The high cost of childcare in America is driving women out of the workforce and contributing to childhood poverty. Can America catch up to the developed world?
Julia Smith, a public defender in a major city in the northeast, has made every major life decision over the last few years based on the cost of childcare.
When she and her husband, who works as a carpenter, decided to have a baby, they realized that their salaries would not cover the cost of daycare, which came to more than a thousand dollars a month. So Smith quit her job in state government to work at a corporate law firm, where she would earn more money even though the work was less fulfilling to her. (She’s asked to use a pseudonym to speak openly without any fear of career repercussions.) “Getting a higher-paying job was absolutely part of my family planning process,” she tells me. “I had to quit a job that I loved to have enough money to pay for my daughter’s daycare.”
Now that her daughter is three years old, she’s decided to go back to her dream job as a public servant. These days, after paying off their mortgage, student loans, and daycare, the family is left with $250 a month in savings. “There’s no doubt in my mind that if we made more money I would already have another baby by now,” she says. “But we just can’t afford it. We’re looking for any opportunity to cut down on costs so that we can put more towards our savings.”
Working Women Without a Working Childcare System
In most industrialized nations, an attorney and a carpenter would not feel crippled by the cost of childcare. But in America, the skyrocketing cost of childcare is just one of the harsh realities of parenthood.
As of 2018, it costs $31,000 more (adjusted for inflation) to raise a child from infancy to the age of 18 than it did in 1960. Between 1985 and 2011 alone, the cost of childcare went up by 70 percent, even though wages barely grew. Given that the cost of food, diapers, transportation, and housing has either gone down or stayed the same, this increase largely comes down to the ballooning cost of paying for other people to look after our children.
This was the exact same period in which women began entering the workforce in far greater numbers. Between 1962 and 2000, women’s labor force participation increased from 37 to 61 percent, leading to an estimated $2 trillion in economic gains. But in a disconcerting twist, women’s workforce participation actually started declining between 2000 to 2016, dipping from 60.7 to 57.2 percent. Pew Research suggests that the rising cost of childcare is likely responsible for the increase in stay-at-home moms over the last decades.
Entering the workforce was an important tool of empowerment to women, giving them access to independence and wealth, but the rising cost of childcare has undermined this progress. Some businesses have recognized this problem, and tried to address the lack of affordable childcare with their own solutions. Many also see this as a way to retain female employees and cut down on the cost of onboarding new employees.
Campbell’s Soup, for instance, offers subsidized daycare at its Camden, New Jersey headquarters for infants through kindergarten. Fox has a childcare center on the studio lot. In most cases, companies tend to only offer this benefit at corporate headquarters, which only helps those at the very top of the company’s hierarchy, rather than the people at the very bottom, who really need it. Patagonia is an exception. The company has offered childcare to employees at its Ventura, California, head offices since it launched 35 years ago, but it has recently extended the same service to employees at its Reno, Nevada, distribution center as well.
But companies that offer childcare are still very rare. For the majority of women, including Smith, the cost of childcare will result in making many career compromises and raise the question of whether it is even worth staying in the workforce at all. “I consider myself lucky, because I could switch from public service to working in a private law firm,” Smith says. “But I’ve had so many friends who have had to quit their jobs because they cannot afford to pay for daycare. But it is so much harder to return to the workforce later on, and when you consider the decrease in lifetime earnings, the consequences of dropping out of the workforce add up.”
The Rising Costs of Raising a Child
It’s not entirely clear why childcare costs keep increasing. There’s some evidence that while the cost of daycare has gone up across all income brackets, it has risen significantly more for the wealthiest of Americans, who are spending more on premium childcare services. This means having highly qualified caregivers watching their children around the clock, to accommodate their work schedules, and allow them to thrive in their careers. These well-heeled parents also tend to be acutely aware that early childhood education lays the groundwork for doing well later in life, so they are willing to spend money on facilities that give their kids all the educational and developmental advantages possible. In many ways, this is widening the gap between the richest and poorest Americans.
But even among middle and lower income families, the cost of childcare is going up steadily. Public policy experts believe that in the past, many low-income mothers would run home-based childcare centers where they would look after their own children along with others, to make a little money and save on their own childcare costs. However, in the early 1990s, the government launched a range of childcare programs to help the very poorest Americans, such as the state-administered program Head Start or the Child Care and Development Fund which offers subsidies for daycare. As a result, poor women who would otherwise provide childcare facilities in their homes began seeking higher paying work outside the home. These public programs have certainly helped women in the lowest income brackets, and help several million children a year attend daycare.
But these policy changes may have harmed lower-middle-class Americans. The emergence of these state-run programs also dovetails with increased regulations surrounding daycare, which improves the quality of daycare facilities, but also increases the costs. As a result, those just above the poverty line find themselves particularly squeezed. There are many families who earn too much to qualify for subsidized care, but find it very expensive to send their children to more expensive daycare centers.
