Dive Brief:
- More than a month’s rent — that’s the price of child care for many U.S. families, forcing parents with young children to spend a significant portion of their income on child care, the U.S. Department of Labor’s National Database of Childcare Prices (NDCP) showed as of Nov. 19.
- Nationwide, families spend between 8.9% and 16% of their median income for full-day care for one child, the NDCP said; in 2022, annual prices for full-day care ranged from $6,552 to $15,600, according to database findings. To put this in perspective, the median cost of a year’s rent was $15,216 in 2022, DOL pointed out in a blog.
- “The fact that the median cost of center-based infant care is more than the median cost of rent should be of urgent concern,” Wendy Chun-Hoon, director of the DOL’s Women’s Bureau, which sponsors the NDCP, stated in a DOL announcement. “Families are struggling, and women are disproportionately impacted,” Chun-Hoon said.
Dive Insight:
A study that just barely preceded the COVID-19 outbreak highlights why the issue is concerning: The scarcity of affordable child care benefits in the U.S. workplace can cause employees to perform worse at their jobs, cut their hours or even leave altogether, a January 2020 report from B2B services platform Clutch found.
Everyone pays the toll. The nation’s dearth of reliable and quality infant and toddler child care costs working parents, employers and taxpayers $122 billion annually in lost earnings, productivity and revenue, according to a February 2023 report from business leader group ReadyNation.
On the other hand, when companies provide child care benefits for their employees, they’re rewarded with a 425% return on their investment, including higher retention, a recent case study by working parent advocacy group Moms First and Boston Consulting Group found.
The Moms First study focused on companies that offered benefits beyond the standard paid parent leave, dependent care flexible saving accounts and employee assistance programs. For example, a retailer that provides monthly stipends of $1,000 was able to retain a long-time store manager who, due to the cost of child care, considered leaving after becoming pregnant with twins. With access to the stipend, she decided to stay.
Child care prices can vary dramatically based on three factors: the child’s age, the size of the population in the county where the care is provided, and whether the care is center- or home-based, the DOL blog explained. Home-based preschool care in small counties is the least expensive type of full-day care, while center-based infant care in large, typically densely populated or urban counties is the most expensive, according to the data.
For instance, in Bucks County, PA, which has a population of more than 645,000 and where women make up about 79% of the labor force participation, the estimated median yearly price for center-based infant care in 2024 is $16,745, up from $15,100 in 2022, a DOL interactive map showed.
In Bucks County, the cost of child care makes up 11.6% of the median family income, according to the NDCP data.
By comparison, in Dickey County, ND, with a population of about 5,000 and where women make up 84% of the labor force participation, center-based infant care in 2024 is estimated at $11,709, up from $10,558 in 2022, comprising almost 12% of the median family income.
But in the heart of the Midwest — Logan County, KS, with a population of 2,752 and where women represent 82% of the labor force participation — the median yearly price of center-based infant care in 2024 is estimated to be $5,513, up from $4,971 in 2022, making up about 6% of the median family income, according to the NDCP.
Prices for center-based day care for infants demand the highest share of median family income in Stearns County, MN; Bronx County, NY: Plute County, UT; Essex County, VT; Grays Harbor and Wahkiakum Counties in WA; and Guanica County, PR, the NDCP found.
However, child care prices are high relative to family income in nearly every county for which data was available, potentially pricing many families out of paid child care, the DOL said.
The NDCP data covers 48 states, the District of Columbia and Puerto Rico from 2019 through 2022 and builds on the initial release of the NDCP that included data from 2008 through 2018, according to the DOL.