The New Childcare Crisis: Affordability

Virginia Child Care Costs as a Percentage of Women’s Median Earnings, 2009-2017. Gray line: Infant center costs. Blue: line: four-year-old center costs. Source: National Women’s Law Center

by James A. Bacon

The cost of full-time infant care in Virginia has increased by 37% in inflation-adjusted dollars between 2008 and 2017, while women’s wages in the state have grown by only 5%, finds a new report by the National Women’s Law Center, “From Shortchanged to Empowered: A Pathway to Improving Women’s Well-Being in Virginia.” As a percentage of income, the cost of infant-center care has surged from 24% of women’s median earnings to 31%.

The study suffers from the usual victimhood rhetoric regarding women’s income — asserting that Virginia women earn only 80.9% of what men earn without adjusting for occupations, education and length of time in the workforce — which makes me wonder if the child-care data is similarly subject to tendentious analysis. With that caveat in mind, there does appear to be a problem, and it’s one that is especially devastating for poor women who see an ever large share of their income consumed by child care.

What the study doesn’t do is inquire into why the cost of child care has risen so precipitously in the past decade. For that information, we must turn to Adele Uphaus-Conner with the Free Lance-Star who, while dutifully and uncritically reporting the study’s findings, actually went out and interviewed someone in the community who knew something about the topic!

Home-based child care is usually cheaper than center-based care, but the number of home-based providers is dwindling, Carol Clark, executive director of Smart Beginnings Rapphannock Area, told Uphaus-Conner. Why would that be? She cited restrictions by Homeowners Associations and licensing requirements.

Clark said the high cost of child care is driven by staffing ratios required for certification. Child care providers are required to employ one caregiver for every four children between the ages of birth and 16 months. For toddlers ages 16 to 20 months, the staffing ratio is five children to one caregiver.

And because many people in the Fredericksburg area commute to Washington and Northern Virginia for work, local day care centers often must be open up to 14 hours a day, from 5 a.m. to 7 p.m.

“There is a lot of cost involved,” Clark said. “People who open preschools, even with full day care, often won’t provide infant or toddler care. If they do, that’s a break-even if a program is lucky, and usually it’s a financial loss. Basically they are providing a service to the community.”

Let me refresh peoples’ memories. In 2014 the Washington Post and other media created an uproar over toddler deaths and injuries in “unregulated” daycare settings. More than 60 children had died in childcare settings over the previous 10 years, an average of 6 per year. The General Assembly predictably tightened staffing and licensing requirements, which effectively put many informal daycare arrangements out of business.

One presumes that the incidence of child neglect has declined as a positive result. The Virginia Department of Social Services (VDSS) reported only two child deaths in day center settings in the nine months up to and including July 2018. Whether that lower rate was typical or atypical, however, is impossible for the public to determine because previous years’ reports do not appear to be available online.

VDSS also reports “child serious injuries” at both “licensed” and “regulated” day centers. Over the same nine months, there were 525 reported injuries in licensed day centers — about one incident for every 505 children. By contrast only 6 injuries were reported for “family day homes,” or about one incident per 2,390 children. Likewise, there were only 32 injuries reported in “religiously exempt” day centers, or about one in 2,500 children. By this metric, licensed child care centers appear to be doing a much worse job than family day homes or religiously exempt facilities. Whether those ratios are better or worse than in the pre-regulatory era, I could not determine.

However, we are now living with the entirely predictable and foreseeable consequence of tighter standards — a cost crunch. I predict it’s just a matter of time before the Washington Post begins reporting on how unaffordable child care has now become.

The National Women’s Law Center’s recommended solution? See if you can pick the correct answer

  1. More state and federal funding,
  2. More state and federal funding, or
  3. More state and federal funding.

Yes, you got it! More state and federal funding. Oh, and let’s not forget that the National Women’s Law Center also makes an issue of the low pay for childcare-center employees. So, while we’re at it, let’s mandate higher pay, which will require childcare centers to increase fees even more!

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15 responses to “The New Childcare Crisis: Affordability

  1. How does this logic stand up?

    – State licensing of childcare centers has made childcare increasingly unaffordable for poor women.
    – Blacks and Hispanics constitute a disproportionate share of poor women.
    – Ergo, the licensing requirements have a disproportionate impact on black and Hispanic women.
    — Ergo, the licensing requirements are discriminatory and racist.

