Why Is Child Care So Expensive?
By Jen Lindbeck
When you consider having children or find out you are pregnant, there are financial considerations that are made. How much is this kid going to cost me? Maybe you break that budget down in to things like medical care, food and clothing, and college tuition. Perhaps you have started to put funds aside for college – 18 years goes by in a flash, right?
What about child care costs? Not many parents plan 18 years in advance for the cost of infant care. Here is the reality: Infant care costs are almost double the average state university tuition.
Perhaps it does not come as a surprise that the birthrate in the US is at an all-time low, according to the CDC. In fact, the Morning Consult for The New York Times conducted a survey of over 1800 men and women and found that 64% sited the costs of child care as their reason for not having children or having fewer children.
Ever wondered why child care is so expensive? Me too!
First, teacher to child ratios limit the growth of child care centers. Typically, the ratios are 1:4 for infants (1–11 months), with a maximum group size of eight, 1:7 for toddlers (12–29 months), with a maximum group size of 14; and 1:10 for preschool-age children (30 months through 6 years) with a maximum group size of 20. Higher enrollment means more teachers.
Staffing costs are the biggest expenditure in running a child care or preschool. That doesn’t mean the infant teacher at your child’s school is driving a Mercedes. According to the 2018 State of Children & Families Report, the average annual salary for a child care professional in Skagit County is just over $26k. To put that in to perspective, in 2015, per capita personal income in Skagit County was $44,470 and Skagit County’s personal income is well below the state average of $51,818. It is safe to say, that even with specialized training and a degree, your child’s teacher is not making piles of money, let alone making what is arguably their worth.
Second, facility costs drive tuition costs. The center location needs to be easily accessible to parents and convenient to their commute which means that your child’s school is likely located in a higher rent area, unless it is a licensed home day care. Both center locations and home day cares must comply with a host of requirements to be a licensed facility including outdoor space, sinks for hand-washing, bathrooms, and space for food preparation, just to name a few.
For example, the center I taught in went from a licensed half day site to a full day site and there was a long list of improvements that we were required to meet including replacing our carpet with water-impervious flooring, installing lights above doors designating them as exits, replacing door knobs, and the list goes on. Take it a step further and if a center chooses to be a part of Early Achievers, environment plays a significant part in the rating system and comes with associated costs.
Finally, there are insurance costs, employee training, materials, food, utilities and marketing. It all costs money. Startup costs for a licensed child care center, average between $30,000 – 50,000, with an additional $300-500 per child for items like playground equipment, furniture, toys and other supplies.
According to Forbes:
“Once your center is up and running, payroll to meet mandated staff-to-child ratios is your largest line item, gobbling roughly 70% of sales… Then come the rent and property taxes, eating another 15% of sales; meals and supplies, 4%; insurance, 3%; and maintenance, 2%. With some luck, able operators might clock 5% pretax operating margins, assuming decent occupancy rates.”
It isn’t just a bummer to pay for child care, it is a bit of a bummer trying to establish a successful and profitable business as well.
There is no immediate quick fix to this complex issue, but there is hope. Watch the United Way website for future blog posts and articles for creative alternatives to child care as well as early learning opportunities that can take place in the home to ensure your little one is set up to succeed in school.
Jen Lindbeck has a M.Ed., Early Childhood Education, Curriculum and Instruction from Arizona State University and is the Early Learning Resource Coordinator for United Way of Skagit County.