Over Half Of Parents Expect To Pay At Least 20% Of Their Income On Child Care
Childcare costs are already through the roof, and there’s no sign that prices will drop anytime soon.
Childcare costs are already through the roof, and there’s no sign that prices will drop anytime soon. A new report from Care.com found that rates for everything from nannies to afterschool care have increased significantly since the beginning of the Covid pandemic.
Care.com’s ninth annual Cost of Care report sheds light on the financial lengths families go to to ensure their children have appropriate care during working hours, and the sacrifices parents make to afford that care.
Care.com found that 72% of families spend at least 10% of their income on child care, exceeding the U.S. Department of Health and Human Services (DHHS) affordability threshold of 7%, and 51% of parents say they expect to pay at least 20% for care.
Since 2019, weekly nanny rates have increased a staggering 23%, childcare centers have gone up by 5%, family care centers or in-home care centers have increased by 10%, and afterschool care costs have risen by 7%. That is when parents can find care at all.
While 5% over two years may not seem like a huge jump, these increases are occurring during a time of unprecedented inflation, stagnant wages, skyrocketing housing costs, and an economy on the brink.
It should come as no surprise then that 59% of parents are more concerned about the financial impact of childcare than they were in previous years, 21% plan to leave or have left the workforce entirely in order to care for their children, and many said they would not grow their families because they cannot afford care for additional children.
The report did find that parents are budgeting for child care, and 65% say they will not have to surpass their budgeted amount, but to continue to make ends meet while staying within their budgets, families are making some significant sacrifices.
Fifty-one percent of parents say they’re cutting back on vacations or travel, 51% are decreasing leisure activities, 45% say they’re trimming their food budgets, 41% are cutting their family clothing budgets, and 37% say they’re reducing the number of extracurricular activities their children participate in all in order to afford care for their children while they work.
The cost of care also has parents rethinking their career decisions. Thirty-one percent of parents are considering taking on a second job, 26% are cutting their work hours in order to provide care themselves, and 25% are changing jobs to find more child care-friendly employers.
The U.S. is not an economically-friendly place for parents right now, and the burgeoning childcare crisis is only adding to the pressure. Student loans that have been in federal forbearance since early in the pandemic are due to begin repayment this summer, almost four million children have lapsed back into poverty since the end of the Expanded Child Tax Credit program in December, and costs for essential goods like diapers and staple foods are higher than ever. Coupled with the national baby formula shortage, it’s incredible that American parents are making it work at all.