A Crisis in America: Why Parents Can’t Afford to Work, a conversation with working parent advocate Mel Faxon

The childcare crisis is crippling American businesses, costing them a staggering $23 billion annually. With 40% of US parents burdened by childcare debt, the need for affordable solutions is more urgent than ever. This isn’t just a family issue; it’s a business imperative.

The statistics paint a stark picture: two-thirds of mothers considered leaving the workforce last year due to childcare costs, and 40% of working mothers have turned down promotions due to childcare concerns.

Joining us today for our Curated Career Conversation is Mel Faxon, a childcare affordability specialist and co-founder of Mirza. Mirza is an innovative company tackling the childcare affordability crisis head-on. Mel is a passionate advocate for working parents and a champion for creating a world where no one has to choose between their career and their family.

Before I begin, I want to be clear: I wholeheartedly believe that being a stay-at-home parent is a valid and valuable choice. This conversation isn’t about judging anyone’s personal decisions regarding work and family. My focus here is on the vital role working parents play in our economy and the urgent need to address the childcare challenges that hinder their success.

I feel passionately about this topic and am excited to share my conversation with Mel.  We explore the cost of childcare to both parents and employers, discuss solutions for companies, and examine the policy changes needed to address this critical challenge. Let’s get started…

The Economic Impact of Childcare

Sarah Johnston (SJ): Mel, you are a strong advocate for working parents and a champion for creating a world where no one has to choose between their career and their family. I thought we could kick off this conversation with a couple of questions. Why do you think it’s hard to keep parents in the workplace? Why do you think we have those stats about childcare cost that I read at the top of the interview? 

Mel:  I’m incredibly passionate about creating a world where parents don’t have to choose between their family and their career. If it’s a choice you make intentionally, that’s great. Too often, however, people lose control over their decisions due to the overwhelming cost of childcare.

There are several reasons why caregivers leave the workforce, including personal reasons and career aspirations. However, the struggle to find childcare that aligns with your needs, work style, and schedule is a major factor.

Mel: We’re facing a childcare crisis in the US, with many areas lacking affordable options. The high cost of care results in 40% of parents burdened with childcare debt. Each year, a quarter of parents reduce their working hours or leave the workforce entirely due to childcare cost.

The situation is dire, with daycare now exceeding college tuition in cost. Families are spending a substantial portion of their income on childcare, ranging from 20% to a staggering 45%. This financial strain has significant consequences for both families and the overall economy.

SJ: I’m not surprised by those figures. When my children were younger, I paid $137 per day for employer-sponsored daycare. It was a mind-boggling amount that felt like a second mortgage. It’s easy to see why parents leave the workforce when the average annual cost of childcare in metropolitan areas is $17,000 per child.

Beyond the direct expenses, there are hidden costs associated with childcare. These include lost wages, career stagnation, and unexpected expenses like sick day coverage. When my children were young, a sick day meant paying significantly more for a sick-day nanny. We need to raise awareness about these less-discussed financial burdens, especially for female caregivers who often bear the brunt of these costs. 

Mel: It’s a great point. So much factors into how we think about career trajectories for women and the gender pay gap. If you control for location, industry, and experience, the gender pay gap is about 98 cents to $1. So it’s actually really close. It’s when we have kids that it really starts to peel away. The motherhood penalty makes up 80% of the gender pay gap. One year unpaid out of the workforce can cost 39% of your lifetime earnings.

Mel: That’s an astronomical number. And it’s something that we don’t think about when we do that short-term thought of: right now, the cost of childcare is more than my take-home salary. What does that mean for pension contributions or for career acceleration? Those hidden costs become really crucial to consider. As well as the burden of backup or emergency care. That economic impact on the stay-at-home parent (mom or dad) is really important to think about.

SJ: I understand that, for some, the decision to stay at home with their children stems from necessity. The cost of childcare can be so overwhelming that working costs more than staying home. But, Mel, what are the long-term implications for someone stepping away from the workforce to focus on their family, especially when it feels like a financially necessary choice?

Mel: Yes, sometimes it really might not be possible for your family to pay the current cost of childcare. You might need someone to stay back because that number is so high. That is part of why we see women retiring with $400,000 less than their male counterparts on average. That retirement gap is so large because stay-at-home moms miss the ability to contribute. They miss that compounded interest over time.

