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With childcare costs bleeding many families dry and tuition prices rising, there’s no relief in sight for parents in today’s economy.
The average annual cost of childcare in the U.S. hit $10,600 per child in 2021, according to the latest data available released last week from the nonprofit Child Care Aware of America (CCAoA). That’s about 5% higher than 2020 prices. The increase even outpaced the high rate of U.S. inflation for the third year in a row.
That’s bad news for the roughly 32.8 million U.S. families—two-fifths of the total 83.2 million families in the country—that had children under age 18 in 2021, according to the Bureau of Labor Statistics. Nearly 90% of U.S. families with minors had at least one parent employed outside the home last year, while 62.3% of these families headed by a married couple saw both spouses employed.
In order to work, millions of these families need to rely on some form of childcare. Some families may be able to get family or friends to help out, rearrange their work schedules, or even have older siblings babysit after school—but most need to pay for care at some point.
The cost of childcare does vary state to state, as well as by the type of care needed. Yet, CCAoA’s data finds that in a majority of states, the expense of childcare for two kids exceeds the average family’s housing costs. In 34 states, childcare costs are higher than in-state tuition at a public university.
Cost is one of the big reasons Julie Groce—an educator and mother in Grand Blanc, Mich.—waited until she was in her mid-thirties to have her son. “We wanted to be financially ready. We thought we were doing the right thing. Turns out it didn’t matter. Like it does not matter. It’s going to suck you dry no matter what,” Groce recently told Fortune’s Alexis Haut on the new podcast focused on childcare, Where is my Village?
Like many parents of young children, Groce is counting down the months until she can enroll her son in public school. “We paid $1,200 a month, which is how much our mortgage is. So we pay two mortgages,” she explains on the podcast, adding that their childcare provider, like many across the country, recently increased tuition costs.
That cost, however, is a double-edged sword, Groce says. “I’m torn because on one hand, it is 1,000% worth it—the way that he’s growing and thriving, totally worth it. If I could pay more, I would, but I also want to be able to pay the bills and pay our mortgage.”
The pandemic exacerbated the childcare crisis
Not only is childcare expensive, but the industry is still struggling to bounce back from the pandemic. The number of employed childcare workers is 9.7% below what it was in February 2020, according to a recent analysis by the UC Berkeley Center for the Study of Child Care Employment (CSCCE). And that’s likely an underestimate considering that does not include home-based childcare providers.
These efforts are likely going to be harder as federal funding runs out. During the first two years of the COVID-19 pandemic, federal lawmakers allocated about $50 million toward childcare, but did not implement any long-term policies or programs.
President Joe Biden’s Build Back Better Act—which included provisions to lower care costs for American families and develop a more robust childcare system—failed to gain traction. And the Inflation Reduction Act of 2022 the president signed over the summer did not provide funding for the belabored industry.
Several individual states have pledged to boost their funding toward childcare, but many of the programs are still in the planning phases.
“Childcare is slipping farther and farther out of reach for parents who can’t find or afford the care they need,” Senator Patty Murray (D-WA) said in a statement. Murray has been a major proponent of childcare funding and legislation over the last two decades. “The childcare crisis is holding families and our entire economy back, and we can’t stop working to fix it.”
—Additional reporting by Alexis Haut
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