Imagine you are an entrepreneur with a great business idea. I was inspired. Your right to win is clear. What does it take to start selling goods and services, hiring employees, creating value for the American economy, and making this genius idea a reality?
You’d be forgiven if the idea that childcare is a critical business obligation wasn’t a top priority. For decades, the cost of doing business has not factored in the cost of watching over your children to start and grow your next great business. why? This is because in the past, for men who mainly started and ran companies, childcare was a natural thing to do and was put on the back burner. They almost certainly were not intended to be the child’s primary caretaker.
But the reality is that for millions of American women today—arguably the most entrepreneurial generation of women in history—the childcare crisis is a direct barrier to business growth.
That’s why 60 women entrepreneurs and ecosystem leaders from 26 states sent a letter to Congress asking lawmakers to permanently expand the child tax credit. This would give women of all backgrounds across the country more money to support their families and pursue their professional goals.
These women know firsthand the struggles of raising a family while growing a business. While many founders who are fathers have easier access to the capital, resources, and networks they need to grow their businesses, and typically handle a disproportionate amount of work from home, many founders who are mothers , faces a more difficult path. Mothers are overwhelmingly responsible for childcare, with 58% saying they are primarily responsible for childcare and housework, and only 32% saying they share responsibilities. are forced to take time away from work or limit their careers to care for their children. The kids.
The impending parenting cliff only makes this crisis even more urgent. Billions of dollars in federal funding for the child care industry are expected to run out by September 30, with thousands of child care facilities expected to close. There will be a further shortage of available childcare space and childcare costs will increase. Without the dedicated attention of policymakers, women in the workplace may no longer be able to afford to be there.
Congress should invest in supporting women entrepreneurs, including women with children. Motherhood is a powerful catalyst for entrepreneurship. Mothers often see problems from a different perspective that others cannot. And as mothers increasingly juggle their roles as primary parents and breadwinners, they have become experts at prioritizing and delegating. This is an essential skill when time is scarce (62% of mothers report having less than an hour of their time each day).
Motherhood gives many women the push to break free from the formalities of working for someone else. But starting a business requires up-front capital in the form of childcare, something too many women don’t have access to. The current lack of affordable child care means that America’s economic growth is being curtailed, innovation is halted, and women’s ambitions are stifled.
But we do know that women, especially women of color, are starting businesses at record rates. The future of business urgently needs affordable child care.
Women-founded businesses are extremely important in our economy. Women entrepreneurs build successful companies that create jobs and serve their communities, creating products, services, and solutions that generate approximately $1.8 trillion annually. Despite chronic underfunding, businesses founded and co-founded by women consistently outperform those founded by men. They generate more revenue over her five years and report a higher return on investment. Women entrepreneurs are also better at creating positive company cultures. Companies led by women have higher employee retention rates.
Simply put, female founders outperform despite the system.
Women typically face a difficult path to becoming entrepreneurs, and many would-be founders cite the burden of running a family business and raising children as reasons for not taking the risk of starting their own startup. 67 percent of women report spending at least $1,000 a month on child care. It’s no wonder that 52 percent of working mothers have considered quitting their job due to childcare costs.
And the lack of affordable child care only exacerbates other barriers women founders face. In the first quarter of 2023, women-founded startups raised just 2.1% of the annual venture capital issued, or $800 million of their $37 billion. . But it’s not just limited to venture capital. When women business owners apply for loans, they receive, on average, shorter terms, higher interest rates, and lower loan amounts.
We know that strengthening the child tax credit will help millions of families, including working mothers and women founders. Congress’ credit expansion in 2021 increased self-employment among members of low-income households, creating thousands of new businesses. Enhanced payments will help more families afford food and rent, giving them the cushion they need to learn new professional skills and take on the risks of starting a business. I did. And importantly, parents can now afford childcare, have paid work, and have more time to spend.
Implementing a larger, fully refundable child tax credit that can benefit more households, especially low-income and no-income households, would help women enter the workforce, stay in the workforce, and start businesses. It’s a simple step to help you pursue your path as a home.
There is a long list of changes that policymakers should pursue to ease that path. Permanently expanding the child tax credit is just the beginning. There is bipartisan, bicameral support, and it’s something Congress can do this year, especially as policymakers focus on year-end tax policy. If Congress really wants to support women as mothers, workers, entrepreneurs, and breadwinners, this is the first step.
Liz Tenetty is the co-founder of Motherly, a digital parenting platform that supports mothers, and an entrepreneur-in-residence at Georgetown University.
Kate Tammarello is the executive director of Engine, a nonprofit organization that works with startups across the country to promote entrepreneurship and pro-innovation policies.
Copyright 2023 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
#grow #economy #empower #women #startups #Expand #child #tax #credit