As Michigan faces persistent workforce challenges, a new state report points to an often overlooked economic lever: Childcare. Expanding access to affordable, high-quality early care and education could support working parents, strengthen the state’s labor market, and promote gender equity, according to the Michigan Department of Labor and Economic Opportunity (LEO).

The Michigan child care Industry Workforce Analysis, released earlier this year, highlights both the importance of child care to Michigan’s economy and the fragile state of the industry. Child care programs across the state struggle with staffing shortages, low wages, and uneven geographic availability, factors that limit the supply of child care and create barriers for working families.

“Child care is not just a family issue,  it is fundamentally an economic issue,” says Trisha Schlegel, economic analyst at LEO and author of the report. “When parents cannot find or afford child care, they may reduce their work hours, turn down promotions, or leave the workforce entirely.”

That economic impact is significant. According to Emily Laidlaw, deputy director of Early Education at the Michigan Department of Lifelong Education, Advancement, and Potential (MiLEAP), the lack of access to affordable, quality child care costs Michigan an estimated $3 billion annually. 

“But when families can access care, families can work, businesses can grow, and kids can thrive,” she says.

A strained workforce

The report shows that Michigan’s child care industry employs roughly 23,000 workers, representing about 0.5% of the state’s total workforce. Nearly 70% of those workers are employed in the private sector, with the remainder in government roles such as Head Start and Great Start Readiness Program (GSRP) classrooms.

Yet turnover and retention remain major concerns. The workforce skews young: 26% of child care workers are between 19 and 24 years old, while only 16% fall between 25 and 34, suggesting many leave the field as they age.

Evan Linskey“This trend suggests a lack of retention as workers move through their careers,” says Evan Linskey, research manager at the Michigan Center for Data and Analytics. “This could be due to the difficult nature of the work or limited opportunities for growth.”

Low wages are one likely factor. The median hourly wage for Michigan child care workers is just $13.91, far below the state median of $23.04 for all occupations. Among child care occupations, self-employed home-based providers earn particularly low wages, a median of $11.08 per hour.

Laidlaw says MiLEAP is investing in talent retention through programs like the TEACH Early Childhood Scholarship and registered apprenticeships. 

“We’ve supported over 960 scholarship recipients this year so far,” she says. “And we launched a targeted wage pilot program to address one of the top challenges in the field, which is compensation.” 

The pilot found that higher wages led to greater workforce stability and improved care quality.

To further support providers, MiLEAP also is exploring partnerships with the Small Business Association of Michigan to connect early childhood educators with employee benefits like health insurance and retirement, which Laidlaw described as “essential for recruitment, retention, and professionalization of the field.”

Julia Cwiek, Duncan Aviation airframe team leader.
Geographic and demographic disparities

Access to child care is not consistent across Michigan. While LEO’s data does not capture county-level shortages, anecdotal evidence points to regional disparities.

“We hear about unique challenges across the state, especially in rural areas,” Linskey says. 

A recent report from northwest Michigan partners outlines barriers such as transportation difficulties, facility limitations, and a shortage of qualified providers.

Statewide, demand for child care remains high. According to LEO’s analysis, Michigan has about 635,000 children under age 12 with all parents in the labor force — creating strong demand for care. However, licensed child care capacity only serves an estimated 250,000 children — far below potential need.

The shortage of child care slots has broader implications for labor force participation, particularly for women. LEO’s Women in the Michigan Workforce 2024 Report highlights that lack of affordable child care is one of the top barriers to employment for women with young children.

About 21.4% of Michigan women aged 25 to 54 are outside the labor force, a participation gap that grows larger among women of color and those with lower incomes. Child care access is one factor driving this disparity.

Kristen Fannon, mom and Duncan Aviation wellness coordinator.
When employees struggle with child care, businesses feel it

Across Michigan, employers feel the financial strain of inadequate child care access. According to a 2023 report from the U.S. Chamber of Commerce Foundation, child care disruptions cost the state’s economy an estimated $2.88 billion annually — with more than $2.3 billion tied directly to employer losses from absenteeism, turnover, and reduced productivity.

At Duncan Aviation’s Battle Creek facility, leadership began to explore child care partnerships after internal data showed clear impacts on their workforce. According to a company survey, 60% of Duncan Aviation employees reported missing work at least once a month due to child care challenges, a number that rose to 65% among employees with children under five.

“The lack of reliable, high-quality child care in our local area prevents many would‑be job seekers from entering or re‑entering the workforce after they have started a family,” said Andy Richards, Duncan Aviation executive vice president and COO, during testimony before Michigan lawmakers.

Bronson Healthcare, one of the state’s largest health systems, also is investing in child care solutions to stabilize its workforce.

Chelsea McMullin“At Bronson, we recognize that access to reliable, affordable child care is not just a benefit, it’s a necessity,” says Chelsea McMullin, senior manager of benefits. “With nearly 80% of our workforce made up of women, many of whom are working parents, we understand that child care challenges can be a major barrier to employment and retention. When our employees know their children are safe and well cared for, they can focus more fully on their work, leading to higher engagement, reduced absenteeism, and a better experience for the patients and communities we serve.”

Bronson has been an early participant in Michigan’s Tri-Share Child Care Program, which splits child care costs equally among the state, the employer, and the employee. 

“In 2024 alone, more than 100 Bronson employees benefited from the program,” McMullin says. “In addition to Tri-Share, we offer a dependent care flexible spending account with employer matching, a lifestyle spending account for family-related expenses, backup child care through the Kalamazoo YWCA, and paid parental leave.”
Stephanie Alexander, mom and Duncan Aviation airframe assistant manager.

Next steps for Michigan’s child care future

LEO’s report recommends public policy solutions such as raising wages for child care workers, expanding training and career pathways, and incentivizing employer partnerships to improve access.

Laidlaw emphasizes MiLEAP’s role in advancing these efforts. 

“We’re expanding innovative programs like Tri-Share,” she says “And we’re leading Governor Whitmer’s Pre-K for All initiative, which is already saving families hundreds of millions of dollars.”

She also pointed to the launch of regional child care coalitions, which bring together employers, educators, workforce agencies, and families to design local solutions. 

“One of the most exciting outcomes was the creation of a nonprofit, Childcare Back Office,” Laidlaw says. “It helps providers handle administrative tasks so they can focus on quality care.”

Looking forward, McMullin says Bronson hopes policymakers will continue prioritizing sustainable solutions. 

“We consistently hear from employees, especially working moms, that the stress of managing child care can be overwhelming. Our communities need greater access to affordable, reliable child care, period,” she says. “Supporting child care means supporting a stable health care workforce and healthier families.”

Laidlaw agrees.

“We want to continue investing in local leadership through our regional coalitions and knit all these programs together — Tri-Share, Pre-K for All, wage pilots — to create an early care system that’s accessible, affordable, and meets families’ needs.”

Dr. Brianna Nargiso, a graduate of Howard University and Mercer University, specializes in media, journalism, and public health. Her work has appeared in The Root, 101 Magazine, and Howard University News Service, covering profiles, politics, and breaking news. A Hearst journalism award nominee and active member of the National Association for Black Journalists, she has also worked with Teach for America and the Peace Corps. A doctoral graduate of American University, Brianna is dedicated to advancing social justice, public health and education on a global scale.

Photos by John Grap.

Early Education Matters shares how Michigan parents, child care providers, and early childhood educators are working together to create more early education opportunities for all little Michiganders. It is made possible with funding from the W.K. Kellogg Foundation.