Dear reader,
Worry over mounting costs of living has been persistent for years now. Households are carefully watching gas prices, economists are laser-focused on inflation rates and politicians are relating every policy proposal to affordability.
This week, we wanted to look at the cost of child care. All around the country, from Colorado to California to Oklahoma to Mississippi, state governments are contending with gaps in funding for this care. And it’s a background factor in other concerns in the news, such as the nation’s birthrate.
We asked the reporter Susan Shain to look at the rise of child care’s costs, and why the market for it seems to be failing across the nation.
— Matt Thompson
How much does child care cost?
The median cost to get full-time care for an infant in the United States is $14,106 per year, or $1,176 per month. That figure is determined by the Economic Policy Institute, a progressive think tank that used data from the Department of Labor and the nonprofit Child Care Aware of America to calculate estimates for every state.
If those numbers seem low, you might reside in a city or on a coast, where care is generally more expensive. The median monthly costs vary greatly around the nation, from a low of $572 in Mississippi, $1,342 in Illinois, $1,829 in California and a high of $2,363 in Washington, D.C. The median above comes from the state in the middle of the range: Nebraska.
The federal government considers child care to be affordable if it costs less than 7 percent of a family’s income. Of the 5.1 million American families purchasing child care, one analysis estimates that more than 40 percent are paying unaffordable rates, with the ratios highest among poor families.
Why is it so pricey?
The problem has only worsened over the past decade, as day care and preschool prices rose roughly 41 percent, slightly faster than inflation, according to the Bureau of Labor Statistics. Data from Care.com, a platform for finding caregivers, shows an even bigger rise: Among day care centers listed on its site — a much more limited sample — prices for care for one infant have skyrocketed nearly 70 percent since 2015.
According to Elise Gould, a senior economist at the Economic Policy Institute, child care started to become more expensive than housing in many parts of the country about 10 years ago. The uptick, she hypothesized, might be attributed to increases in the costs of commercial rent and labor, especially since the service can’t be automated or optimized. Care is typically more expensive for an infant than it is for older children because babies require more workers, Gould said. Most state regulations mandate that one worker can care for only four or five babies at a time.
According to Gould, variations in the cost of rent and labor explain why prices are regionally different. In Mississippi, for example, the minimum wage is $7.25 an hour, compared with $17.95 in Washington, D.C.
Other reasons for recent price spikes include the growing cost of food, supplies and insurance, as well as the expiration of pandemic-era government relief. Providers, who already operate on thin margins, have had to relay these additional costs onto parents.
The result: Putting two kids in day care now costs more than the median rent in nearly every state.
How does this affect families, workers and the economy?
Economists say that child care is an example of a “market failure”: a situation where the laws of supply and demand don’t work. In this case, the cost of a product is just too high for the customers to bear. One analysis estimates the true cost of high-quality care for an infant would average out to more than $2,400 per month. But most providers can’t charge that because parents can’t pay it.
The industry is broken for the workers, too. The profession is one of the country’s lowest paying, with female workers earning a median of $11.54 per hour. That has made recruitment and retention difficult and has contributed to a shortage of day care spots nationwide.
“The reality is the child care work force, which is the vast majority female and disproportionately women of color, is subsidizing the economy” by making low wages, said Taryn Morrissey, a professor who studies child and family policy at American University.
In other countries, the government has stepped in. Canada has invested $27 billion with the aim of bringing child care costs down to an average of $10 a day. France offers subsidies and tax credits that cover up to 85 percent of the cost of care.
While the U.S. offers day care subsidies and Early Head Start, a program that provides care for children younger than 3, only the poorest families qualify. Funding for the programs is also limited, so only about one in five eligible children receives support, according to 2021 data. And funding has been further slashed since then.
Some states have taken matters into their own hands:
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In 2024, Vermont introduced a payroll tax that subsidizes child care for many residents.
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The following year, New Mexico made child care free for all families.
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With significant financial support from the state, Mayor Zohran Mamdani of New York recently rolled out 2,000 free day care spots for 2-year-olds. He has pledged to create free child care citywide.
Who does child care benefit?
Experts say that Americans have historically viewed child care as the responsibility of individual households, rather than a shared public good — though that perspective changes when children enter kindergarten.
But affordable child care doesn’t help just parents, Morrissey argues, pointing to three benefits it provides for the broader economy:
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Improving school readiness for the future work force
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Making child care workers less reliant on public assistance (at the moment, nearly half depend on programs like Medicaid or food stamps)
Aside from the economy, affordable child care is a boon to children themselves, Morrissey said, because supporting them during their first three years is crucial to their development.
“We’re investing the least when it matters the most,” she said.
What can I check out next?
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This Times video reveals the surprising way that Vermont’s child care program came to be.
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In 2024, I covered New Mexico’s new child care policy for High Country News. Since then, the program has expanded.
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For The Atlantic, Elliot Haspel, the author of a new book on child care for all, outlines the history of the movement, including the failure of Build Back Better’s plan.
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Approximately one in five child care workers is foreign born. A report by the left-leaning think tank New America suggests that increased immigration enforcement has negatively affected that work force.
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This story is almost five years old, but still relevant: The Upshot examined how other countries pay for child care.
— Susan Shain
Your turn
Test your knowledge: Research shows that pay is the most significant factor in the quality of child care. What is the median hourly wage for child care workers?
Tell us your thoughts: Do you have children who need child care? If so, how has that shaped your life? Has the cost of care required you to reassess your career, where you live or whether to even have children? Please email your thoughts to [email protected].
Following up: In recent weeks, the newsletter has focused on the issue of homicide in the country — how many happen and how many are solved. Meanwhile, Headway has been rolling out a multipart series about different ways that communities are preventing violence. Last week, we looked at how teenagers are using music in Philadelphia to make their neighborhoods safer. You can read — and listen to — their stories here.
The Headway initiative is funded through grants from the Ford Foundation, the William and Flora Hewlett Foundation and the Stavros Niarchos Foundation (SNF), with Rockefeller Philanthropy Advisors serving as a fiscal sponsor. The Woodcock Foundation is a funder of Headway’s public square. Funders have no control over the selection, focus of stories or the editing process and do not review stories before publication. The Times retains full editorial control of the Headway initiative.
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