Diana Ramos works in the frozen meat locker of a local market in Stamford, Texas, where she’s on her feet moving around in the cold five days a week. A single mother, Ramos’s job, taking meat in and out of the freezer, allows her to feed her two children and put some savings in the bank. But arranging childcare for her kids while she’s helping customers with their meat purchases has been a thorny problem.
“It’s been a struggle to make the decision to find the best place for my children to go because I barely make above minimum wage,” Ramos said.
For a while, Ramos received childcare from a friend she was unable to pay and people affiliated with her church. Looking for a long-term solution, she placed her three-year-old son in Our Loving Village, one of only two licensed childcare providers in her rural Texas town. To make it work, Ramos participated in a program that trained and licensed her so she could volunteer at the facility for two four-hour shifts each week, receiving in exchange a tuition discount of up to $160 off the weekly $200 tuition. Then in July, a fire shut down Our Loving Village.
Childcare struggles are common across the nation, as working parents at different income levels find it nearly impossible to afford childcare. With the sharp rise of childcare costs alongside general inflation, studies increasingly show affordable childcare is untenable for many families.
As a result, parents are often forced into impossible daily decisions as they try to balance their salaries with childcare expenses, and they contemplate whether to quit work or change jobs. Parents, experts and advocates say choosing between jobs and taking care of kids is as complicated as ever and could become more challenging because of a looming child-care cliff that is projected to see federal funding for childcare plunge.
MarketWatch has built a tool that uses data from the Department of Labor to show the average cost of childcare by county, how that compares to median family income and your income, and what a family needs to earn in order to fit within the recommended spending amount suggested by the Department of Labor. Based on data from 2018, the calculator adjusts the cost of childcare to 2022 inflation levels, so it’s important to note that the calculator is based on data before the pandemic. In order to offer a comprehensive comparison of median family income by county, the latest data available from the Census for all counties is from the 2020 Census. The cost of childcare as a percentage of median family income is adjusted for 2020 inflation.
A Department of Health and Human Services program suggested in 2016 that affordable childcare should make up 7% of a family’s income, a figure that seems increasingly out of reach for most Americans. According to Child Care Aware of America, a nonprofit that advocates for affordable childcare, married couples with children that earn the national median income spent 10% of their income, or $10,853, on childcare in 2022, while single parents allocated about 33% of their income. HHS did not respond to MarketWatch’s request for comment.
Parents and childcare experts said childcare expenses continued to be one of the top expenses in households, if not the biggest one. For many, the monthly costs to send children to daycare or find ways to take care of them can exceed monthly mortgage payments. Adding it up, paying for childcare can be just as expensive as tuition for an in-state college, only families are paying for childcare for much longer.
Read: Would you pay $2,000 a month for child care? These parents reached breaking point: ‘That’s more than our mortgage’
The cost of childcare impacts parental decisions on whether or not to work or not, especially for mothers. Counties that have more expensive childcare prices also have lower rates of maternal employment, according to the Department of Labor. Even for those earning higher salaries, parents say schedule flexibility and the ability to work remotely can determine if they can afford childcare. These decisions are further complicated by health insurance being linked to employment.
“Some of the things that we see parents evaluate, it is not just financial but what is the gain to their children,” said Brandi Britton, Global Executive Director of Contract Finance and Accounting at recruiting firm Robert Half. “Are they able to offer them potentially a better life circumstance?”
Many women would prefer to work even if their jobs did not improve their family’s financial situation, simply because of how they see their values and identity, Britton said. “They would not feel fulfilled without the component of work,” she added.
Anne Hedgepeth, chief of policy and advocacy at Child Care Aware of America, agreed that decisions about work and childcare do not boil down exclusively to dollars and cents. It’s not as simple as comparing a price to a salary, she added.
“I would push back on the idea that there is a tipping point for families or for the majority of families,” Hedgepeth told MarketWatch. “Often it’s about making childcare work so that they can be wage earners.”
