$20,145. It’s not a downpayment on a house, the price of an SUV, or the cost of college tuition. It’s the average amount that parents in Massachusetts paid last year to put one infant in daycare. In California, that figure is $16,542. In Minnesota, $15,704. And, according to a new report from Child Care Aware of America, the cost of child care in the United States is only going to increase. Child care now averages $10,408 ($9,649, if you include home child care) nationwide, up almost nine percent from the previous year.
Child Care Aware’s 12th-annual report on the state of child care costs, US and the High Cost of Child Care: A Review of Prices and Proposed Solutions for a Broken System, was released today and provided yet another sobering reality for working parents struggling to afford the high costs of child care. According to the new data, 11 million kids younger than age five are currently in some type of child care and the costs now eat up 10.6 percent of the average family’s household income, despite government recommendations that it consumes less than seven percent of their budgets. For single parents, the numbers are even more depressing ⏤ they’re dedicating 37 percent of their annual income to daycare.
In three of four regions of the country, it now costs more to pay for daycare than it does to pay the rent or mortgage ⏤ in only the ‘West’ do housing costs narrowly edge out the child-care bill. And in more than half the country, a parent will pay less this year to send their kid to college than they will to a full-time child-care center, as annual costs exceed the in-state tuition at 28 public universities.
As for the most and least expensive states, the report ranks states based not on total child-care costs but on affordability ⏤ how much it costs related to median income. So while Massachusetts residents pay the most on average per year for infant care at $20,415, they’re second to California in overall affordability ⏤ where a married couple drops 18.6 percent of their median $88,730 income on care. Oregon, Colorado, and Minnesota round out the top five for least affordable states for infant care, although the report also breaks down states by toddlers, pre-school, and after-school care, as well as by child-care center and family care.
The big surprise in this year’s report was Nebraska’s jump into the top 5 in several categories, including the least affordable states for family-based infant and toddler care, as well as pre-school centers. According to the new numbers, Nebraskans are spending a whopping 14.6 percent of their annual $85,405 median income keeping a toddler in family care. Meanwhile, Wyoming topped the list of most expensive states for before- or after-school care. There, it runs $7,017 a year and consumes 10.8 percent of family income.
In terms of why child care remains so expensive, the reasons are myriad and range from centers paying high rent to be in more convenient locations to the expensive cost of staffing due to government regulated teacher-to-child ratios. In fact, Child Care Aware of America and the Center for the Study of Child Care Employment recently released a fascinating video that breaks down how parents’ fees are allocated to keep a center in business. It also reveals a giant flaw in the economics of child care: Tuition alone can’t cover expenses, overhead, and pay staff a livable wage ⏤ the numbers simply don’t add up. You can watch it here.