    Just another case of minorities suffering the consequences of white do-gooders’ penchant for seeking government solutions for every societal ill!

    Another question: What happens when poor working women can’t afford childcare? Do they stop working? Do they seek out unregulated and illegal childcare arrangements? Do they leave children at home, perhaps in the care of older children or aging grandparents? Are poor children better or worse off than before?

  2. Ok. You have defined the problem. So what is your real solution?

    • First, stop pinning this to women’s wages. When my wife and I were both working with small children it was OUR incomes not her income that counted. In cases where the Dad is not part of the family unit – Deadbeat Dads need to pay up. Second, why do women earn 19.1% less than men? That seems wrong to libertarian ole me. Finally, don’t have kids if you can’t afford to take czare of them. What part of “birth control” can’t you understand?

      • “Why do women earn 19.1% less than men?”

        One reason for the “pay gap” is that men are far more likely to work in more hazardous occupations with higher injury and fatality rates and earn higher wages as a reflection of those hazards. A related phenomenon: Men are more likely to seek employment in the high-paying IT professions, especially the aspects of those professions that have to do with coding.

        A second reason is that men don’t drop out of the workforce to take care of children or to become caregivers of elderly parents. Also, I think this is true but am willing to stand corrected: Men tend to retire later. As a result, the average male has more years in the workforce than the average female, and thus has had more time to climb the career ladder.

        There are other reasons, but those are the two most important ones.

  3. Make child care expense a subtraction from adjusted gross income to calculate taxable income. Take away tax exempt status from any nonprofit that spends any money lobbying, internally, externally through a third-party or by a combination. Drain the swamp!

  4. Men work more dangerous jobs and thus are paid more? Total BS

    • Here’s a list of the most dangerous jobs:

      – Logging workers
      – Fishers and related fishing workers
      – Aircraft pilots and flight engineers
      – Roofers
      – Trash and recycling collectors
      – Iron and steel workers
      – Truck and sales drivers
      – Farmers, ranchers, and other agricultural managers
      – First-line supervisors of construction trades and extraction workers
      – Grounds maintenance workers

      Would you accept that these are male-dominated occupations? I am willing to bet that a majority of these occupations pay above the median wage. Want to take me on?

      • Don’t take the bet, Peter. The national median wage was $31,098. Only fishers and grounds maintenance workers fell below that. However, the median wage may not be the best measure. Most of the others were pretty low paid. Only pilots, iron workers, farmers, and construction supervisors had median wages that would be considered decent or better.

  5. Women are now doing a lot of dangerous occupations – times are changing and that’s a sorry excuse for justification of discrimination to start with.

    I LIKE TMT’s idea. Take the costs of child care directly from your income but the problem is that with a 12K standard deduction – that folks on the lower end will never get that money back unless that cost is allowed to be a refundable tax credit like the earned income credit.

    Of course the bigger policy issue is – should all taxpayers be subsidizing those who have kids – because – in the end – if you give refunds to one group for some purpose – it’s going to come out of the financial hides of others ………even those who had kids but now are empty nesters!

    I KNOW what liberals want – and yes – they, as usual, think Uncle Sam is a money machine and never connect the reality that someone pays (but then again when we give tax cuts and they are funded with debt – there is no honor about thieves – left or right!

    But I’m curious what the Conservatives and Liberatarian would do on this… they always have utter contempt for the “victimologists” but I seldom hear these days – what they offer instead.

    Or is it that Conservatives don’t need to offer any stinking “solutions”, just blame the liberal snowflakes!

    • Larry, for low-income people who don’t pay federal income tax, let part of the deduction carry over to future tax years, an incentive to better one’s self.

  6. Two questions …
    1. Licensing regulations makes child care less affordable but doesn’t without regulations aren’t those children at some increased risk?
    2. Doesn’t this issue also relate to the problem of early childhood education? I hear that NYCity is now providing early childhood ed for all children and it is giving each kid a good start. Thing is the community has to be willing to pay for helping all the children that are part of the community ….