Often when women leave the workforce, they can’t come back in at the same level. To account for that, it might mean chatting with your partner about ensuring they’re helping you contribute to your retirement. Because while you’re raising your family, which is very important work, you still need to make sure that the financial stability is there at the end of the day. 

Employer Solutions and Advocacy

SJ: What advice would you give to an HR leader who recognizes the need for additional benefits or support within their workforce? How can they collaborate with you or explore other resources to address these needs?

Mel: First and foremost, childcare solutions will look different for every organization. There’s often a need for multiple approaches. It can start small. Employers can offer flexible work arrangements or set core meeting hours to allow parents to manage school drop-offs and pick-ups. At our organization, we provide eight care days a year. That’s because, on average, parents miss about eight days annually due to childcare challenges. This benefit helps ensure employees don’t have to take unpaid leave or worry about how those missed days might impact their work.

Childcare is a fundamental need for employees to perform their jobs. Without someone to care for their children, they simply can’t go to work. It’s important to shift the perspective of childcare from being a “fringe benefit” to recognizing it as a structural necessity and even an operational expense. Supporting parents might involve offering discounts with local providers, emergency backup care for situations like a sick child, sustainable subsidy programs, or connecting employees to government assistance. These solutions can vary based on the unique needs of your workforce. If any HR leaders here are interested in exploring this further, I’d love to have those conversations.

SJ: I love that you’re highlighting the importance of creative, out-of-the-box thinking. I recently spoke with a Chief Operating Officer of a manufacturing facility in Georgia who shared their experience with a significant recruitment challenge. Historically, they had been a top employer in their area. But in 2020, the number of people interested in working for their organization dropped sharply. They struggled to fill open roles. Initially, they believed their ideal candidate was a male aged 20 to 24. However, after analyzing their HR data, they discovered that their most reliable and best-performing employees were actually working moms.

When they adjusted their work hours to allow employees to leave by 3:00 p.m. to pick their kids up from the bus, they saw a substantial increase in applications. This simple, thoughtful change not only addressed their recruitment issue but also supported the needs of their workforce. It’s a great example of how being creative and rethinking traditional practices, such as work hours, can have a meaningful impact on both recruitment and employee satisfaction.

Mel: I love that; it’s such a great story. It’s just asking those questions, right? Thinking about why people are unable to work. There’s a great stat that 62% of stay-at-home moms would go back to work either part-time or full-time, and the only thing keeping them back is the cost of childcare. If you can remove that barrier from a recruitment standpoint, you open up such a bigger applicant pool and the ability to have more folks there.

Advocating for Reduced Childcare Costs

SJ: Mel, I’d love to hear your thoughts on why more people aren’t solving this problem. This, in my opinion, is one of the greatest challenges facing women in America. I don’t feel that enough smart minds are working on this. What’s holding people back?

Mel: Oh, it’s such a big question. We are one of the only countries in the developed world that doesn’t mandate paid family and medical leave. We spend the least amount on children before the age of public kindergarten. When you think about countries like Sweden or a lot of Europe, they have either free or completely subsidized child care and programs built in. They see much less of a gender pay gap because of that.

Mel: During World War II, the United States implemented a nationalized childcare program. This was to support women entering the workforce while men were fighting overseas. Free daycare centers were established to meet the demand, but once the war ended, many of these programs were dismantled as the country sought to reinforce the idea of the nuclear family. Today, more than 50% of families are dual-income households, with both parents working to make ends meet. However, our policies and societal structures have not evolved to reflect this shift. There’s still a lingering assumption that one parent, traditionally the mother, will stay home to care for children. This is increasingly unrealistic and frustrating for modern families navigating the financial demands of today’s economy.

Progress is being made in pockets across the country. Startups in the childcare space are working on innovative solutions. Certain states, like Kentucky, Indiana, and Michigan, are taking notable steps from a policy perspective. Encouragingly, many of these initiatives have garnered bipartisan support. However, a major challenge remains on the supply side: the childcare workforce itself. Workers in childcare often earn less than Starbucks baristas, making it a career path that lacks sustainability and long-term prospects. This undervaluation of caregiving creates a cycle where affordability is a challenge for parents, and providers struggle to maintain a steady, skilled workforce. Addressing this crisis will require solutions that balance affordability for families with fair compensation and support for childcare workers.

