Childcare costs are outpacing inflation – the average cost of infant daycare now exceeds state college tuition
With inflation at its highest level in 40 years, families are feeling the pinch of higher prices at the grocery checkout, on their home heating bills and when paying rent.
But there’s another expense that’s grown even faster in recent years: childcare. Growth in child care prices exceeded the annual rate of inflation in 2020 and 2019, according to a new report of Child Care Aware.
The average annual cost of child care for infants reached just over $12,300 in 2020, an increase of $1,000 from the previous year. (The report used three different methods to calculate average prices ranging from $12,304 to $12,375.)
Inflation, which measures how quickly prices rise over time, hit 7.5% in January, meaning households are spending about $250 more per month on goods and services than in 2019, when inflation was around 2.1%.
Meanwhile, over the past three decades, child care costs have risen faster than other basic family expenses, including housing and groceries, and incomes have not kept pace, according to a separate report by the First Five Years Fund, a group advocating for affordable child care.
“Since 1990, child care costs have risen 214%, according to analysis of the Bureau of Labor Statistics (BLS) Consumer Price Index, while average family income has risen 143% “, says the report of the First Five Years Fund.
In three out of four regions in the United States, the annual cost of child care for an infant exceeds the cost of housing, according to the Child Care Aware report. (The West is the only region where child care does not cost more than housing.)
In all four regions, the annual price of child care is higher than the annual cost of in-state tuition at a four-year public university. (Public tuition in the state ranges from $9,702 in the south to $13,878 in the northeast.)
Both Child Care Aware and First Five Years Fund support increased government funding for early childhood education, including President Joe Biden’s Build Back Better proposal, which is currently stalled in Congress.
““Prices for a service like child care should be understood in the context of household income, by state and by regions within states.””
The authors of the Child Care Aware report noted that examining the national average price of child care does not necessarily paint an accurate picture of “the extent to which child care is unaffordable for families across the country. “. They wrote, “Prices for a service like child care should be understood in the context of household income, by state, and by regions within states.”
Another important piece of context is the toll the COVID-19 pandemic has taken on child care centers, many of which are facing staffing shortages. The median salary for caregivers who work at these centers was $12.24 per hour or $25,460 per year in 2020, the most recent year for which data was available from the Bureau of Labor Statistics.
There is a vicious circle in the current child care system, says the First Five Years Fund.
“Ultimately, the existing structure of the U.S. child care market itself is unsustainable and is what leads to low wages for early childhood educators,” FFYF wrote in a statement. December 2021 Reportt. “Childcare is an expensive and labour-intensive service. Yet providers can only charge what families in their area can afford to pay, so wages stay low to keep the company solvent.