    • Jane, on point one, I think you are absolutely right. As to point two, why should taxpayers fund childcare for those who can afford it? My wife and I paid child care expenses for our kids, and many other people do too. (I remember paying more for preschool/daycare for my daughter than a colleague in Denver was paying for college tuition, room and board for his daughter.) Yes, good child care forced my wife and I to set priorities and do without some other things we wanted to buy at the time.

      People who want free child care can move to NYC or other places where it’s all free.

  7. Glad you agree with point 1, but on point 2 … whst I am saying is that preschool is now equivalent to extended public school. Lots of people who can afford it send their kids to private school, but school is available to all.

    I thought Bernie’s discussion about free public college back in 2016 made a lot of sense. His point was that the skills and knowledge now required by all citizens is more than the old K-12 can provide. Success in our culture now requires more, so I say those new free educational requirements need to be extended at both ends. Private school is still available to anyone who can chhose it and pay for it.

  8. I paid for my own college education. I paid for my law school education. I paid off my college loans. I helped my wife pay off the remaining amount of her loan. I paid for half of my daughter’s college education. I’m paying for half of my son’s college education (he’s only needs one course to graduate). Now I’m supposed to pay higher taxes so that everyone can go to college free. Hell no! At least, unless everyone who gets a free college education has to pay into a fund that reimburses everyone who paid for their own college education and that of their children and grandchildren. I’m sick of all the deadbeats wanting to sponge off me and every other person who paid their way.

    Let’s try forcing state-funded colleges to increase teaching loads to where they were 20 years ago. Cut administrative positions to where they were 20 years ago. Stop building luxury dorms and student centers. Limit administrative salaries to twice what the Governor makes. Let’s see some blood in the streets from public sector job losses.

    Just like Social Security, make any income transfers from the federal, state or local government taxable. Increase the standard deduction to offset part of this. People need to realize that their government handout comes from other people. Free preschool and free college should constitute taxable income. Or one can choose to pay tuition.

    • It sounds like you think that ‘stuff’ needs to be paid for by users, and many agree with that. Just not for all things in my book, and I think you have the wrong villain for who would, and should, pay for adequate schooling. How about the tax code as villain? Even though schools are a state and local issue, a fair federal code helps the states do their job.

      First, the business tax code… In 2018, 60 of America’s biggest corporations, with income of $79 Billion actually received a net corporate tax rebate of $4.3 Billion, giving some of them a negative tax rate, instead of paying their fair share of $16 Billion at the new low 21% rate.

      One example, Amazon, with pretax profits of nearly $11 billion, actually enjoyed a negative tax rate of 1.2% thanks to a $129 million income tax rebate. Dominion is on the no pay list list, by the way.

      I have no trouble with a US business tax rate that is competitive internationally, but the administration gave away that lowered basic rate without removing any of the egregious tax deductions. One is the stock options loophole. A recent review of 5 years of filings found that 315 corporations reduced their federal and state corporate income taxes by a combined total of $64.6 billion over the last five years by using the excess stock option tax break, even though granting those stock options cost them nothing. This particular loophole allows profitable corporations to underwrite executive compensation on average taxpayers’ dime.

      Then there is the issue of what the corporations did with their Trump tax cut. Goldman Sachs analysts estimated corporations spent $1.3 trillion in buybacks in 2018, to the alarm of politicians across the political spectrum. The research group Just Capital estimated that for the 1000 corporations it tracks, 56 percent of their tax-cut related spending went to shareholders. Not exactly business investment to expand the economy.

      Other give away deductions include accelerated depreciation which creates an enormous drain on the economy and no one is sure if it does anything to grow the economy. Or how about the annual tax credits for the fossil fuel corporations of $20.5 billion?

      These tax expenditures need only be approved by the 2 tax writing committees, the House Ways and Means and the Senate Finance committee. They are not subject to the same discussion as regular budget items.

      Then there is the issue of where the monies come from. Over half of the total revenue is from individual Income taxes. Another third comes from your payroll taxes for Social Security, Medicare, and unemployment insurance. Corporate taxes contribute only 7% of the total revenue.

      Finally, only 5 countries paid a smaller percent of their GDP toward taxes. The US figures are 7% less than the other OECD countries average… 27% vs. 33%

      We need a fair tax code for corporations and individuals. We all need to know that everyone is doing their fair share to build the kind of community we want to be a part of. The villains are the ones controlling the rules for the revenues.

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