SJ: Do you think universal pre-K would help move the needle on this important issue? 

Mel: I’m a huge fan of universal pre-K. And again, that is something that we’re seeing in a lot more states. New York, California, Philadelphia, some of it’s on city levels, but we’re starting to really see that come. Massachusetts, Georgia, North Carolina, have a free or universal pre K for four year olds. That is something that can drastically move the needle. If we could get that across the board, that’d be fantastic. After that, how do we think about that zero to two range, where it can be the most expensive for families? How do we try to mitigate those costs?

SJ: For readers ready to take action, how can they make an impact? If someone wants to rally for legislative change or write to their Congressperson, what advice would you give them? What specific issues should they advocate for, and who should they reach out to? How can you empower our readers to bring more visibility to this critical topic? What meaningful steps can they take toward driving change?

Mel: Advocacy plays a crucial role in driving change, and there are impactful organizations leading the way. One example is Moms First, which actively lobbies for policies like paid family leave and childcare support. Last year, they partnered with The Skimm on a “Show Me Your Childcare” campaign to highlight employers making strides in these areas. Additionally, leaders like Secretary of Commerce Gina Raimondo have championed initiatives to build childcare supply across certain sectors, emphasizing its importance to the economy. I recommend starting by exploring the work of Moms First and engaging with their resources.

It’s also important to research what policies exist in your state. Does your state offer paid leave or universal pre-K? These are great starting points for conversations with your representatives, where you can advocate for initiatives that would significantly benefit families. Similarly, look into what policies your employer has in place. Ask questions about how your workplace supports employees with caregiving responsibilities and identify areas for improvement. Ultimately, we need public and private partnerships to address these challenges. Even for those who aren’t parents, understanding how these issues affect colleagues and workplace productivity can foster better support structures for everyone to succeed together.

Mirza’s Role in Childcare Affordability

SJ: We’ve discussed at length why the childcare cost crisis is an issue in the US. Tell me about the decision to start Mirza. What prompted you to decide to take this leap, and what problems are you solving with Mirza? 

We started Mirza with the fact that there are $140 billion of unclaimed benefits every year in the US, which means, only 10 to 13% of families access these funds. How do we make sure that people are getting the financial support they’re already entitled to?

Mel: To give a quick overview of Mirza, we are essentially a Turbo Tax for government benefits. We started with childcare subsidies. We help folks take a three-minute survey to understand what programs they might qualify for and we help them apply.

Both my co-founder and I spent a lot of time with hourly workforces. I worked in hospitality and restaurants and spent some time at an Amazon fulfillment center. You really see firsthand that when people don’t have childcare, they can’t come to work that day, and then they can’t get paid that day. Vocations like that are not salaried. They don’t have paid time off, so if you’re not working that’s a really detrimental hit for your family. It also really impacts that business’s ability to operate, to be streamlined, and to make sure that they are fulfilling customer demands and expectations.

We started Mirza with the idea, or the fact, that there are $140 billion of unclaimed benefits every year in the US. This means only 10 to 13% of families access these funds. How do we make sure that people are getting the financial support they’re already entitled to? My co-founder had employees who were denying promotions and then taking out loans to pay for childcare. One more dollar an hour would mean they lost access to benefits, but the promotion was not enough to cover that cost. We really came to it with personal experience. Then, we just looked at the inefficiency of how things are currently set up.

SJ: Who are Mirza’s customers? Who’s accessing what you’re working on? 

Mel: We work with large enterprise-level employers right now. Anyone who has hourly workforces: you can think about deskless jobs, retail, and manufacturing. We work with Medicaid plans as well. For folks who are enrolled in Medicaid plans, we can help them access benefits that they are likely to qualify for. We can connect populations of employees who often aren’t even eligible for benefits, who might be working part-time, to resources in a way that a lot of employers aren’t able to do on their own. We’re a really affordable way for employers to connect employees to an average of $10,000 a year per child if they qualify for government-sponsored child care.

Re-Entering the Workforce: Advice for Returning After a Childcare Related Work Break

SJ: What advice do you have for parents who have already left the workforce, whether it’s been for a year or even ten, and now want to re-enter?

