Making Work Work with Affordable Childcare

Parenting is hard. It is the most amazing, rewarding experience I have ever had. But it’s also really hard. My little dudes need their parents to feed them, clean them and take care of every other need in their lives. They also need us to entertain them, read them, play with them. And the messes.  Let’s not forget about cleaning up their messes. 

Not only do they need us to cook, clean, entertain and generally keep them from doing something catastrophic for the 12-14 hours a day they are awake, they also need us to pay all of their expenses. Food, diapers, wipes, books, toys, clothes (which they will either ruin the first time they wear or  outgrow within three months), housing, healthcare, entertainment. It adds up. For most of us, the need to pay those expenses means we need to work and, for most families, both parents need to work to get by. That, of course, adds another major expense. 

Childcare is hard to come by, with 60% of Californians living in childcare deserts. After our oldest son was born, we struggled to find a high quality, even remotely affordable option that did not require a six month or even year long waitlist. We’re not alone, half of American parents report having difficulty or being unable to find childcare and, not surprisingly, it is particularly difficult for parents with financial challenges.

But most of all, childcare is expensive. For most families, it is simply unaffordable. In 2017, Childcare Aware found that the average cost of childcare in California was $16,542 annually, well beyond HHS guidelines for affordability for nearly all families. EPI estimates that just 28.5% of California families can afford childcare. Moreover, childcare cost is the top reason parents have fewer children than they would ideally like and the top financial reason others choose not to have children at all. As a result, 2018 saw a record low birthrate. 

As a result, for many families, most of the earnings of a second working parent will go to taxes and childcare, bringing home only an extra few thousand dollars a year. To help illustrate this reality, I developed an interactive calculator (click on the image to pull up the interactive). By adjusting the variables (household income, price of childcare, number of children) you can compare earnings to childcare expenses to see how much a family would have to earn to break even after paying for childcare: 

In the example provided as a default, the second working parent needs to earn nearly $40,000 to just break-even after paying for childcare and taxes. At a $40,000 income, that parent brings home a net of just $1.52 per hour. Now do not get me wrong — that $250 a month is critical for many families who are struggling to get by – but it also amounts to just 1/8 of California’s minimum wage.

Perhaps this example seems exaggerated to some. $1,200 per child per month does sound expensive. Yet nationwide, the average childcare provider costs more than $1,200 per month and this is just a fraction of what families pay in California. Does $40,000 income and $50,000 for the spouse seem high? That is 25% more than California’s median household. The reality is these default setting are relatively conservative. While data on childcare is notoriously bad, it is very likely most families with young children experience a more challenging financial reality than this.

Worse yet, the alternative often keeps women out of the workforce, limiting their families’ economic potential. It also expands the gender pay gap as those women lose important years developing skills and earning experience in their careers. By losing their productivity, it slows economic growth. Childcare also improves parents’ perceptions of their children’s wellbeing, their own wellbeing and relationships with their children, improves brain development and school readiness and could help end poverty.

As important as childcare is it is also expensive. It is expensive because it is labor intensive. There is no way to get around it. For example:

California’s requires childcare centers to maintain a certain ratio of kids to staff, as low as 1 to 4, depending on the child’s age. To employ one minimum-wage earning provider for 10 hours a day costs $850 per child per month, assuming a 1 to 4 provider-to-child ratio. That does not account for any other provider expenses like the cost of the facility, utilities, insurance, food, supplies, cleaning, overhead expenses, etc, all of which drive tuition fees much higher.

Understanding the real costs involved, it is clear our options are limited. I do not think anyone is arguing for lowering the minimum standards for caring for our children. Similarly, few think that the minimum wage is too high (and many would argue childcare providers are paid too little).

I’m proud that some of the people working hardest to help families pay these bills are friends and fellow Hornets and I’m hopeful leadership here in Sacramento can start to improve the situation. Councilmember Eric Guerra has been advocating forcefully, with his young son Javi in tow. Last night, thanks to his leadership, the council voted to hire a childcare czar to work towards solutions locally. Assemblymember Kevin McCarty’s AB123 recently passed the Assembly and would expand pre-K to cover more 3 and 4 year olds. (And, of course, nationally, nearly every serious presidential candidate has a major childcare proposal … here’s hoping!)

Today funding childcare is largely left to young parents, adding another major expense for young parents, doing their best to make ends meet in an economy that has been unkind to their generation. I don’t think that approach really squares with any of our values — whether we profess to care most about the well-being of children, opportunity for the working class or strengthening the nuclear family — subsidized or free childcare is at the heart of strengthening families, supporting children and making work work for families in every strata of society.