Not long after the 2016 election, Shelby McGowan got a somber phone call from her brother.
“I’m so sorry,” he said.
She replied: “About what?”
“About your childcare expenses.”
Just a few weeks earlier, Washington state voters had approved a statewide ballot initiative to raise the state’s minimum wage to $13.50 over four years. The measure was supported by voters who pictured a better quality of life for thousands of retail and food service workers. But few considered the economics of the daycare industry, which pays some of the lowest wages of any industry. Tuition at Advent Lutheran Child Center, the Spokane Valley daycare center where McGowan’s two children were enrolled, was about to go up by as much as $300 a month per family.
And just like that, the entire state became the laboratory for a real-time experiment in the consequences of rising daycare costs. Washington state is a dramatic case, but not a total outlier. The cost of childcare and the cost as a share of families’ incomes have risen across the country for decades. Today, roughly one in four families spend more than 10% of their income on childcare, including more than half of families below the poverty line and two out of five families earning twice the poverty level.
That’s if they can find licensed childcare at all. This summer, researchers at the Center for American Progress (CAP), a progressive thinktank, analyzed census data in 22 states and found that 51% of the population resides in “childcare deserts”. In those neighborhoods, the number of children under age five outnumber available daycare slots more than three to one.
In response to this reality, countless families rely on relatives, unlicensed daycare, or schedules arranged so parents can trade off as caretakers. And study after study shows the burden falling more heavily on mothers, said Rasheed Malik, a policy analyst for the Center for American Progress. It’s women who are more likely to leave the workforce after becoming parents, often never to work full-time again.
According to a recent comparison of policies across two dozen countries, it was access to affordable, reliable childcare, not flexible hours or new parent leave, that played the biggest role in closing the gender wage gap and ensuring that new mothers could remain in the workforce.
At Advent in Washington state, the range of reactions varied. Some parents pulled their children out of its daycare program right away. Others, said Heidi Perry, who runs the daycare program, cut back on their hours at work in order to be home for their children. In some cases, children stayed home alone after school at a younger age that they might have otherwise.
McGowan and her husband scaled back on contributions to their health savings account, their 401(k)s, and college savings plans. Dining out and family trips became non-starters. Friends quietly shopped for cheaper childcare options and left the program.
“One day, I looked at the coat hooks, and some of the names were gone,” McGowan said.
Perry ackowledged: “It’s a lot of money before you even account for the minimum wage increase … For some families, it became too much, and it was hard for us to see that.”
In most other advanced economies, parents don’t pay for childcare by themselves but share the cost with the government, their employers, or labor unions. That’s usually not the case in the US, where in 2011, a typical two-income family paid more than twice their share of income toward childcare compared with families in other countries that belong to the Organization for Economic Co-operation and Development.
While some state and federal programs subsidize daycare, they have failed to keep childcare costs low for a majority of US families, Malik said. Existing policies, such as the childcare tax credit and flex spending accounts for daycare, disproportionately benefit parents who can afford childcare up front and pay substantial taxes. Proposals to extend help to more families have repeatedly died in Congress.
What’s a family to do?
One thing McGowan and her husband didn’t cut back on: their hours at work. McGowan made too much money to work less. By contrast, “it didn’t pencil” for her husband to keep working, but he wouldn’t feel comfortable giving up his job.
“It’s those ingrained gender roles,” she said. “At least for him, he feels like he’s not contributing to the family if he’s not working.”
She and her husband shopped for other options, but the very few centers that had openings for both their children didn’t impress them. Besides, she said, price shopping for her children’s welfare was difficult for her – and she wasn’t alone.
Another parent, Chris McJimsey, felt no choice but to keep his son enrolled at Advent because he has developmental needs other daycare centers didn’t seem equipped to handle.
“It was a big hit,” McJimsey said. “We’re a good, dual income household, but when you’re talking about $2,000, $2,500 extra a year, you’re definitely having to figure out where that money’s coming from.”One reason the impact was so profound is that childcare has historically been an exceptionally poorly paid profession. According to the University of California, Berkeley’s Center for the Study of Child Care Employment, the median hourly wage for childcare workers is $9.77. When the center ranked scores of occupations by earnings, childcare workers landed in the second-lowest percentile.
“Most childcare workers would not be able to even afford the care they’re providing,” said Malik. The nature of the industry, he explained, is that a daycare center can charge more than college tuition, funnel most of that money toward labor, and still pay those providing care less than some fast-food workers. “You can’t scale and you can’t cut back, because the quality often comes from the ratio of children to providers.”
On 1 January, the minimum wage rose again in Washington, to $11.50 an hour, and in 2020, it will make its last scheduled increase, to $13.50. Perry wonders how many families aren’t going to be able to afford the resulting costs without any additional help.
“I know it’s a lot of money,” she said. “And eventually, some parents aren’t going to be able to pay it.”