ reported, "Many advanced countries provide childcare subsidies, but the U.S. leaves much of this responsibility to employers, and this trend is gradually expanding." According to the OECD, as of 2019, the national childcare cost per infant in the U.S. was $900 (about 1.22 million KRW), which is less than 6% of Sweden's $16,100, the highest among OECD countries. The U.S. is also the only OECD country without legally mandated paid parental leave.

The Joe Biden administration has required companies receiving federal semiconductor subsidies to develop plans for providing childcare facilities to employees. Since it is difficult for the government to directly establish childcare facilities, this measure was taken to ensure companies fulfill their responsibilities.

Although private companies are directly building childcare environments, it is regrettable that this trend is not overwhelming in the U.S. According to the U.S. Department of Labor, the proportion of U.S. workers eligible for childcare benefits was 12% last year, a slight increase from 10% ten years ago. Meanwhile, average household spending on childcare has increased by 30% since 2019, making the burden on families with children increasingly heavier.

The bipartisan nonprofit organization Committee for a Strong America estimated the economic loss due to infant childcare in the U.S. at $122 billion annually. This is double the $57 billion annual cost found in a similar 2018 study. The organization assessed that "the situation has worsened due to COVID-19 and insufficient policy efforts."