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DSM USA Policy HQ - Child Care

Child Care and Cliff Effect

April 19, 2021


The DSM USA Policy HQ podcast is a monthly conversation between experts on public policy topics impacting business and the relationship between government and the private sector.

Iowa has one of the highest rates of both parents participating in the paid workforce. Considering this, ensuring quality, affordable child care is essential to continuing to grow the workforce in Greater Des Moines (DSM). In the seventh episode of DSM USA Policy HQ, Iowa State Representative Ann Meyer (R – Fort Dodge) and United Way of Central Iowa Advocacy Officer Dave Stone share insight into the "child care cliff effect", where an increase in income can cause a loss of child care assistance eligibility. 

Child Care Cliff Effect

Stone says that United Way of Central Iowa supports education, training and advantages to encourage self-sufficiency. Through the ALICE Report, short for Asset Limited, Income Constrained, Employed, the organization has discovered that child care is the largest expense for a typical Iowa family, outpacing housing by 40%. For parents of young children, cost, availability and accessibility are important factors to determining whether a parent must leave the workforce to take care of children. Market rate child care is expensive for everyone. It is a cost that does not change. Stone says that United Way and its partners have identified the cliff effect as a key barrier to lower income families getting ahead and a barrier to expanding Iowa’s workforce. A raise can push them above income limits for Iowa’s Child Care Assistance program, where the raise will not cover the cost of the child care they need. 

In the Legislature, Rep. Meyer says that child care issues have been a priority of the House for a long time. Iowa’s unemployment rate is so low that employers need workers who live in Iowa and who are willing to take on more work. For those moving from out of state who probably won’t have family here, child care options are integral. This makes child care a workforce issue. If businesses don't see child care options in the state, they are less likely to bring their businesses here. Stone agrees that it’s a workforce issue, saying that Iowa ties for first in the nation for parents working, with 75% of parents in the workforce. 

Rep. Meyer also discusses child care bills moving through the Legislature, including one to help rural child care. The bill, House File 260, goes into effect on Thursday, July 1 and lets unregistered in-home providers in Iowa add an extra school-age child to in a child care home. The bill addressing the cliff effect is House File 302, which has been a top priority of the Partnership. It has passed the Iowa House and is awaiting approval from the Iowa Senate.

Stone and Rep. Meyer go on to share businesses and strategies that are innovating in ways to support their workforce, as well as share ways listeners can get elected officials excited about child care policy and the role of government in supporting business and vice versa.

Find out more how child care current impacts and future trends in light of the pandemic at DSMforward.com or learn more about this public policy issue by watching the 2021 Public Policy Issue Forum on Child Care here.

Listen to the entire podcast above.

The DSM USA Policy Headquarters podcast focuses on public policy topics impacting business and the relationship between government and the private sector. Join us each month to hear from local Greater Des Moines (DSM) experts. To listen to more Partnership podcasts, click here.


The DSM USA Policy HQ podcast focuses on public policy topics impacting business and the relationship between government and the private sector.