The first blows come right after the childbirth. The United States is the only country in the developed world that does not guarantee a woman paid maternity leave after her baby is born. But the next big hurdle comes when she tries to go back to work. At $9,589 a year per child, the average cost of daycare is higher than the average cost of in-state college tuition. American couples spend roughly a quarter of their income on childcare, while single parents devote 52.7 percent of their salary on childcare. Compare this to other developed countries, like Portugal, Sweden, and Austria, where couples spend less than 5 percent of their income on childcare, or France and Germany, where they spend less than 10 percent.
Everybody loses when childcare is unaffordable to many families. But women are particularly hard hit. Even though 70 percent of mothers with children under the age of 18 participate in the workforce, data shows that women disproportionately shoulder the burden of childcare. This means that many mothers are running themselves ragged, trying to earn money to support their families while also spending a lot of their time changing diapers, sterilizing milk bottles, waking up at night to feed their babies, and many other labor-intensive tasks. And single mothers, who constitute a quarter of households in the country, suffer most of all, since they need to find a way to pay for childcare on their salary (which also happens to be 80 percent of what their male counterparts make for the same work). This is one reason that America has one of the highest rates of maternal and childhood poverty of any industrialized country and why a large proportion of children in this country are food insecure and the rate of maternal death is rising.
Poor parents who can’t afford to send their kids to licensed childcare facilities, and don’t have family members who can step in, may have to rely on the thousands of illegal, unlicensed daycare centers across the country. While some of these centers certainly provide good care, many are death traps for children. The infant death rate is seven times higher in home-care settings than in regulated daycare facilities. Thousands of children have died over the years in facilities where caregivers have not gone through background checks and don’t abide by proper standards when it came to food safety or hazards like steep stairs, easily accessible radiators, and swimming pools.
And to make things worse, there’s a shortage of licensed childcare throughout the country. Researchers from the Center for American Progress have found that in 22 states, 51 percent of the population live in what has been called “childcare deserts,” neighborhoods where the number of children under the age of five outnumbers available daycare slots by more than three to one. This reality drives many women to leave the workforce to look after their children. But those women are relatively lucky: Many others simply cannot afford not to work, so they will have to search out unlicensed, potentially dangerous facilities.
It Doesn’t Have to Be This Way
American parents have come to accept that being overworked and handing over a huge chunk of their paycheck to a childcare provider just comes with the territory with having children. But it doesn’t have to be this way.
Other countries use taxes to fund or subsidize the cost of childcare under the assumption that societies benefit when children have access to high-quality, low-cost care and parents–particularly mothers–should be able to return to the workforce without worrying about their children. State-sponsored childcare levels the playing field by ensuring that all children, regardless of their family’s income, receive a good early childhood education, which has been shown to lay the groundwork for a lifetime of learning, reduce crime, and generate billions of dollars in economic benefits to the state.
Consider how parenthood unfolds in many other European countries. In France, the government has made daycare available to citizens since 1848. These days, when a new mother returns to work after her 16 weeks of paid maternity leave, the family can apply to send their infant to a state-run crèche in their neighborhood, where they will pay only what they can afford based on a sliding scale. Trained childcare professionals will feed, diaper, and cuddle these infants while their parents are at work, and introduce them to developmentally appropriate activities as they grow into toddlers.
In Germany, women can take up to three years of paid maternity leave. While the country has also had public daycare for more than a century but over time, some facilities became overcrowded and parents who applied for spots were turned down. In recent years, new laws have ensured that all parents have equal access to it. In 2013, the government passed a law guaranteeing every child over the age of one a spot in a public daycare facility. And in 2016, a parent who cannot get access to one of these centers can sue the government for lost wages.
These countries have been continually evolving their childcare policies to keep up with changing gender norms, as more women began to work outside of the home. Here in America, citizens already accept that K-12 education is a public good, provided by the government through taxpayer dollars. Extending this into daycare and early childhood education would go a long way to help relieve the burden on working parents, and enable more women to stay in the workforce.
Progressive lawmakers have proposed policies that do this. In 2011, for instance, Vermont Senator Bernie Sanders created the Foundations for Success Act to that would provide all children from six weeks old until kindergarten access to full-time, high-quality early care and education, solving the means-testing problem of earlier programs that squeeze lower-income parents. But its chances of passing in the current Congress are slim.
Until America finds a way to make childcare more affordable, the prospect of having children will become increasingly more unpalatable to young people who are getting married and thinking about starting families. A growing proportion of Americans are choosing not to have children at all or, like Smith, deciding to have fewer children than they desire, because they simply cannot afford it. In a recent survey, 64 percent said that the astronomical cost of childcare had forced them to have fewer children than they would like.
But even with one child, Smith finds herself feeling crushed by the burden of childcare costs most days. “It’s a constant source of stress for our family,” Smith tells me. “I can’t even imagine what it is like for families with even fewer resources.”
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