Price Wars - The Cost of Child Care

Parents and child care providers seldom agree on the cost of child care. Some parents think they pay too much. Caregivers think they are underpaid.

It is an unfortunate fact that daycare is expensive, costing the average family approximately 20%
of their yearly income. Not an easy pill to swallow.

That cost is low, however, compared to the paucity of wages child care providers earn. It is these low wages plus a lack of benefits that, unbeknownst to parents, actually helps to subsidize their child care fees. According to Current Data on Child Care Salaries and Benefits in the U.S., a report by the Center for Child Care Workforce, and You Bet I Care Report 1: A Canada-Wide Study on Wages, Working Conditions, and Practices in Child Care Centres from the University of Guelph, child care ranks among the 15 lowest paid jobs. Average salaries are only one-half the national median. Those who earned higher wages include service station attendants, tree trimmers, and food servers.

That translates into a mean hourly wage for child care teaching staff of only $7.42 per hour in the U.S., and $10.92 per hour in Canada, a fact that makes it difficult for many to remain in the profession, says the Child Care Action Campaign in their Information Guide 27, Wages and Benefits in Child Care. The turnover rate for daycare workers ranks as one of the highest.

The High Cost of Staff Turnover


"High turnover erodes the quality of care", notes the C.C.A.C. "Children need continuity in order to form trusting and loving bonds with their teachers and caregivers. But constant turnover makes that almost impossible."

Indeed, high staff turnover has been associated with poor developmental outcomes for children. In their statement, Why Child Care Matters, Preparing Young Children for a More Productive America, the Committee for Economic Development (C.E.D.), says that even with the increased cost of "providing care of a constant quality ... providers are hesitant to raise fees beyond what they believe parents are willing or able to pay." In essence, keeping labor costs low is the only way providers feel they can keep fees down.

Are Current Parent Fees Enough?

Do current parents' fees cover the true cost of child care? Not really. In fact, C.E.D.'s statement points out that what parents pay covers only a fraction of child care's full production cost. "Numerous subsidies, including financial and in-kind (for example, the common use of churches or community facilities for nonprofit centers), masks true production costs ..."

Factors affecting the cost of child care include:

* location;
* type of setting and program;
* age of the children (infants and toddlers generally cost more);
* the amount of funding a center is able to procure through various sources such as fundraising efforts and government sponsored programs; and
* the use of voluntary services.

Cost of Child Care for Parents

And just as child care providers and centres have to struggle, child care fees are also a major burden to working parents. On average, parents spend $4,000 to $6,000 per year on child care for one child, and in some cities the cost is as high as $10,000, notes the Children's Defense Fund in their publication, The High Cost of Child Care Puts Quality Care Out of Reach for Many Families. "Given the high costs of child care," the CDF says, "parents can easily spend more in a year on child care than they would on public college tuition." In fact, the costs in some cities for a four year old to attend child care is twice what it costs for college tuition.

As governments across North America scale back their subsidy programs while increasing back to work legislation for welfare recipients, families facing high child care costs have few places to turn for assistance. Even where families meet the income guidelines for support, the amount of subsidy available often leave them little choice, after limiting their budget in other places, but to choose lower end child care and placing their child(ren) at risk. The result is often detrimental to the parent's work abilities as well. Where child care is inadequate, parent's are less productive on the job, need to take take time off to deal with child care issues, or have to quit work all together when their child care arrangements fall apart.

"Neither parents nor child care providers can solve the challenge of high child care costs on their own," concludes the CDF. "The federal government, states, local communities, and the private sector must all play a larger role in helping families afford quality child care."

If there is a positive note to be made of the costs of child care, it is that despite the low wages, caregivers are dedicated to the children they serve. Most believe they can make a difference, that they can greatly enhance the quality of a child's life in daycare. One would be hard-pressed to put a price tag on that.