April V. Taylor
A new analysis of child care costs conducted by the Economic Policy Institute, entitled, “High Quality Child Care Is Out of Reach for Working Families,” has many wondering both how and when childcare became the biggest line item in a families budget. Childcare costs have become so exorbitant that in most states, families are forced to spend more on childcare than they do on rent. In 33 states, childcare is now more expensive than college.
According to U.S. Department of Health and Human Services standards, childcare should account for no more than 10 percent of a family’s budget in order to be considered affordable. The reality uncovered by the analysis is that childcare costs often eat up more than 30 percent of a families budget, more than triple the 10 percent that is considered affordable.
Costs can vary widely, with childcare costs per household coming to just $344 a month in rural South Carolina but ballooning to $1,472 in Washington D.C. due to differences in the cost of living. According to the Bureau of Labor Statistics data, the sky-high costs of childcare are a fairly recent phenomenon, with costs rising 168 percent over the last 25 years. On average, childcare costs annually come to around $18,000 according to a Care.com survey.
The poor are affected disproportionately by steeper childcare costs, with research by the Census Bureau revealing that poor families spend four times the percentage of income that wealthier families do on childcare. As EPI senior economist Elise Gould points out, “How are young parents supposed to be able to afford the equivalent of a college tuition? This is out of reach for many [higher-income] families.”
Nearly 70 percent of parents report that childcare costs have impacted their career decisions, with a quarter of parents reporting that they switched jobs for better family benefits. The high cost is also forcing some women to leave the workforce completely, with the number of mothers who are stay at home moms rising over the last 12 years. Pew Research Center data shows a 6 percent rise in the number of stay at home moms from 1999 to now.
The question now is what can be done. Gould, who helped co-author the EPI analysis, states, “What I hope policymakers realize is that a solution to the child care crisis must be at the scale of the problem.”