When Child Care Access Falls Short, Everyone Feels It
Have you noticed shortened hours at your favorite local restaurant, or drive-thru only service where dining rooms used to be open? Have you had to wait months for a medical appointment, or seen “Now Hiring” signs lingering in the windows of grocery stores, banks, and post offices across the Northland?
Anytime we travel around Northeast Minnesota, we see the same story repeating itself: Help Wanted signs everywhere, long waits for everyday services, and small businesses struggling to stay open full hours.
So what’s behind it all?
It’s not a lack of ambition or available jobs. It’s due, in part, to the lack of child care. This is a quiet crisis that’s sidelining parents, shrinking the workforce, and straining the very systems our communities rely on every day.
At a Glance
Women’s labor force participation is declining for the first time since 2021, while men’s continues to rise.
Child care costs are increasing 1.5× faster than inflation—up 5.2% year-over-year (Bank of America Institute, 2025).
Northeast Minnesota faces a shortage of more than 4,000 child care slots, including in Duluth (First Children’s Finance).
Caregiver access matters: A –0.89 correlation exists between caregiver employment and family financial stability in the Quad Cities region.
The National Context: The Care Economy Under Strain
A recent Bank of America Institute report shows that the rising cost and shrinking supply of child care are reshaping the U.S. workforce. While men’s participation has edged upward, women’s participation has steadily declined, reversing three years of post-pandemic recovery. As the U.S. Department of Labor reported in 2024, “The lack of a robust care infrastructure may continue to prevent mothers from achieving their full potential in the labor force.”
For the first time since 2021, more women cite family responsibilities as their reason for being out of the labor force. Bank of America data show a drop in households receiving multiple paychecks while making child-care payments, particularly among lower-income families, indicating that many parents, most often mothers, are leaving the workforce to provide care.
National Data Snapshot (2025)
Child care costs: +5.2% YoY (vs. +3.4% overall inflation)
West North Central Region (including MN): +8.2% YoY—highest in the U.S.
Share of women not working due to caregiving: 14% (vs. 1.5% for men)
Northeast Minnesota’s Workforce Challenge
Across the Quad Cities region (Eveleth, Gilbert, Virginia, and Mountain Iron), data show child care access is tightly intertwined with economic stability. The correlation between the share of caregivers able to work and the percentage of families struggling financially is –0.89, revealing how care access directly influences household well-being.
Demographic Realities
Median age: 48.4 (vs. Minnesota median 38.8)
Labor force participation: >10 points below the state average
Prime-age participation (25–54): 84.5%, leaving approximately 12,100 adults out of the labor force
About one-third of those are disengaged due to caregiving constraints
Women aged 20–44 represent a smaller share of the regional workforce than their state peers (i.e., those most likely to have young children)
If national patterns hold, a lack of affordable, available child care is removing thousands of potential workers from the regional economy each year.
A Regional Shortage with Far-Reaching Effects
According to First Children’s Finance, Northeast Minnesota—including Duluth—faces a shortfall of more than 4,000 licensed child care slots, limiting workforce availability and restricting family mobility. Parents face untenable choices: long commutes, reduced hours, or leaving work entirely.
This shortage touches every sector—health care, manufacturing, education, and service industries—all reporting challenges recruiting and retaining workers with young children.
And the toll isn’t just financial. A 2025 Care.com survey found that nearly one-third of parents have contemplated self-harm due to the overwhelming stress of caregiving. On this point, Brad Wilson, CEO of Care.com, argues: “We, as a society, cannot stand idly by while parents endure a daily depletion of their time, money, and energy taking care of those who depend on them the most.”
The Broader Picture: Care as Infrastructure
Child care doesn’t stand alone. Families’ ability to work depends on a network of supports:
Affordable housing near employment centers
Reliable transportation for multi-shift households
Living wages that make paid care feasible
Flexible scheduling and predictable hours
Together, these elements create the foundation of a resilient care economy—one that enables families to thrive and employers to compete.
A Way Forward: Public–Private Partnerships and Section 45F
Solving the child care crisis requires public–private partnerships (PPPs) that bring employers, providers, and communities to the same table. One powerful tool leading the way is the federal Section 45F Employer-Provided Child Care Tax Credit, recently expanded to make participation easier for businesses of all sizes, not just large corporations.
Under Section 45F, employers can claim a tax credit of up to 50% of qualifying child care investments, including:
Direct support to child care providers
Capital investments in facilities and expansions
“Guaranteed slot” agreements that secure dedicated spaces for employees’ children
Benefits for Employers and Communities
When employers invest in child care through PPPs, they can:
Stabilize providers through predictable revenue
Secure priority access to slots for employees
Improve recruitment and retention in competitive labor markets
Realize a strong ROI—often exceeding 400% when accounting for reduced turnover and absenteeism
These partnerships shift the narrative: child care is not simply a family responsibility—it is workforce infrastructure.
Innovation in Action
Rural Pathways and Iron Range Tykes piloted the Enhanced Two-Tier Provider Partnership Model, a nationally recognized approach honored with the Wings of Innovation Platinum Award at TOOTRiS’ 2025 Summit. Selected from six national finalists—including Child Care Aware organizations from Missouri, Kentucky, and Kansas, as well as PATCH Hawaii and Mountain Heart South CCR&R—the model demonstrates what’s possible when policy, private investment, and provider expertise align.
The model leverages Section 45F to bring much-needed new private dollars into the child care sector, directly supporting living-wage compensation for early childhood staff, stabilizing operations, and expanding reliable care access for working families.
Next Steps for Action
Employers: Assess eligibility for Section 45F and explore partnership options with local providers, including guaranteed-slot agreements.
Economic Development Leaders: Integrate child care capacity into workforce, housing, and business-attraction strategies.
Child Care Providers: Engage employers as long-term partners—positioning child care as essential workforce infrastructure, not a stand-alone service.
Policymakers & Philanthropy: Expand state matching incentives and support regional pilots to leverage federal credits and private investment.
Learn More
For additional insights and partnership guidance, access Rural Pathways’ policy brief: Economic Impact of Expanding Child Care Access in Minnesota’s Iron Range and connect with us to explore Section 45F and public-private partnership models in your community.
Citation: Anderson, Charity & Gilpin, Staci. (2025). When Child Care Access Falls Short, Everyone Feels It. Rural Pathways News.