While many of the challenges faced by Maryland businesses earlier in the pandemic — from shutdowns to liability concerns related to the coronavirus — are now essentially over, struggles like supply chain slowdowns and labor shortages have taken over as their chief concerns.
Few in the business community point to state-level legislative solutions to these problems, but many are concerned about potential legislation that could worsen the supply chain crisis or otherwise place more strain on businesses as they struggle to hire workers and meet high consumer demand.
Business leaders and lobbyists plan to fight against measures, like a statewide paid parental leave program or an accelerated timeline for the state’s $15 minimum wage, that they believe would only serve to burden employers with new costs and challenges.
But some are looking at ambitious answers that may not address worker shortages directly, but instead seek to confront key causes of the worker shortage, including one area that business lobbyists aren’t used to engaging in — child care.
Women make up a significant portion of workers who have not returned to the work following layoffs during the pandemic, in some cases because they had to stay home with children who were doing online schooling. This has launched a conversation about the lack of affordable child care nationwide — something that is, in turn, being worsened by the lack of child care workers available to staff these facilities.
According to Del. Jared Solomon (D-Montgomery), there are three central factors contributing to the shortage of affordable child care. The first is that 751 child care centers in Maryland closed during the COVID-19 pandemic, as parents kept their children home rather than send them to day care. The second is a shortage of child care workers, and the third is the prohibitively high price of child care.
He hopes to address many of these issues in a legislative package he is developing.
“I’m not the first person to say it, but it’s something that’s sort of become a mantra of policymakers lately: Child care is really the workforce behind the workforce,” Solomon said. “It doesn’t matter how much money you make — if you have a child, and you don’t have a safe place for that child to be during the day, you can’t work.”
Child care push
The Maryland Chamber of Commerce is one lobbying organization that has already declared child care one of its top priorities for the 2022 General Assembly session. It’s not an area the chamber usually contends with, according to Andrew Griffin, the chamber’s vice president for government affairs, but it’s proven to be an increasingly important issue among its members as of late. So, the organization dedicated significant time over the summer to researching the issue and looking at what solutions have arisen in other states.
Possible measures could include the state providing tax incentives to encourage new child care centers to open, offering incentives for existing facilities to expand, or giving tax breaks to companies that offer their workers a child care stipend, Solomon said.
Additionally, Cailey Locklair, president of the Maryland Retailers Association, is working with the state government on a nonlegislative answer to the state’s child care challenges. Modeled on an initiative in Delaware, Locklair and her partners plan to create what she calls a “toolkit” of resources to teach the Maryland business community more about the importance of the child care sector in the state.
“It’s something really innovative that we haven’t seen before,” she said. “In six years, I’ve never really been engaged in this issue, and now it feels like it’s more important than ever.”
Meanwhile, some solutions may be as simple as making it easier to apply for the state’s Child Care Scholarship Program, which provides financial assistance to eligible families who need help covering child care costs, Solomon said.
“I have a master’s degree in education … and I look at our scholarship applications, and there are questions on there that I don’t know how to answer,” he said. “For an average family who’d never looked at this stuff before, who comes to a child care center and says, ‘I have a job offer. I need a spot for my child in the next two days or I’m going to lose this job,’ they can’t afford to do that.”
Any child care legislation that the General Assembly passes in 2022 will most likely build on the child care programs included in President Joe Biden’s $1.75 trillion Build Back Better Act proposal. About $380 billion in funds are currently slated to go towards establishing free preschools nationwide and subsidizing child care costs for low-income families.
While improving child care access will be a top priority of the business community in the 2022 session, leaders will be just as focused on taking a defensive stance against measures they expect will negatively impact businesses still trying to recover from the economic effects of COVID-19.
One point of concern is that paid leave provisions that may not make it into the Build Back Better Act will show up during the 2022 General Assembly session.
These provisions were previously struck from the bill, but were ultimately included in the version that recently passed the House of Representatives, in the form of four weeks of paid family and medical leave for all workers. This encompasses leave for new parents, those experiencing serious medical conditions, and those caring for family members with serious medical conditions.
Democrats have long sought widespread family and medical leave laws, which are standard in most developed countries. Maryland has tried, unsuccessfully, to pass paid leave laws in the past; the most recent attempt was sponsored last year by Sen. Antonio Hayes, D-Baltimore, in the Senate and Del. Kriselda Valderrama, D-Prince George’s, in the House.
The bill, titled the Time to Care Act of 2021, would have established a family and medical leave insurance program, with both employers and employees contributing to the fund.
But business lobbyists maintain that widespread leave laws would put too much stress on many employers.
“We’ve told legislators from day one of this debate that that’s just a financial burden on small business owners. Small business owners work with their employees to determine what benefits employees want, employers can afford to offer, and that’s how it should be,” said Mike O’Halloran, Maryland state director for the National Federation of Independent Business.
Supporters of the bill, which died in committee, argued that it would be highly beneficial to employees without seriously burdening employers, and that paid leave can even have positive effects on productivity, employee morale and retention rates. They also argued that providing paid leave through an insurance program “leveled the playing field” between small businesses and larger ones in states that have implemented similar laws.
“Without a state program, small businesses that cannot afford to offer the same generous leave benefits as larger companies are at a competitive disadvantage in hiring,” wrote A Better Balance, a national legal center that advocates for workers’ rights, in its testimony in favor of the bill.
That isn’t the only tax increase the business community is prepared to oppose.
Both O’Halloran and Griffin also recalled discussion from last summer about potential legislation that could accelerate Maryland’s $15 minimum wage from beginning in 2025 to beginning next July (or in July 2023 for smaller businesses), saying that their organizations would oppose such measures.
“Adding on additional layers (and) costs of doing business is just not a good idea,” Griffin said. “It’s probably a typical drumbeat, but it’s just something that we’re so hyper-focused on.”
O’Halloran said that he hopes to see a bill that would extend Governor Larry Hogan’s pandemic executive order that froze employers’ unemployment insurance rates at what they were prior to the pandemic.
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