Your childcare should not cost more than 7 percent of your annual income, according to both state and federal standards. The reality looks quite different. On average, childcare prices range between 8 percent and 19.3 percent of median family income per child.
The rising costs of childcare is largely impacting moms. Many moms are unable to return to the workplace without flexible work options or on-site childcare. There is a critical need to fully fund child care in the U.S., but there’s a lot of work that needs to be done to get there.
Candace Yates, the vice president of Equity & Early Childhood Programs at Think Small, is adamant about affordable child care. As a family of five that was well below the median paid income, 18 years ago, she and her husband paid more than 50 percent of their income for child care.
“That was with a staff discount and an in-house scholarship,” she told 21Ninety. “This is why we must advocate for affordable child care and pay equity for early childhood educators.”
Navigating Childcare Costs
For 19 years, Yates worked in early childhood education, and during the first decade of that time, she and her husband started a family. Their three children all attended the child care program where Yates worked.
Although Yates won an in-house scholarship and received a staff discount, the cost of child care was still upwards of 30 percent of their combined income. She and her husband sacrificed to keep their children in a high-quality, early childhood program.
“This directly impacted our ability to save money and plan financially for the future,” she explained. “Even as a dual-income household and our children enrolled in a subsidized child care assistance program, we faced these challenges.”
What Is Fully-Funded Childcare?
Simply put, fully-funded child care in the U.S. means that families don’t have to pay more than 7 percent of their annual gross income toward child care. This is regardless of their income and household makeup.
“With fully-funded childcare, families would have the freedom to choose an early childhood program that meets their needs,” Yates said. “That is without having to sacrifice quality and safety for convenience and affordability.”
Fully-funded child care also means child care programs are able to pay their staff more than a livable wage, but a professional wage. Today, even though most early childhood programs are open year-round and for longer hours daily, there is a huge difference in salary when comparing early childhood (birth to age 5) educators and K-12 educators.
“Early childhood educators are some of the least paid professionals,” she added.
Fully-funded child care also looks like culturally affirming, trauma-sensitive and developmentally appropriate care for all children. A child’s address should not determine the quality of care they receive.
The Benefits of Fully-Funded Childcare
Yates firmly believes that fully-funded childcare will positively impact families, specifically Black families. While childcare affordability is an issue in all communities, the greater the wealth gap, the greater the challenge in affordability.
“For Black families, fully-funded child care has a direct relationship with eliminating the wealth gap,” she said. “Families would be able to redirect tens of thousands of dollars to other areas like college savings, health savings, debt elimination, retirement savings and investments.”
Fully-funded child care isn’t just about the financial benefits. It is also about the positive health outcomes that happen when families can afford to live healthier lifestyles and pay for specialized care and life insurance.
Barriers to Affordable Childcare
As the cost of doing business increases, childcare programs must increase their rates. For childcare staff, food costs, utilities, lease/mortgage costs and insurance rates are steadily rising
“To sustain business, these rising costs have to be absorbed somewhere,” Yates said. “At the same time, we are not seeing the average salary for early childhood educators increase.”
This leads to high rates of turnover, which can result in classrooms or entire programs closing if there aren’t enough people to meet licensing requirements for ratios. This vicious cycle requires outside intervention in the form of national and local legislation. Some states do provide programs that aim to support families with childcare costs.
In Minnesota, where Yates is based, some families may qualify for childcare assistance or early learning scholarships to help pay for care. Minnesota leaders also passed a law that creates a “sliding scale” approach where families, regardless of income, pay no more than 7 percent of their annual income toward child care.
Advice for Families
There is no easy solution for the childcare crisis that many families are facing. Yates offered suggestions for families who are struggling:
- Explore Subsidies for Childcare Expenses
Sometimes, families think they won’t qualify, and don’t apply. Do your research! Find out income eligibility guidelines in your area. - Talk to Your Employer
Ask your employer if they offer a pre-tax dependent care benefit. - Research Childcare Program Scholarships
Some childcare programs offer private scholarships. Other community-based organizations may provide scholarships to families participating in their programming. - Share Your Story With State Leaders
Many elected officials don’t hear from their constituents. What you see as a critical issue may not be known to them or may not be at the top of their list. Call, write, and visit them if you can and share your story. Invite others to do the same.