To start, one key piece of advice I always offer is to stay connected in some capacity while you’re out. I’ve seen friends who left and completely disengaged from their industry, which can make it much harder to re-enter. My suggestion is to stay relevant by doing something, even on a smaller scale. For instance, consider opening up an LLC for a modest $300 investment. You don’t have to dive in full-time, just commit to offering your services for a few hours a month. That way, when you’re ready to return, you have real stories and experiences to showcase that will be valuable to future employers.

For those who didn’t stay active in the workforce in this way, I recommend focusing on self-investment, especially through learning. Recently, I was talking to a friend at the playground who had no idea what ChatGPT was, and I realized how essential it is to stay current on the technologies and tools shaping industries today. Even if you’re not actively working, learning about new tech and software can make a huge difference when you decide to re-enter the job market.

Mel: I love that idea, and I think it’s so important to stay engaged in your industry whether you’re returning to the same field or transitioning to a new one. Reading articles, sharing insights on LinkedIn, or posting about current trends can help establish you as a thought leader in your space. By showing that you’re staying current and active, you’re signaling to potential employers or recruiters that you’re still in the loop and ready to contribute. It’s a great way to demonstrate that you’re not just re-entering the workforce, but you’ve been actively engaged and informed.

Networking is another key piece, no matter where you are in your job search journey. Whether you’ve been out for a long time or just a short while, connecting with people, having coffee meetings, and sharing your experiences can make a big difference. One thing I always appreciate when hiring working parents is their ability to prioritize and get things done. They’re masters at juggling multiple responsibilities, knowing which tasks need to be tackled first and which can wait. Highlighting this skill can be a game changer when you’re looking to re-enter the workforce.

It’s important for HR professionals to reflect on their approach to hiring as well, particularly when evaluating career gaps on resumes. They should consider how to address and mitigate biases in their decision-making process. Instead of focusing on the gap itself, HR should recognize that candidates may have been managing a household, coordinating schedules, and prioritizing various tasks. Training programs could help shift the perspective of hiring managers, emphasizing that candidates can be valuable colleagues and effective employees, provided they receive the necessary support.

There are some great organizations specifically focusing on hiring moms and parents who have left the workforce and are trying to come back. I’m thinking of The Second Shift, but there are now a few great companies working purely in that area to help connect parents who have had to take time out of the workforce.

SJ: I’m a huge advocate for part-time jobs, especially for parents and caregivers, and I’m proud to implement this in my own business, Briefcase Coach. With a team of 11, most of my colleagues work in part-time roles, and I firmly believe this setup benefits everyone involved. By offering competitive salaries and allowing people to utilize their skills in flexible, part-time capacities, we help reduce the burden of childcare costs while enabling our employees to thrive. This arrangement empowers individuals to balance both their careers and caregiving responsibilities without sacrificing their professional growth.

More and more entrepreneurs are recognizing the immense value caregivers bring to the workforce. They possess exceptional skills, and there’s a vast, untapped pool of talented individuals seeking part-time opportunities. I encourage anyone looking to re-enter the job market to think beyond large corporations like Amazon and Google and consider smaller businesses or boutique organizations. Don’t just wait for a job posting—reach out to founders or CEOs directly. Pitch your case and show them why you’d be an asset to their team. Some of my best hires have been part-time working parents, and they’ve played a key role in helping me grow as an entrepreneur. Caregivers are a tremendous resource to the workforce, and their contributions shouldn’t be overlooked.

SJ: We’ll end, Mel, with one final question. How would you like to leave us today? How can people find you? What steps should people take from our session today as a call to action?

Mel: Definitely follow me on LinkedIn. I love chatting. Slide into my DMs if you have more questions that you didn’t get to ask today. Our website is heymirza.com if you want to check out the work that we’re doing. If you are in the employer space and you are trying to think about how to support employees, please reach out. Even if it’s not our solution, we can help guide you towards other products or solutions that exist. For anyone who is a parent who’s passionate about things like this, again, that advocacy step. Follow Moms First, reach out to your representatives so that we can all advocate for the structural change for this to actually be solved.

SJ: And just a fun kind of quick story for folks who are listening, I got connected to you through a friend, an old friend whose organization is using Hey Mirza. She said such positive things about your organization and the impact that you’ve had there. Please follow Mel. I’m so grateful that we got to have this conversation. And thank you so much.