There's a straightforward way for businesses to attract young workers in a competitive labor market: affordable childcare

• Millions of people are "missing" from the workforce because they're home providing childcare.
• But bumping up pay or offering bonuses isn't fixing the labor shortage.

As a labor crisis continues to hamper US businesses, access to affordable childcare could bring millions of workers back into the workforce.

Access to childcare was an issue before the pandemic, but the closure of daycare centers and shift to working from home exacerbated the problem. As Hannah Matthews, deputy executive director for policy at the Center for Law and Social Policy, recently told The Wall Street Journal's Kathryn Dill: "The pandemic worsened the realities of child care in this country."

Childcare centers are experiencing many of the same issues as other sectors - namely, low wages leading to labor shortages - and access to affordable childcare remains out of reach for many parents. As a result, many workers, particularly women, are opting to stay home to care for their kids. According to analysis from the National Women's Law Center, more than 300,000 women over the age of 20 left the workforce in the month of September alone.

"Women are not able to answer the 'help wanted' ad if they don't have steady, affordable childcare, because they know they can't be reliable, productive employees. So they're not applying for these jobs," Gina Raimondo, US Secretary of Commerce, told Insider's Juliana Kaplan and Madison Hoff last month.

Recent estimates from JPMorgan Private Bank found that 7.5 million workers are currently "missing" from the workforce. While the largest share is those who feel they have a bigger financial cushion than they did before, and therefore aren't eager to return to a low-paying gig, a significant percentage - 23% - aren't working for other reasons, including the need to care for their kids.

At the same time, businesses nationwide have been publicly lamenting how hard it is to fill open positions. Small business owners have reported resorting to hiring people out of retirement or adding inexperienced workers to their crews; national chains are hiring teenagers to alleviate staffing shortages.

The labor crunch has led many businesses to offer sign-on bonuses or raise wages to lure workers. Costco is now offering $17 per hour and Starbucks is raising its hourly wage as well. But the incremental wage increases or one-time payouts aren't solving the labor crisis.

Mathieu Stevenson, CEO of hourly work online marketplace Snagajob, recently told Insider's Áine Cain that he believes the benefits typically associated with white-collar work have "now become expectations and norms in blue-collar jobs."

He described this phenomenon as the "white-collar-ization of blue-collar jobs."

Better benefits = more workers

That means, if businesses want to lure workers, especially young ones, they're going to have to start offering better benefits - specifically, childcare.

Scott Paul, president of the Alliance for American Manufacturing, an industry group that partners with both manufacturers and unions, told Insider that his industry is particularly challenged due to the age of its workers, a problem he described as a "demographic cliff": A substantial number of manufacturing workers are beginning to reach retirement age, which means that companies needs to hire new, younger workers to fill their place.

"Things like childcare become more of an issue than it is for your workers who are well into their 50s, who are empty-nesters or what have you," Paul said. For a lot of manufacturers, childcare benefits haven't really been a priority, and so "you don't really see an auto factory with a childcare center on-site," he said.

Paul said that offering a benefit like that could not only attract new workers - a job that offered affordable, on-site childcare would have an obvious appeal over one that doesn't - but it could also help retain the employees these companies already have and perhaps help prevent workers from rage-quitting.

Some companies are starting to make the shift already. Emergency childcare became a relatively common benefit in 2020 among large companies like tech firms, but now McDonald's franchises have the option to offer employees emergency childcare, too. And employer-based child-care facilitator Bright Horizons Family Solutions told CNBC it's seen an uptick in employers using its services to the tune of a 20% jump in 2020 alone, CNBC reports.

According to Paul, this type of benefit is a no-brainer for companies looking to get a leg-up on hiring.

"Firms that are providing better pay, better benefits generally have fewer challenges [hiring] than firms that don't," he said. "That's basically an ironclad law of labor economics, and there's no amount of wishful thinking that will change that."