By Shereen Siewert
If the pandemic had a silver lining for Miranda Lee, it was in her Wausau employer’s work at home policy that allowed her to stay home with her infant son.
Without that, Lee said, she would have been forced to make a painful choice between staying employed and quitting her job in order to make ends meet. With costs soaring, Lee knew that sending her son to a day care would have cost more than all her other living expenses combined, an unsustainable situation she is relieved not to have faced.
The exorbitant cost of child care has become a significant burden for parents like Lee who need it to support their families. Millions of parents are finding themselves making an impossible choice between paying more than they can afford for child care; settling for less expensive, lower-quality care; and leaving the workforce altogether.
Locally, the average cost of day care is one of the biggest expenses families face, about 20 percent more than average rent and 48 percent more than in-state tuition for four-year public colleges. That makes Wisconsin one of 33 states where infant care is more expensive than college. The Department of Health and Human Services recommends child care costs should be no more than 7 percent of a family’s income, a standard that only about 6 percent of Wisconsin families can afford. Instead, infant care for one child would account for nearly one-fifth of a median family’s income in Wisconsin, according to the most recent data from the Economic Policy Institute. And families with two children face an even larger burden.
Do the math, and it’s easy to see why child care is simply out of reach for low-wage workers. A minimum wage worker in Wisconsin would need to work full time for 43 weeks, or from January to October, just to pay for child care for one infant. Yet, child care workers still struggle to get by.
Nationally, child care workers’ families are more than twice as likely to live in poverty as other workers. And a median child care worker in Wisconsin would have to spend almost 60 percent of his or her earnings to place their own child in infant care. The average early childhood education teacher in Wisconsin makes just $10 to $13 an hour.
Wisconsin offers subsidies for child care costs through its Wisconsin Shares program, but Lee, a single mother, doesn’t know whether she would qualify. She doesn’t quality for FoodShare. A family of two can pass the gross income test if she earned less than $34,848 per year. Lee’s $35,600 annual salary – about $2,967 a month before taxes – puts that type of assistance beyond reach.
Economists say the child care crisis has been exacerbated by the pandemic, which resulted in record numbers of women being pushed out of the workforce.
According to the National Women’s Law Center, more than 4 million US jobs have been lost since February of 2020, and women make up more than half of those losses. Meanwhile, one in three women considered leaving or changing their jobs in the last year.
“The pandemic really put in front of people how much caregiving is truly a part of what makes the economy work,” Lelaine Bigelow, managing director of external affairs at the National Partnership for Women & Families, told CNBC.
According to a new report from think tank Third Way, which highlighted the crisis facing both parents and child care industry workers, the longer the pandemic goes on the more parents are leaving their jobs to care for children.
Third Way found lack of child care has become the No. 3 reason for not working, up from the No. 5 spot at the onset of the pandemic. Layoffs and furloughs are the No. 1 and No. 2 reasons currently, reports Axios.
“The crumbling child care industry is increasingly holding back economic recovery across the country,” wrote Jillian McGrath, economic policy advisor, in Third Way’s report. “Without additional federal focus on the child care sector, more families and child care centers are likely to struggle in 2021 and beyond.”
Margins are tight at child care centers in Wausau in part because state regulations limit the number of small children an adult can legally supervise. Throughout Wisconsin, providers must have one adult for every four children under age 2. Several other states, by comparison, require one adult for every three babies. The result? Space, especially for the youngest children in the community, are scarce and workers outside the typical 9 to 5 workday are often left with few, if any, options.
As Wisconsin continues to grapple with a labor shortage, economists say making child care affordable is a huge piece of the puzzle. Further, studies show that every dollar invested in quality child care programs yields between $7 and $17 in net benefits to society. A 2019 report by the Council for a Strong America found that insufficient child care is costing families $37 billion a year and costing employers $13 billion a year. Though lawmakers and other stakeholders say fixing child care is crucial to addressing the state’s labor challenges, little progress has so far been made.
In September, U.S. Treasury Secretary Janet Yellen called child care “a textbook example of a broken market.”
“The price does not account for all the positive things it confers on our society,” Yellen said “When we underinvest in child care, we forego that; we give up a happier, healthier, more prosperous labor force in the future.”