That means looking for all kinds of solutions, whether it’s finding full-time early learning opportunities in home-based or center-based providers, or filling in childcare gaps with family, friends and neighbors, she said.
A fire and the looming childcare cliff
America has a childcare supply problem. Nationally, about 3.6 million kids that needed care could not find an available spot in 2021, according to Child Care Aware analysis in 2021. In West Virginia alone, about 26,408 children under 6 years old could not access childcare in May 2023, according to the organization’s Mapping the Gap tool.
The presumption behind America’s working families is that they are able to juggle working with affording childcare. But, as Hedgepeth points out, parents are not always able to even find childcare.
Generally, there are two types of licensed childcare available to parents: Daycare homes that care for small groups of mixed-age children in residential buildings, and daycare centers that cater to larger groups of kids and provide a more structured curriculum.
Most of the time, families in rural areas are more likely to use home-based care rather than daycare centers, according to the Center for American Progress, a left-leaning think tank based in Washington D.C. A 2018 report from the center found families in rural areas face the most challenges in finding licensed childcare, with three to five rural communities lacking adequate childcare supply.
Providing childcare is an expensive, labor-intensive business. During the pandemic, many childcare providers closed or paused providing the service because of high operational expenses and low revenue. As labor costs have risen since the pandemic, childcare providers are facing mounting costs together with a struggle to find workers.
Now, a childcare cliff is adding to the pressure. On September 30, more than 70,000 childcare programs are projected to close with the expiration of the American Rescue Plan, according to a recent report from the Century Foundation, a left-leaning think tank based in New York. The federal stabilization funds have been supporting more than a third of those programs during the pandemic and the authors said approximately 3.2 million children could lose their childcare spots as a result.
If parents are forced to leave work and provide childcare, the disruption could also impact their child’s well-being. “Children benefit from their parents’ economic stability. Family income impacts children’s cognitive development, physical health, and social and behavioral development because it is connected not only to parents’ ability to invest in goods and services that further child development, but also to the stress and anxiety parents can suffer when faced with financial difficulty, which in turn can have an adverse effect on their children,” the authors wrote in the report.
BriTanya Brown, founder and owner-operator of Our Loving Village, told MarketWatch that she relied on many funding sources to keep her childcare facility open, including Texas’ Child Care Expansion Initiative, and Child Care Stabilization Grants, which was part of the American Rescue Plan approved in 2021.
Brown tried to stay creative to offer affordable care to the parents in the town. If parents didn’t have enough money, they could reduce the cost of the daycare by $10 to $20 for each one-hour chore they picked up, such as donating unused items from a federal nutrition program for low-income women and children under five or sanitizing toys or washing dishes. Brown also started the Village Care Share program, which gave Ramos a chance to send her son there while working at the meat locker.
Many parents in the town live paycheck-to-paycheck and struggle to afford childcare, Brown said. That means sometime during the week, a parent asks if they could take their child home early, so they can use the reimbursement to pay for bills that are due. A single mother of two herself, Brown sometimes would inevitably become a personal-finance counselor. She helped parents determine if they should apply to public nutrition assistance programs, such as Supplemental Nutrition Assistance Program (SNAP); if they could be eligible for some other kind of waivers or monthly benefits to cut down on costs; and in the case of Ramos, how to ask her boss for a pay raise.
The July fire that destroyed the building that housed Our Loving Village has sent parents who depended on the daycare scrambling. The reason for the fire was still unknown. Although no one was at the site or hurt when the fire broke out, Brown had to close down the care home and does not think it’s practical to open it again in the near term, especially with the reduction in federal funding that is about to take place. A GoFundMe donation site was set up to help out with the loss and potentially, maybe the recovery of Our Loving Village one day.
Brown said she tried to stay positive but she was tired.
“I’m mentally, emotionally, spiritually and physically burned out of trying to make a way and trying to create a safe place for children to exist and every turn it seems like no one else cares,” Brown said.
“It’s not worth it anymore,” Brown said. “We have a passion, but it shouldn’t be at the cost and burden of ourselves.”
Read the full article here
