EDITORIAL – Mike Bockorny, CEO of Economic Development Professionals Association
Childcare is not just a family issue; it is a business development issue. The ability of South Dakota families to access quality, affordable childcare directly impacts workforce participation, economic productivity, and long-term growth. As the CEO of the Economic Development Professionals of South Dakota, I see firsthand the challenges businesses face in attracting and retaining workers due to the childcare crisis.
Across the state we have seen communities bring together business leaders, community stakeholders, childcare providers and parents to work toward developing viable solutions to solve the childcare crisis. Furthermore I have had the privilege to work on this issue over the past two years as a member of the Statewide Childcare Taskforce, led by Senator Tim Reed out of Brookings. The Taskforce worked tirelessly with countless businesses and individuals across the state. This effort yielded an in depth report which led to the introduction of legislation this past session.
One bill, HB 1132 was passed by both the House and Senate and landed on the Governor’s desk. Unfortunately, that bill was the only one vetoed this session. While we disagree with the Governor’s reasoning, we look forward to partnering with the administration in the future on this issue and will engage over the summer with all stakeholders. The remainder of the information below shows specifically why we need to find solutions to this issue.
Childcare is an essential support system for families, allowing parents to pursue careers, education, and financial stability while ensuring their children are cared for in a safe, enriching environment. Without access to reliable childcare, families are forced to make difficult choices—many parents, particularly mothers, must scale back work hours or leave the workforce entirely, straining household incomes and limiting career growth. This also places additional stress on extended family members who may step in to provide care, often at the cost of their own employment and well-being.
For working families, childcare is more than just a necessity, it is a pathway to financial independence. A lack of accessible childcare can lead to lost wages, decreased career mobility, and increased reliance on public assistance programs. Ensuring that all families have access to affordable, high-quality childcare strengthens our workforce and promotes economic resilience in South Dakota.
Beyond the economic implications, high-quality, state-licensed childcare environments provide significant benefits for children’s development. Research consistently shows that children who participate in structured early learning programs experience better cognitive, social, and emotional outcomes. These programs provide young children with opportunities to develop critical thinking skills, build relationships, and establish early literacy and numeracy foundations that prepare them for success in school and beyond.
Quality childcare environments also contribute to healthier emotional development by providing consistency, positive social interactions, and nurturing relationships with caregivers. Children in these programs learn essential skills such as problem-solving, communication, and collaboration—skills that will serve them throughout their lives. Studies have demonstrated that children who receive early education are more likely to graduate from high school, pursue higher education, and achieve higher earnings in adulthood.
South Dakota is home to nearly 70,000 children aged five and under. A staggering 72% of these children have all parents in the workforce, underscoring the pressing need for reliable childcare. Yet, the state faces a 35% shortfall in licensed childcare capacity, leaving thousands of families scrambling for solutions. The economic impact of this childcare deficit is severe, costing the state an estimated $329 million annually in lost productivity and economic growth.
Employers across the state recognize this as a barrier to workforce participation. Without adequate childcare, parents, especially mothers—are forced to reduce their work hours, decline job offers, or leave the workforce entirely. This, in turn, contributes to labor shortages, increased turnover, and reduced economic output. In an era where talent attraction is key to economic growth, South Dakota cannot afford to ignore the childcare crisis.
Childcare is an essential part of the workforce infrastructure. Just as roads and broadband facilitate commerce, a strong childcare system enables parents to work, employers to operate efficiently, and communities to thrive. The U.S. Chamber of Commerce has identified childcare as a critical economic driver, emphasizing that industries across the board suffer when childcare is unavailable or unaffordable.
Moreover, investments in early childhood yield significant returns. Studies show that every dollar spent on high-quality early childhood programs generates a return of $4 to $9 through improved educational outcomes, increased earnings, and reduced social service costs. The Heckman Equation, a leading economic model on early childhood investment, demonstrates that early interventions lead to higher productivity and a more skilled workforce in the long run.
The childcare sector in South Dakota operates on a broken business model. The cost of providing quality care far exceeds what many families can afford to pay, leading to chronic underfunding and high staff turnover. Early educators earn an average of $12.67 per hour, well below the state’s living wage of $19.58. This wage disparity makes it difficult to attract and retain qualified childcare professionals, further exacerbating the shortage of available care.
Additionally, rural areas face unique challenges. Nearly 44% of South Dakota’s population resides in rural communities, where access to licensed childcare is even more limited. Families in these areas often rely on informal care arrangements, which can be inconsistent and lack the developmental benefits of formal early childhood programs.
South Dakota’s future depends on strong families and a stable workforce—and neither of these work well without affordable and amazing childcare. We can no longer afford to treat childcare as a secondary issue. It is a fundamental component of economic development, workforce participation, and long-term prosperity for families. While we are not successful in our legislative efforts this year, we will continue to search for both legislative and non-legislative solutions to solve the childcare crisis in South Dakota.
