Rising Child Care Costs Are ‘Untenable For Families’: Report

ACROSS AMERICA — Parents with young children are spending a A growing share 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.

A new National Database of Childcare Prices offers the most comprehensive look yet at how child care costs vary across 2,360 counties in 47 states. The Women’s Bureau of the Department of Labor, which released the report this week, said that without more government investment, the child care system is on the verge of collapse and is what the Treasury Department refers to as a “failed market.”

“All across the country, families are facing burdensome childcare expenses. The last few years have highlighted the tension parents experience when they need to go to work to provide for their families, but have difficulty doing so if they can’t access affordable child care,” Women’s Bureau Director Wendy Chun-Hoon said in a news release.

The report uses the latest data on child care costs from 2018, adjusted for inflation to 2022 dollars. It shows that nationally, child care prices ranged from $4,810 ($5,357 in 2022 dollars) for school-age home-based care in small counties to $15,417 ($17,171 in 2022 dollars) for infant center-based care in very large counties. The cost of child care represents between 8-19.3 percent of median family income per child, according to the report.

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.

Chun-Hoon said the data is valuable to policymakers as they measure the potential economic impacts of child care affordability and economic security for women.

“It will give policymakers and advocacy organizations a tool to combine county-level childcare prices with local employment and economic indicators,” Chun-Hoon said. “By doing so, we can understand better the needs of working families and the impacts of a lack of affordable, accessible care infrastructure in their communities.”