Call to Action: Affordable Child Care in the U.S.

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 and parents but also 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 variance 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.

Read on to learn why affordable child care is so critical, and how we can do better.

The Bottom Line: Child Care Costs in the United States

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 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.

Why is U.S. Child Care So Expensive?

The steep cost of child care in the United States is only exacerbated by lagging external support, particularly when compared to allied nations. The numbers:

Low government funding. 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.

Little to no paid leave. 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 2016 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 50 nations: two months.

Minimal workplace support. 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.

Why It Matters: The Benefits of Early Child Care

In the words of Sweducare, Sweden’s official child care system and a gold standard in early childhood education worldwide, “It is a fact that preschool for young children will lead to benefits for the child, the family, and the society.” Unlike the United States, Sweden considers child care and education inseparable—and essential.

Knowledge and “educare”—education and care—are only the beginning, notes the nation. Educare is also about “health and living conditions, integration, reduced exclusion, demographics, gender, family life, and career” and it facilitates economic growth. This sentiment is not high-minded idealism: research time and time again has supported the broad-reaching benefits of affordable and well-structured child care.

How Kids Benefit from Affordable Child Care

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:

  • Learn essential socialization, cooperation, and conflict resolution skills in a safe environment
  • Exhibit stronger social, physical and mental development over their lifetimes
  • Have higher cognitive test scores, from toddlerhood to the age of 21
  • Demonstrate stronger academic achievement in math and literacy, compared to children who did not attend preschool
  • Are more likely to attend four-year colleges

How the Economy Benefits from Affordable Child Care

Employers who invest in child care benefits for their employees stand to gain just as much as children. According to Forbes and Child Care Aware of America:

  • Businesses lose up to $4.4 billion annually in productivity due to child care-related absenteeism among workers.
  • Child care benefits attract keener talent: more than 60 percent of millennial workers say child care is a significant factor in a job offer.
  • Investments in early childhood education nurture a more prepared future workforce.
  • Lack of affordable child care disproportionately affects women, who are more likely to miss work or drop out of the workforce to care for children. Closing this gender gap could add $12 trillion to the GDP by 2025.

How Society Benefits from Affordable Child Care

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:

  • According to Art Rolnick, director of research of the Federal Reserve Bank of Minneapolis, preschool can offer a 12 percent annual return, after inflation.
  • Children who attend high-quality preschools and child care centers earn an average of $143,000 more over their lifetimes than children who do not.
  • Mothers of children enrolled in child care earn about $133,000 more over their lifetimes.
  • School districts can save an average of $11,000 per child due to a reduced need for remedial education.
  • Affordable child care minimizes economic, racial, and gender-related achievement gaps.

Role-Models: Countries That Get Child Care Right

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

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.

Facts about Norwegian child care

According to the Irish Times and the Norwegian government:

  • Norway heavily subsidizes public child care.
  • Norwegian parents receive a child care benefit covering an average of 64 percent of documented care-related expenses.
  • All Norwegian children are guaranteed a spot in daycare from the age of one.
  • Daycares in Norway offer extended hours for working parents, though a shorter average workday means most can pick up their children by 3:30 in the afternoon.
  • Norway tightly regulated its child care system to ensure it is equitable and meets steep quality standards.
  • Norwegian parents get 46 weeks of parental leave, at full pay, following the birth or adoption of a child. They can alternately accept 56 weeks of leave, though at a rate of 80 percent of their usual salaries.

Sweden

Sweden’s Sweducare—an approach to child care that combines basic care and early childhood education—is hailed by early childhood development experts as the gold standard for effective child care reform.

Facts About Swedish Child Care

According to the Sydney Morning Herald and The New York Times:

  • Swedish localities are obligated to provide preschool to all children from the age of one.
  • Child care fees in Sweden are proportional to parental income, inversely proportional to the number of children in a family and capped at a monthly maximum. According to the OECD, on average, child care accounts for just 4 percent of Swedish families’ annual earnings.
  • Swedish children receive 525 hours of child care each year for free regardless of parental earnings or work status.
  • A full 94 percent of Swedish children between the age of three and five benefit from preschool.
  • Preschools in Sweden offer extended hours to accommodate parents who work nights or weekends.
  • Early childhood education professionals in Sweden are well trained and educated.
  • Sweden established a national, play-based preschool curriculum in 1998, updated in 2010.
  • Sweducare is credited with providing one of the highest female employment rates in the world and with alleviating child poverty.
  • Swedish parental leave laws provide 480 days of leave for each child, insured at 80 percent of parental income.

Denmark

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.

Facts about Danish Child Care

According to the BBC, The Guardian, and the Danish government:

  • Danish municipalities are required to pay about 75 percent of child care costs for all local children, regardless of parental earnings and employment status. Remaining fees are fixed and financial assistance is available to families in need.
  • The rules that regulate daycare costs in Denmark also apply to private care in the home.
  • Danish municipalities must guarantee access to child care for all local children between the age of one and six.
  • About 97 percent of Danish children go to daycare, including members of the royal family.
  • Danish parents share 52 weeks of paid parental leave following the birth or adoption of a child.
  • Sixty percent of Danish day care staff have at least a bachelor’s degree in early childhood education.
  • Affordable child care is credited with one of the highest female employment rates in the world. In government, 40 percent of Danish MPs are now women.

How to Make Child Care More Affordable in the U.S.

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.

Better Government Funding and Outreach

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 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 Economic Policy Institute, only 11 percent of parents eligible for CCDBG funds received them in 2016. CCAA suggests the government should provide better outreach and ensure programs are staffed adequately.

Stronger Employer Child Care Benefits

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:

  • Child care subsidies, either directly or through partnerships with area child care centers to reduce fees
  • The ability to use flexible spending accounts for child care expenses
  • On-site child care centers
  • Flexible schedules or telecommuting options
  • Generous paid parental leave
  • A network of backup child care options for parents in a pinch

Advocate for Affordable Child Care in Your Community

Politicians and employers are unlikely to invest more in early childhood education and child care in the U.S. if there is little public demand. 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:

Aimee Hosler
Aimee Hosler
Writer

Aimee Hosler is a long-time journalist specializing in education and technology. She is an advocate for experiential learning among all ages and serves as the director of communications for a non-profit community makerspace. She holds a degree in journalism from California Polytechnic State University in San Luis Obispo.

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