Child Care Costs 'Untenable For Families' In NJ

NEW JERSEY — Parents in New Jersey with young children are spending enormous amounts of their income on child care, according to a new report that calls prices “untenable for families,” even for those who live in areas where rates are lower.

Around the nation in 2018, median yearly child care prices ranged from $4,810 to $15,417, depending on provider type, children's age and the county population size, according to the National Database of Childcare Prices. Adjusted for inflation, that equals between $5,357 and $17,171 in 2022 dollars — 8 to 19.3 percent of family income per child.

The Women’s Bureau of the U.S. Department of Labor, which developed the database, concludes that current child care prices are untenable across all care types and age groups.

Cape May County faces the greatest income-adjusted burden for early child care in New Jersey, according to the data. County residents spent 17.4 percent of the median family income on infant center-based care (estimated price of $15,239) and 16 percent on toddler center-based care (estimated cost of $14,022).

Gloucester and Salem County residents spent the least of their earnings on infant-based care, but that still requires 10 percent of median family earnings — $11,466 in Gloucester County and $9,409 in Salem County.

Also:

• Child care prices were consistently higher for infant care, with the median price for one child in center-based infant care ranging from $7,461 ($8,310 in 2022 dollars) in small counties to $15,417 ($17,171 in 2022 dollars) in very large counties.
• Among home-based providers, infant care ranged from $5,824 ($6,486 in 2022 dollars) in small counties to $9,892 ($11,018 in 2022 dollars) in very large counties.
• Among preschool-aged children, center-based prices per child ranged from $6,239 ($6,949 in 2022 dollars) in small counties to $11,050 ($12,307 in 2022 dollars) in very large counties.
• Home-based child care prices ranged from $5,541 ($6,171 in 2022 dollars) in small counties to $9,019 ($10,045 in 2022 dollars) in very large counties.

The burden is even higher for families with multiple children in before- and after-school care or center-based child care. The analysis showed 29 percent of families with children under 6 have two or more in that age-group.

High child care costs are keeping some families — especially women — out of the labor market, the Women’s Bureau report noted.

The analysis found that even a 10 percent increase in child care costs causes a 1 percentage point decrease in moms in the workforce. A 50 percent increase dropped the number of employed mothers by 2 percentage points, and in counties where child care costs more than doubled, maternal employment dropped 4 percentage points.

On average, counties with higher wages for women did have a higher number of working moms, the report said, but the higher pay didn’t fully compensate for a reduction in maternal employment associated with higher child care costs.

The Women’s Bureau report said the current funding system — relying primarily on overburdened families and underpaid child care workers, who earn a median of $13.22 an hour and are twice as likely as workers in other sectors to live below the poverty line — contributes to substantial employee turnover that leads to an inadequate supply of affordable child care.

The report said asking providers, who spend between 60 percent and 80 percent of their operating budgets on wages, is unfeasible. Yet families can’t pay more, either, “meaning the childcare sector needs substantial government investment to function adequately and eventually prosper,” the report said.

Compared with other high-wage countries, the U.S. government spends little on early child care and education, ranking 35th among Organisation for Economic Co-opertion and Development, or OECD, nations for spending on early care and education of children ages 0-5 — less than $500 per child.