Last April, DC Mayor Muriel Bowser framed key early childhood investments in her fiscal year 2026 budget proposal as a strategy for family retention and economic prosperity. “We know that when we invest in our children and families there are many benefits—for our children’s learning and development, for our neighborhoods, and for keeping families in DC,” the mayor said.

Nearly a year later, the mayor has proposed reducing these investments while maintaining a focus on keeping families and attracting new residents, growing DC’s economy, and creating new jobs. To understand the connections between business development and child care—a critical work support that ranks among top household costs—we interviewed five DC-based business leaders representing large and small employers and business membership organizations about the District and its opportunities and challenges as a place to do business and raise young children.

Business leaders reported that DC has a robust child care system and is overall a family-friendly city. DC has enacted pathbreaking policy innovations to improve access, quality, and affordability, including its voluntary compensation program, which supports providers in offering competitive wages to early childhood educators.

But affordability challenges are threatening the viability of local businesses—including child care businesses—and the District’s ability to attract and retain families. They also offered recommendations to strengthen the child care and business sectors in DC.

DC’s early childhood investments yield tangible benefits

DC routinely leads the country in child care and early education innovations. These include a first-in-the-nation compensation program for early childhood educators, universal preschool, and investments in facilities and quality improvement.

Of the five business leaders we interviewed, two were very familiar with the compensation program, two had read up on it in preparation for our interviews, and one was not familiar at all. The four business leaders with knowledge of the program described its costs and benefits, with two expressing pride in DC’s investments in early childhood education. One stated that the compensation program is “another way that DC is leading by example across the country.” Another expressed that “early child education is both a moral imperative and an economic strategy… to help our city grow and thrive.” Addressing concerns that the compensation program, which is funded by a tax on DC’s highest earners, had driven residents from the city, one business leader said these concerns were unfounded.

One business leader described how public funding streams can work together for the benefit of children and families when they simultaneously support child care supply and demand—this is, stabilizing the finances of child care providers while making care more affordable for families. That business leader explained how the compensation program complements the child care subsidy program with their respective supply- and demand-side investments in high-quality, affordable, and accessible care.

A robust child care system supports DC’s business sector

The business leaders we interviewed described how employers consider local child care options for employees when deciding where to locate their businesses. They noted that DC’s high-quality early education programs are a strength. One said, “We know a robust child care system really impacts whether we can attract and retain the right talent.” The same business leader continued, “I do think this city has done a really great job making universal pre-K… and high-quality child care for young children can really help, I think, our city grow and thrive.”

Despite these strengths, affordability arose in several interviews as a systemic challenge facing DC families with young children, child care providers, and the business sector. One business leader reflected, “It used to be that schools would determine whether or not you stayed in the District… [or] flee to the suburbs. Now, child care is sometimes the factor that makes people flee, or determines what neighborhood they go to.”

On the provider side, one interviewee familiar with real estate explained how the high cost of rent can stand in the way of child care expansion: “We know that there’s a need, we have the supply, why aren’t they coming in? I’ve got to think it has to do more with the economics of renting space here on the ground floor in DC, just being way out of line with the revenue that you can generate in DC.”

Business leaders explained that child care is an important factor in ensuring DC stays competitive in attracting new businesses. They noted this was especially true today, amid shifts in the federal workforce and local economy. One business leader explained how, in the past, DC was “really stabilized by the federal government, and so, real traditional economic development practices have not been something in its history—but it is now.” Another business leader suggested that investments in early childhood education and workforce compensation could bolster DC’s ability to attract residents: “A high-quality early childhood education program... will provide long-lasting developmental benefits for young children and enhance workforce participation for working parents and could be a huge difference in retaining and attracting residents.… It could be a difference right now in location decisions.”

Recommendations for strengthening child care in DC

National surveys document how child care challenges cause parents to miss work, turn down promotions, lose wages, and be demoted or fired. ReadyNation estimates that these challenges cost DC $1 billion each year—exactly the size of the budget gap facing the city. One DC business leader suggested that “documenting the need” unmet by the current set of child care investments would help engage the business community in advocating for policies that support a sufficient child care supply. Other business leaders suggested ongoing evaluation to generate data and stories that make the case for supports like the early childhood educator compensation program.

Ultimately, they expressed an interest in strengthening ties between the business sector and the child care community. As one business leader shared, “We’re not communicating enough.”