If it feels like every spare dollar you earn is funneled into child care, you are in good company. Many studies demonstrate the wide-reaching benefits of early childhood care and education for children, parents, employers, and society at large. Yet, affordable child care remains nearly “as mythical as unicorns,” according to a CNBC article. How bad is it?
On average, parents can expect to spend about $10,000 per child per year on care, but regional variances and infant care can push these figures even higher. The average annual cost of child care in Washington D.C. exceeds $22,000 per child, for instance. Minimal public funding, lagging parental leave laws, and a lack of child care benefits in the workplace only make matters worse.
The Covid-19 pandemic has further complicated child care issues for working parents. According to the Center for American Progress, the cost of providing child care grew 47 percent by September 2020. Billions of dollars in funding have been given to child care providers with goals of returning centers to pre-pandemic operation status, which was already inadequate.
Read on to learn why affordable child care is so critical and how we can do better.
When it comes to child care affordability, the Brookings Institute reports that the United States “ranks dead last” among all developed nations. The Department of Health and Human Services says affordable child care should consume no more than 7 percent of household earnings, but the majority of American families do not even come close to that metric. According to research from Child Care Aware of America, one-third spend at least 20 percent of their income on child care, and one-fifth spend more than 25 percent.
While unaffordable child care is by no means an exclusively low- or even middle-class problem, the poor are disproportionately burdened by soaring costs. According to Brookings, a two-income, two-child family with parents earning 150 percent of the average national wage would put almost 30 percent of its income toward child care. For poorer and single-parent homes, that share can top 50 percent.
The steep cost of child care in the United States is only exacerbated by lagging external support, particularly when compared to allied nations.
According to data from the Organization for Economic Co-operation and Development (OECD), public expenditure on early childhood education and care accounts for less than 0.5 percent of the national GDP, far less than peer nations. France, New Zealand, and the Nordic countries all spend at least 1 percent of their GDPs. Iceland and Sweden spend 1.8 and 1.6 percent, respectively.
Working parents in the U.S. also have less paid parental leave than other nations—in many cases, none—making it difficult to care for very young or sick children at home. A 2019 Pew Research study of 41 industrialized nations concluded that the U.S. was the only country lacking paid parental leave laws. The smallest amount offered by the other nations: two months.
The U.S. Bureau of Labor Statistics reports that no more than 10 percent of U.S. employers offer workers child care benefits like subsidized tuition, on-site daycare or the ability to pay costs using flexible spending accounts.
The repercussions of unaffordable child care are not limited to the family budget. Research suggests early childhood education and child care reform could have broad-ranging benefits on society, such as boosting the economy and slashing social and workplace disparities.
According to Every Child Matters, a non-profit child advocacy organization, “the overwhelming evidence shows that children who enter kindergarten behind are likely to remain behind throughout their educational careers and beyond.” Children who participate in early childhood education programs have higher earnings potential, higher achievement scores, and lower involvement with the criminal justice system.
Affordable early childhood education programs also allow parents to have a better work-life balance, allowing them to pursue their dream and aspirations as well.
A 2016 report by the Economic Policy Institute found that:
“Early childhood care and education would provide high societal returns. American productivity would improve with a better-educated and healthier future workforce, inequality would be immediately reduced as resources to provide quality child care are progressively made available to families with children, and the next generation would benefit from a more level playing field that allows for real equality of opportunity.”
The following are some of the lifelong benefits associated with early childhood education and care. According to the National Education Association, children who attend preschool:
To say a strong early childhood education and child care system is good for society is perhaps insufficient. Here are some of the ways we all stand to benefit from it:
When Covid-19 forced much of the United States into strict lockdowns, many working parents lost their child care as facilities had to close, be it school, preschool, or daycare center. Once the initial lockdowns began to ease, facilities that could open saw reduced capacity, higher expenses for PPE, and potential closures due to positive cases or new state restrictions.
Disproportionately, working families have been negatively affected by the pandemic versus single people or households with no children. Additionally, women have borne the brunt of the lack of child care as the responsibility for taking care of the children has fallen on them.
As previously noted, Nordic and Western European nations tend to go to great lengths to ensure that child care and early childhood education are affordable and accessible to all. Experts agree that investments in young children pay off for kids, parents, and all citizens.
Norway is an excellent example of the economic benefits associated with affordable child care. According to OECD data, Norway is ranked number one globally for worker productivity, as measured by GDP per hour worked.
Sweden’s approach to child care combines basic care and early childhood and hailed by early childhood development experts as the gold standard for effective child care reform.
Various publications rank Denmark among the best countries for working parents. With a preschool participation rate of 97 percent among children aged three to five, it is easy to see why.
Even with all of its potential benefits, child care costs are unlikely to drop overnight. As with all other social or educational services in the United States, affordable child care is a complicated issue—one that calls for a multi-front solution. Here are some of the ways we can do more to make quality early childhood education and child care more accessible to all American families.
The U.S. government spends considerably less on early childhood education and care than its peer nations, even after accounting for varying tax rates. The Brookings Institute suggests the country could expand federal child care spending significantly via the charitable deduction while leaving an estimated $39 billion on the table for other works and reforms. Child Care Aware of America (CCAA) suggests this could be done most effectively by bolstering the Child Care and Development Block Grant (CCDBG) to each state.
Bigger tax deductions for families and centers providing affordable child care would also help. Finally, the government could do more to help families that qualify for child care assistance access those programs: according to the Center for Law and Social Policy (CLASP), only 15 percent of parents eligible for CCDBG funds received them in 2019. CLASP suggests the government should provide better outreach and ensure programs are staffed adequately.
Without a major tax overhaul, there are limits to how far public funding can go to make child care more affordable for American families. Employers, who stand to benefit substantially from improved access, can help bridge the gap by investing in more and better child care benefits for their employees. These might include:
Government child care subsidies and employer-sponsored child care benefits directly target the problem of the high cost of care. However, there are several ways to help families that aren’t directly tied to child care. Government agencies, states, and non-profits can work toward bolstering the social safety net on the whole as a way to reduce families’ costs of raising a child, effectively freeing up more income to pay for child care.
People’s Policy offers several revolutionary ideas, including:
Politicians and employers are unlikely to invest more in early childhood education and child care in the U.S. without pressure from the public. Fortunately, there are several affordable child care advocacy groups working to increase public interest and awareness in the cause. You can get involved by contacting one of the following organizations: