It’s official: childcare is more expensive than college
In information that will come as no surprise at all to parents who pay for daycare, a new study confirms that childcare costs more than college in most states.
Sorry to be the bearer of such depressing news.
According to a report from The Care Index, the cost of infant care is higher than the cost of college tuition in a whopping 33 states: $9,589 a year for daycare compared to $9,410 for college. The statistics are the result of a joint initiative between The Care Index and Washington think tank New America.
The numbers provide several other upsetting pieces of information about American families and the cost of childcare. For a family with the median household income cited by the study, one-fifth of that income goes toward childcare. For a minimum wage-earner, that number is two-thirds.
In most states, childcare cost is a full 85% of the median cost of rent. In some states, it’s even more. With numbers like that, is it any wonder so many women decide not to go back to work? It’s often makes no financial sense when considering the cost of day care. And if a couple has more than one child, the decision becomes even more obvious. It’s simply not worth the bother to work when that much of a household’s income is going to daycare.
This isn’t to say that childcare isn’t worth its exorbitant fees — considering the costs daycare centers and in-home care providers incur with insurance, paying their staff and bills, buying new toys and educational materials — it’s hardly a shock that the price is so high. The problem is American families being unable to afford it because wages simply don’t match and there are few options for defraying the cost for middle and lower class parents.
Fortune cites a statistic from New America that claims “the average American woman taking a five-year break from her career starting at age 26 will lose out on $467,000 in income, wage growth, and retirement assets and benefits over her lifetime.” Considering those numbers, taking a break from work to stay home and raise children ends up costing 10 times more than the yearly cost of childcare.
I went back to work when my older child was three because that kind of thinking scared me — the idea of losing my footing in the professional world the longer I stayed at home drove me to find a job even though my earnings at first hardly covered the cost of childcare for two small children. I worked almost at a loss for the first year when the costs of my commute and new work clothes were added up along with the daycare bill. I remember doing our taxes after the first full year of daycare payments and the software kept asking if we were “sure” that $21,000 in childcare costs was accurate because compared to our income, it was completely ridiculous.
And this is why so many American families are simply stuck. Stuck between several not-ideal options including part-time work that doesn’t pay as well in order to accommodate children, or no job at all. There is no simple solution to this problem, but it is a problem. Whether it’s government subsidies or better childcare tax credits, families need help making this work.
We can certainly do better.