Soaring college costs are a hot topic on the presidential campaign trail, but as any parent of an infant or toddler knows, paying for child care can also break the bank. An analysis released last fall found that in 33 states, the annual cost of day care is more expensive than in-state college tuition. What’s a cash-strapped, minimum-wage-earning parent to do?
Fortunately for moms and dads, the same researchers who highlighted the out-of-control comparison to college tuition are back with some policy-based solutions. Last week, a report from the Economic Policy Institute proposed large-scale public investments that would boost the quality of child care while easing the financial burden on families.
The institute hopes to inspire policy makers to advocate for funding that would give more children access to high-quality education and improve the quality of child care jobs and workers, according to the report.
“Kids that have had these opportunities early in life go on to do better in school and eventually do better in the labor market,” Elaine Weiss, national coordinator of the children’s advocacy group Broader, Bolder Approach to Education and one of the report’s authors, said in a statement.
The report noted that, according to the Department of Health and Human Services, child care and early education is considered “affordable” if the cost is less than 7 percent of a household’s annual income—down from 10 percent last year. In some states, a full-time minimum-wage worker has to spend as much 90 percent of their take-home pay on child care. The institute recommends capping the cost of child care at 10 percent of a family’s annual income.
If that suggestion was implemented, the institute estimates that families with an infant would see annual savings ranging from $350 in Mississippi to $8,304 in Massachusetts. Savings for families with two children (an infant and a four-year-old) would start at $4,289 in South Dakota and go all the way up to $21,085 in Massachusetts.
Despite those proposed savings, when it comes to child care, the United States is still behind much of the developed world. In Finland, which regularly outperforms the U.S. on international math, reading, and science assessments, children receive free day care and preschool regardless of household income.
While the U.S. has high-quality child care and educational services, economic barriers prevent many children from accessing them, the report’s authors wrote. Families with higher incomes spend more money on “enrichment activities” for their children than do families with lower incomes. The spending gap between those with the highest and lowest household incomes soared from $2,700 in 1970 to $7,500 in 2006.
“Inequities in education and opportunity begin long before children start school, and they stay with people for their entire life,” Valerie Wilson, director of the institute’s program on race, ethnicity, and the economy, said in a statement. “The benefits to an ambitious national investment in child care and early childhood education go beyond helping children and their families.”
The report included research from the McKinsey Global Institute that found closing the gap in educational achievement between students from high- and low-income households would amount to a $70 billion annual boost to the United States’ GDP.
The authors also suggested providing incentives to increase pay and training for care providers and educators so that the field as a whole attracts more—and better—workers.
“Child care is extraordinarily expensive, and yet child care workers are among the lowest-paid workers in the country,” Elise Gould, an economist for the institute, said in a statement. “An ambitious public investment in early childhood care and education will not only make caring for young children more affordable for families, it will raise wages for workers.”
The report concluded that though the suggested plan may be ambitious and would require “new financing,” the modifications to the current child care and educational systems are worthwhile investments in the country’s economic future.
“They are worth it in the aggregate benefits they would provide the economy (and even government budgets), they are worth it in terms of the greater economic mobility they would allow, and they are worth it for the help they would provide working families in balancing work and family,” wrote the authors.
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