Tuesday, December 22, 2015

Think Tank Tuesday 12/22: Cost of Childcare Skyrockets, Number of Who Can Afford It Plummets

A recent study has determined that increases in the cost of childcare has in some states surpassed the cost of college tuition:

[Key findings include:
  • Child care costs account for a significant portion of family budgets.
    • EPI’s basic family budget threshold for a two-parent, two-child family ranges from $49,114 (Morristown, Tennessee) to $106,493 (Washington, D.C.). In the median family budget area for this family type (Des Moines, Iowa), a two-parent, two-child family needs $63,741 to attain a modest yet adequate standard of living.
    • Across regions and family types, child care costs account for the greatest variability in family budgets. Monthly child care costs for a household with one child (a 4-year-old) range from $344 in rural South Carolina to $1,472 in Washington, D.C.
    • As a share of total family budgets, center-based child care for single-parent families with two children (ages 4 and 8) ranges from 11.7 percent in New Orleans to 33.7 percent in Buffalo, New York.
    • Among families with two children (a 4-year-old and an 8-year-old), child care costs exceed rent in 500 out of 618 family budget areas. For two-child families, child care costs range from about half as much as rent in San Francisco to nearly three times rent in Binghamton, New York.
  • Child care is particularly unaffordable for minimum-wage workers.
    • The high cost of child care means that a full-time, full-year minimum-wage worker with one child falls far below the family budget threshold in all 618 family budget areas—even after adjusting for higher state and city minimum wages.
    • Among families with young children, child care costs constitute a large share of annual earnings for families living off one full-time, full-year minimum-wage income. For example, to meet the demands of infant care costs for a year, a minimum-wage worker in Hawaii—the state with the median state minimum wage ($7.75)—would have to devote his or her entire earnings from working full time (40 hours a week) from January until September.
  • Other salient benchmarks highlight the extremely high costs of child care.
    • In 33 states and the District of Columbia, infant care costs exceed the average cost of in-state college tuition at public 4-year institutions.
    • In terms of child care costs’ share of total family budgets, only in a handful of EPI’s 618 family budget areas are child care costs close to the 10 percent affordability threshold established by the Department of Health and Human Services (HHS).
    • Child care costs are particularly high for younger children. When 10 family budgets in various areas are reconstructed to include two-parent, two-child families with an infant and a 4-year-old (instead of a 4-year-old and an 8-year-old), child care ranges from 19.3 percent to 28.7 percent of total family budgets. This compares with a range of 11.8 percent to 21.6 percent for families with a 4-year-old and an 8-year-old.
    • In these 10 areas, child care costs for an infant and a 4-year-old constitute between approximately 20 percent and 31 percent of median family income—far above the HHS’s 10 percent affordability standard.source
Read more here!

What are your thoughts? Do you think the hike in childcare costs will curb the number of children born to middle class households or will these hikes force would-be parents to be more resourceful and find other means of reliable low cost childcare (family members, babysitters, etc.)?

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