Child-care costs are the rise.
Parents across the country spent $9,000 to $9,600 annually for one child’s day care last year, up roughly 7.5% on the year, according to a national average costs released Monday by Child Care Aware of America. “No matter how you look at the statistics, child care is unaffordable for families across the country,” it said.
The clamp on household budgets is getting tighter, organization data shows. A married couple making the national median income ($87,757) will have to devote 10.6% of their money for child care, up from 10.2% the year before.
‘Parents are in crisis.’ Dionne Dobbins, senior director of research at Child Care Aware of America
Child-care costs smack single parents even harder. Child-care costs can eat up 37% of a single parent’s household income. The U.S. Department of Health and Human Services has recommended child-care costs should account for no more than 7% of family income.
“Parents are in crisis,” Dionne Dobbins, senior director of research at Child Care Aware of America, told MarketWatch. “Unaffordability has remained the same from year to year. We know wages have pretty much remained stagnant.”
The organization cautions national averages are a blunt assessment on costs and note there are all sorts of variables that differentiate many child-care bills. In every region, however, child-care costs are roughly double the price of a year’s tuition to an in-state public university. Child-care costs for one infant and a four-year are cheapest in the South ($17,193 on average) and most expensive in the Northeast ($24,815).
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Child-care workers are paid an average of just $11.42 per hour, according to the Bureau of Labor Statistics, but care centers face many other costs, including rent/mortgage, building and liability insurance, security, staff training, toys and other materials, and utilities. Plus, companies typically keep a low ratio of care giver to children.
Concerns over child-care costs appear to be one unifier in a politically polarized America. The First Five Years Fund, an early childhood advocacy group, found that 80% of people who supported Donald Trump and 79% of Hillary Clinton supporters wanted federal lawmakers to work on early childhood education with the Trump Administration.
The federal budget signed in February earmarks $5.8 billion for the government’s Child Care Development Block Grant; the grant, among other things, subsidizes certain child care. Last year’s budget allotted $4.8 billion, according to the organization.
This is a “step in the right direction,” but more needs to be done to reduce child-care costs, especially at the federal level, Dobbins said. For instance, money for the Child Care Access Means Parents in School program, which supports low-income student parents, program shrank from $25 million to $15 million between 2001 and 2017, the report said.
Companies lose $4.4 billion because of child care-related absenteeism, Child Care Aware of America said, adjusting a 2004 study for inflation.
Some companies have improved their child-care policies. Earlier this month, Starbucks SBUX, -1.51% said it would offer 10 subsidized back-up child care days annually to workers, meant to help staffers who find themselves in a jam when care arrangements fall apart. The company is teaming up with Care.com so that workers can pay a dollar an hour for backup care, or $5 for a day’s stay at in-center child care.
Challenger, Gray & Christmas, an executive recruiting firm, said the perk one example of companies pitching in on child-care and family-leave issues to attract and keep workers in a tight labor market.
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