Affordable childcare could pump billions into the economy.
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A new analysis from the Department of Labor illustrates just how stark the childcare crisis is.
Childcare is unaffordable almost everywhere in the US, and it’s particularly expensive for low-income parents.
Federal legislation to help subsidize childcare and pay workers more has failed to pass.
If childcare bills give you pause, you’re not alone: A new government analysis shows that childcare is unaffordable almost everywhere across the country, and single parents and parents below the poverty line are particularly impacted.
Families are putting, at minimum, 8% of their incomes toward childcare costs, according to a Department of Labor report from the US Women’s Bureau.
“Across care settings and children’s age groups, childcare prices were significantly higher in larger counties,” the issue brief stated.
For families with one school-age child, home-based childcare costs a median of 8.0% of that family’s income in counties with populations between 1 to 99,999 and 9.9% for very large counties with populations of at least 1,000,000. Similarly, for infant center-based childcare, the shares are 12.3% for small counties with a population of 1 to 99,999 and 19.3% for very large counties.
In 2018, the year with the most recent data available on childcare costs, median prices ranged from $5,357 in 2022 dollars for school-age home-based care in counties with populations between 1 to 99,999, to $17,171 in 2022 dollars for infant center-based care in counties with a population of at least 1,000,000.
“Childcare prices are untenable for families across all care types, age groups, and county population sizes,” the report said.
County-level data for infant center-based prices and family income in the new resource, the National Database of Childcare Prices, shows that families in some counties are spending a much higher share of their income on this kind of childcare. The following map shows that the median infant center-based price, in 2018 dollars, as a share of median family income can vary drastically — from 2.4% in Mercer County, Missouri, to 47.0% in Bronx County, New York, based on available data.
The researchers also noted that there’s a direct relationship between the cost of childcare and employment rates among mothers. The issue brief stated that a “10% increase in median childcare prices was associated with 1 percentage-point lower county-level maternal employment rates.” And in counties where childcare is twice as expensive as the median, maternal employment rates were 4 percentage points lower.
“High childcare prices and minimal public childcare investments are especially detrimental to employment among mothers with lower wages, as childcare affordability is out of reach,” the researchers wrote. “When families move to states with more expensive child care, mothers are less likely to remain employed, even if they move to a state with higher wages.”
And childcare is getting more expensive year after year. Childcare costs have outpaced inflation during the pandemic, according to one recent report, and the lion’s share of childcare duties have fallen on women during the pandemic, causing them to leave the workforce en masse. The labor force level for women plunged early on in the pandemic, BLS data shows, although many have since returned.
That’s not translating to higher wages for childcare workers, who have told Insider how low pay and stressful working conditions are pushing them out of a field that they love. Childcare workers made a mean hourly wage of $13.31 as of 2021, with the bottom 10% earning about $9 an hour.
That pay creates a precarious cycle, with centers losing staff over low pay, and, in turn, being able to offer even less childcare.
Childcare costs are particularly prohibitive for low-income families
Households under the poverty line spent nearly a third of their income on childcare, the report stated, and single-parent households can often spend even more than that. That’s as childcare workers are more than twice as likely to live below the poverty line as those in other industries.
“The current funding system, therefore, is reliant primarily on overburdened families and underpaid childcare workers, contributing to substantial turnover and lack of adequate childcare supply,” the researchers concluded.
The research draws from pre-pandemic data, but federal data from 2020 onwards shows that COVID had an adverse effect on many low and middle-income families. Almost one-in-five middle-income families received unemployment benefits in 2020, for instance, Pew Research Center found.
And it underscores that government intervention was crucial for millions of children — one Census Bureau analysis showed that President Joe Biden’s Child Tax Credit helped lift children out of poverty, and put food on the table for many of them. Many parents put those checks towards childcare and school-related expenses.
Payments were given out between July 2021 and December 2021, and when they stopped, many families struggled to make ends meet.
The Women’s Bureau researchers suggest that this type of intervention is necessary to enable mothers to work.
“Research shows that mothers living in states with more expensive child care and less generous subsidies and publicly-funded childcare programs are less likely to be employed after having children,” they wrote.
There are government interventions that could help reduce care costs and sustain higher salaries for teachers. New Mexico, for instance, will now earmark $150 million annually for early childhood education.
But while the Biden administration has pushed for similar federal interventions, legislation like the Build Back Better Act — which would’ve increased parents’ earnings by $48 billion — never moved forward, leaving states and parents to fend for themselves.
Is childcare too expensive for you? Are you struggling with childcare costs? We want to hear from you. Email these reporters at jkaplan@insider.com, jlalljee@insider.com, and mhoff@insider.com.