Child Care Solutions: Boosting Workforce and Economic Growth

When parents can’t find or afford care, they’re forced out of the workforce, and businesses lose out on skilled employees. Child care gaps sideline workers and strain manufacturers’ staffing, with states losing an estimated $1 billion annually due to child care breakdowns, according to U.S. Chamber of Commerce Foundation estimates. In response, employers are leading the response efforts to ensure parents don't miss out on access to care, and workers aren't forced out of the workforce.

One example of this is already underway at Toyota. The automaker is demonstrating how to build a future where working parents can thrive. In a major announcement, the company unveiled plans to open four new child care facilities at manufacturing sites in North Carolina, Mississippi, Alabama, and West Virginia. Toyota currently offers child care at its facilities in Kentucky and Indiana. The facilities will offer up to 1,064 new child care spots to local communities, be tailored to plant schedules, and be operated by high-quality providers.  

These types of child care centers offer immense benefits to both parents and children. Workers at these plants will gain access to onsite child care centers that accommodate diverse work shifts, providing maximum convenience and peace of mind for working parents. Meanwhile, children enrolled in Toyota’s high-quality programs will benefit from age-based curriculums that support physical, cognitive, and social-emotional development. Each center will feature STEM education rooms, outdoor playgrounds, and commercial kitchens. Each site will go through the National Association for the Education of Young Children (NAEYC), the gold standard for quality child care.  

This isn’t just a benefit; it’s a business strategy. As Denita Neville, Toyota’s VP of Corporate Shared Services, said, “Offering child care motivates and empowers our team members, makes our industry more inclusive and helps our smallest learners of today become our biggest leaders of tomorrow.” Toyota’s investment reflects a growing recognition among employers: child care is essential infrastructure that prepares today’s students for tomorrow’s workforce.  

Across the country, child care shortages are sidelining talent and stalling growth. The Bureau of Labor Statistics reports that this year alone, 332,000 workers missed work due to child care problems. When parents can’t find or afford care, they’re forced out of the workforce and businesses lose out on skilled employees. 

That’s why the Chamber championed key enhancements in the One Big Beautiful Bill Act, which improved three critical child care tax provisions: 

1. 45F:  The employer credit rate increased from 25 percent to 40 percent, and to 50 percent for eligible small businesses. The maximum credit rose from $150,000 to $500,000, or $600,000 for small businesses. Qualified expenditures now include costs associated with contracting with third-party intermediaries and jointly owned or operated childcare facilities. These changes make it easier for businesses to invest in childcare solutions for their workforce.   
2. DCAP:  The annual pre-tax contribution limit was permanently increased from $5,000 to $7,500 for individuals and joint filers, and from $2,500 to $3,750 for those married filing separately. This gives employees more flexibility to save for childcare expenses through employer-sponsored plans.   
3. CDCTC:  Beginning in 2026, the maximum reimbursement rate for the lowest-income earners will increase from 35 percent to 50 percent. The percentage of reimbursement for qualifying expenses will continue to decrease gradually as income rises. This means more working parents will receive a larger credit to help cover childcare costs.  

The Chamber led the charge in advocating for reforms, educating lawmakers, and mobilizing the business community. Our message was clear: solving the child care crisis is a key part of unlocking America’s workforce potential. 

Toyota’s announcement is another example of what’s possible when businesses are empowered to provide solutions. The Chamber will continue to advocate for scalable solutions to achieve a future where child care is no longer a barrier to work, but a bridge to opportunity. 

About the author

Stephanie Ferguson Melhorn

Stephanie Ferguson Melhorn is the Executive Director, Workforce and International Labor Policy. Her work on the labor shortage has been cited in the Wall Street Journal, Washington Post, and Associated Press.

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