Child care is more expensive than rent for the average American family.
According to a new report from the nonprofit Child Care Aware of America, the cost of two children in child care exceeds average rent payments by at least 25% nationwide and is more than double in eight states and Washington, DC. The most expensive state relative to rents is Vermont, where care for two children costs $35,016 versus an average rent of $13,788, the report showed.
Child care costs are a growing financial burden for American families, which typically have about two children. It now accounts for about 10% of a married couple’s income, the report said, despite the US government’s recommendation that child care costs shouldn’t exceed 7% of a family’s income. The average price for one child in care in the US was $11,582 last year, a 3.7% increase from the previous year, the report said.
The rising cost of child care in America has continued to hit record highs, squeezing parents who are struggling to save money and even forcing some to take second jobs to make ends meet. In a January speech, Treasury Secretary Janet Yellen said that a lack of access to affordable care is one reason it’s “still too hard to be a working parent” in the US.
In addition to child care expenses, household finances are under stress from persistent inflation and a relentless increase in house prices. Rents grew faster than wages in about half of major US metro areas last year, according to a report from StreetEasy. The increased cost of living for almost every household expense only adds to the burden on American families, said CCAoA's chief executive officer Susan Gale Perry.
“If housing costs and child care costs are both incredibly high, that leaves very little for other things that families need and want to buy for their children, for themselves, for their healthcare expenses and other portions of their budget,” she said. As a result, parents often feel like they need to leave the workforce to provide care themselves or rely on a piecemeal network of grandparents and other caregivers because child care is simply too expensive.
This year is set to be even harder for parents. In September last year, $24 billion in federal funding that had kept hundreds of thousands of child care centers open during the pandemic ran out. More than 3 million children may lose access to care with thousands of programs set to close due to the so-called child care cliff, according to an estimate by the Century Foundation last year.
