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In Rio Rancho, N.M., Mary Bissell and her husband drive two hours every day to drop their three-year-old daughter off at her daycare. They both work in education. Bissell recently took on a remote-working role as a coach to train math teachers.
The daycare, a state-subsidized center close to the school where Bissell previously worked, is the most affordable one they could find in their area. It costs $35 per day, roughly $750 a month. The cost will soon be increasing to closer to $900 a month, which is still almost a third of the next most affordable option in the region, she said.
“The next cheapest we could find was, like, $2,000 a month, and living on educators’ salaries it’s just not feasible, you know?” Bissell said. “That’s more than our mortgage.”
The current cost is 25% to 30% of the couple’s monthly income. Bissell and her husband currently pay around $1,430 for their monthly mortgage payments, and $500 every month for their car.
Their predicament highlights a larger picture nationwide. Parents, already grappling with higher food and energy costs, are working hard to keep up with the increases in child-care costs. In some cases, parents told MarketWatch child-care costs are as much as or even exceed a monthly mortgage payment, or tuition at a state college.
In Rio Rancho, N.M., Mary Bissell and her husband drive two hours every day to drop their three-year-old daughter off at her daycare.
Courtsey of Mary Bissell
The increase in child-care costs has outpaced inflation
Child-care expenses are rising faster than inflation. Daycare and preschool prices rose 7% in April compared to a year ago, the highest level in more than 30 years, according to Bureau of Labor Statistics data released Wednesday, significantly higher than the 4.9% overall annual increase in inflation for April.
Annual child-care costs an average of $10,853 in 2022, up 12% from $9,687 in 2019, according to a recent analysis by the advocacy group Child Care Aware of America. For a married couple earning a median income, that accounts for roughly 10% of their income; for a single parent, it works out at approximately 33% of their take-home pay, the analysis finds.
The U.S. Department of Health and Human Services recommends that child care should not cost families more than 7% of their annual income. But that proves difficult for many families.
Even households earning six figures struggle to cope with the cost of child care. Case in point: Lauren Accardo thinks she and her husband make a pretty good living. As far as their income goes, they are “firmly middle class,” Accardo said.
Accardo, 37, works as an executive assistant in New York City, as does her husband Josh. They are parents to a 20-month-old child, and they both have a creative second career. While her husband moonlights as a stand-up comedian, Accardo also writes romance novels.
Their total household income comes to around $230,000, but their child-care expenses still exceed 7% of their income.
“Daycare is so exorbitantly expensive,” Accardo said. “It’s such a hit to our household budget.”
“‘Daycare is so exorbitantly expensive.’”
Accardo currently pays $300 a week for three days of daycare. That works out at about 8% of their monthly household income. Because their son is moving to a new daycare center, the fee will rise to $450 for the full week, which does not include meals.
Their son, Levon, goes to the most affordable daycare in Astoria, Queens that Accardo could find. “Anything less expensive does not exist within a couple of miles,” Accardo told MarketWatch. Soon, Levon will be moving to a full-time daycare center to be with children his own age, and to accommodate the couple’s working schedule.
The couple’s hybrid schedule and determination to meticulously split parental responsibilities allowed them to juggle their jobs and child care in the past, but now it will prove more difficult. “We were lucky to get away with it for a year,” Accardo said, “and it’s just now becoming an impossibility.”
Working parents across the country are asking the same question as the Accardos. How do other parents afford it, and how do they do it?
The COVID-19 pandemic contributed to the rise in child-care costs. Rising labor costs and dwindling child-care availability made it almost impossible for many parents to afford, experts say. But parents are rushing to find affordable daycare as those who were allowed to work from home during the pandemic are being required to go back to the office.
That demand is reflected in the number of licensed child-care centers, which finally returned to — and actually surpassed — pre-pandemic levels last year. There were 93,124 licensed centers in 2022, up from 92,597 in 2019 before the pandemic began. The number of centers dropped to 89,236 in 2020, which helped push up prices to rates seen today.
Lauren Accardo and her husband, Josh, spend more than the recommended 7% of their income on child care in Queens, N.Y.
Courtesy of Lauren Accardo
For some, child care exceeds instate college-tuition fees
For some families — depending on where they live and their size — child care exceeds all other household costs, said Nina Perez, national director for early learning at MomsRising, a grassroots organization working to increase family economic security, and to end discrimination against women and mothers.
“It exceeds their mortgage or their rent payments,” Perez said.
Melissa Lester works for the state government in Columbus, Ohio. She and her partner send their two daughters to a corporate daycare center. The total daycare tuition for their three-year-old and 11-month-old is around $19,000 a year.
Every month, over $2,000 goes to child care, and in order to pay for it, almost all of Lester’s partner’s paycheck goes toward these costs. Sometimes, Lester gives a bit extra towards daycare just to make sure they have enough.
They are paying more than an in-state college tuition, “and we’re paying that longer than someone would traditionally go to college,” Lester told MarketWatch. (For the academic year 2022-2023, the average price of undergraduate tuition and fees for instate tuition at Ohio State University is $11,191.)
Daycare has definitely always been the biggest expense, Lester said. Even when they only had one child, their monthly daycare costs were approximately 1.3 times the mortgage at that time.
They even factored child-care costs when they were buying a house. “But of course, you still can’t fathom how expensive it is,” Lester said.
