Childcare costs challenge families, employers and the state
Trending
LANSING - The cost and availability of childcare can affect whether parents in Michigan can go to work, which in turn creates problems for families, childcare providers and the small businesses that rely on them.
A study by researchers at Michigan State University found that families living farther from licensed providers are less likely to participate in the workforce. The study calculated that disruptions related to childcare cost Michigan's economy $2.88 billion each year from losses to employers and reduced state tax revenue.
Childcare can also take up a large part of a family's income.
According to the 2025 Kids Count in Michigan Data Book, infant care costs an average of $10,023 annually per child. The U.S. Department of Health and Human Services defines affordable care as costing no more than 7% of a family's income, but the report found that only one in four families met that standard for infant care.
Kelli Saunders, the vice president of policy and engagement at the Small Business Association of Michigan, said that childcare has increasingly become a workforce problem.
"When employees can't find care that is available, reliable and affordable, it can affect their ability to enter the workforce or stay in a position long-term," Saunders said.
Owners often face the same childcare challenges as their employees while trying to keep their small businesses staffed and operating, Saunders said. Financial pressures also affect providers responsible for the expenses of running a childcare program and maintaining affordability for families.
Christina Wichert, the interim executive director of the Educational Child Care Center in Lansing, said that her highest expense is staffing, followed by things like food, classroom supplies, utilities and building maintenance.
The center strives to pay competitive wages, but in some instances teachers find a second job, such as at a restaurant or grocery store or with a delivery service, to meet their own financial needs, Wichert said.
"It's a constant balancing act," Wichert said. "We're working within a very tight budget while trying to be mindful of the economic realities facing both our staff and the families we serve."
Saunders said small businesses may have fewer resources than larger companies to offer childcare benefits.
"Simply asking that business owner to absorb another significant cost doesn't necessarily address the underlying problem," Saunders said.
Providers can struggle to expand even when more families need care. Wichert said the Educational Child Care Center may have families waiting for care and have classroom space available but lack the staffing or financial resources to open another classroom.
Wichert said increasing tuition can compromise affordability of care, but also help pay expenses.
"We regularly see families wrestling with the question of whether it makes more financial sense for one caregiver to leave the workforce rather than continue paying for childcare," Wichert said.
She said parents could cut back on their working hours, decline promotions, change jobs to fit in their childcare schedules or even quit the workforce altogether. Such decisions can also have an impact on employers who are attempting to recruit and keep workers.
The state offers several programs to reduce childcare costs, including the Child Development and Care Scholarship, which helps eligible families pay for care, and PreK for All, which provides free preschool to 4-year-olds.
The Department of Lifelong Education, Advancement and Potential reported that the Child Development and Care Scholarship was providing support to 47,548 children from 28,857 families via 6,325 providers in the state as of March 2026.
In October 2026, the department reported that over 66,500 4-year-olds were taking part in the PreK for All program, saving families about $14,000 each year.
Its MI Tri-Share program divides eligible childcare costs equally among employees, employers and the state.
In October 2026, the Michigan Department of Lifelong Education, Advancement, and Potential reported that MI Tri-Share had helped families save more than $17 million in child care costs since its launch in 2021. The program splits eligible child care costs equally among employees, employers and the state, reducing participating families' share by two-thirds.
Saunders said the MI Tri-Share program provides small businesses with another way of supporting their employees without asking employers to pay the whole cost of care.
"Tri-Share is the kind of approach we think is worth continuing to develop and invest in because responsibility isn't placed entirely on the employee, the employer or the state," Saunders said.
Wichert said her Educational Child Care Center participates in MI Tri-Share to help make care cheaper for its own employees who have children attending the center.
"Accessible, affordable childcare is part of the infrastructure that allows our communities and economy to function," Wichert said.
Saunders said no one program can address all of Michigan's childcare issues and the state should help existing providers stay financially viable, encourage more providers to enter the field and remove unnecessary regulatory and administrative hurdles.
"Families are struggling with affordability at the same time providers are confronting the financial and operational realities of delivering care," Saunders said.