If you think the rent is too damn high, wait until you get the bill for child care.
Parents with two kids in a child care center paid on average at least twice as much for that care as they did for the typical rent in 11 states and the District of Columbia last year, according to Child Care Aware of America’s latest annual report, released Wednesday. The states are: Illinois, Indiana, Iowa, Kansas, Massachusetts, Minnesota, Nebraska, Pennsylvania, Rhode Island, Vermont and Wisconsin.
Placing two kids at a child care center cost at least 25% more than the typical rent, on average, in every state in the US. And the tab exceeded annual typical mortgage payments in 45 states, plus the District of Columbia, according to Child Care Aware. The report looked at care for an infant and 4-year-old.
The report also shows that child care continues to be a major financial burden for many parents, though it has stabilized somewhat since the Covid-19 pandemic upended the industry in 2020, forcing many providers to close their doors or jack up their prices to retain their workers and maintain a safe environment.
Nationwide, the average annual cost of care rose to $11,582 per child last year, up 3.7% from the prior year. It was the smallest annual increase since the pandemic began and trailed inflation.
Still, it would take 10% of a married couple’s median income and 32% of a single parent’s median income to afford that national average price tag, though the cost varies widely by state and locality, according to the report. The US Department of Health and Human Services recommends that families spend no more than 7% of their annual income on child care.
The number of licensed child care centers inched up 1.3% to around 92,800 last year, according to the report, which contained data from 41 states. It had fallen as low as 88,200 in 2020 but is back to pre-pandemic levels – though that’s still not enough to meet demand, said Sandra Bishop, Child Care Aware’s senior director of research.
Further exacerbating the shortage was the continued disappearance of licensed child care providers who operate out of their homes. The number slipped to about 92,200 providers in the 39 states that had available data. Though the rate of decline has slowed, the supply is still down from just over 107,000 providers in 2019. These businesses are often more challenging to run since the owners typically watch the children alone or with a small staff.
This year could prove even more troubling for the child care industry. Some $24 billion in federal pandemic stabilization grants – which kept many centers afloat – expired last September, which is expected to result in tens of thousands of closures, according to an analysis by The Century Foundation. Also, another $15 billion federal pandemic infusion for child care and development block grants, which states use to subsidize child care for working families, will expire this coming September.
“Many states are doing a lot to invest in their child care systems, but it is hard to do it at the scale of those critical investments that happened as a part of our relief funding,” said Anne Hedgepeth, Child Care Aware’s chief of policy.