For many families in America, childcare is a huge household expense. It can cost you almost as much as housing, or a semester of college. Childcare costs keep climbing but wages haven't, and this generation of parents is less financially stable and more indebted than the one that raised us.
This week Senators Patty Murray, Mazie Hirono and Bob Casey reintroduced the Child Care for Working Families Act in the hopes of saving parents potentially thousands of dollars a year.
The Democratic senators are proposing a plan that would cap how much working families pay for childcare at 7% of a household's income.
This could be huge because right now, 1 in 3 American families spend 20% or more of their annual household income on child care, according to a recent survey by Care.com, and 1 in five American families spends more than 25% of their income on childcare, according to Child Care Aware.
For some families, the cost of childcare keeps a parent out of the workforce, but single parents often don't have the option of being stay-at-home parents, and some single moms spend more than 50% of their income on childcare at a time when the U.S. Department of Health and Human Services defines affordable childcare as costing no more than 10% of a family's income.
"[The Child Care for Working Families Act] will ensure that no parent has to pay more than they can afford on child care, at most middle class parents would pay 7 percent of their income on childcare, but parents who make less, pay less. In fact, some parents will pay nothing at all," Murray explained at a press conference. "Our bill helps expand options for childcare in the summer and during nontraditional hours when quality care is even harder to find."
Murray's bull would also see universal preschool for 3 and 4-year-olds rolled out across the nation, and pay increases for childcare workers, who are usually working for very low wages.
The act was first introduced in 2017 but didn't get a lot of support at the time. A lot has changed in the Senate and the House since 2017 though, and Murray thinks the bill has more than a fighting chance this time around.
It remains to be seen whether the Child Care for Working Families Act will become law, but it's clear that ideas like this are necessary given the current cost of childcare in America. According to Child Care Aware, childcare is unaffordable for millennial parents in every single state in America.
Recently, the online life insurance agency Haven Life broke down the cost of childcare by state, using data from the Child Care Aware 2018 Report: The U.S. and the High Cost of Child Care (there is no data for Montana or South Dakota, but according to Care.com's childcare calculator, daycare for a toddler in Montana costs just shy of $1,000, and about $700 in South Dakota.)
Here's how childcare costs break down by state:
- Annual cost of child care: $11,832
- As a share of married-couple family income: 11.8 percent of $100,499
- As a share of single-father income: 22.1 percent of $53,554
- As a share of single-mother income: 33.6 percent of $35,232
- As a share of minimum wage income: 57.3 percent of $20,640
- Source: Haven Life
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