The rising cost of childcare in the US is forcing parents to find new ways to make ends meet. — 123rf.com
A DRAMATIC increase in childcare costs since the pandemic is forcing parents to find new ways of making ends meet, from working part time at a daycare for a discount to driving for a ride-share service on weekends.
In a sign of how extraordinary the financial pressure has become – at a time when housing, groceries and other everyday items have also grown more expensive – even workers with full-time positions at the likes of big banks and tech firms are among those embracing such solutions, according to interviews with nearly two dozen parents.
The measures show how childcare costs are shaping the labour market and straining even relatively high earners. Monthly payments for childcare were 32% higher in September than the pre-pandemic average, according to an analysis by the Bank of America Institute of the lender’s customer data.
There are ripple effects to the wider economy from the childcare squeeze. Families shelling out for this service have been spending at a slower pace than other households and dipping into savings at a faster rate, the think tank found.
The average cost in the US for full-time, in-home infant care like a nanny is around US$39,270 (RM181,000) per year, according to Care.com data, and is even higher in cities like New York and San Francisco, where the expense can top an eye-watering US$45,000 (RM207,000) or US$56,000 (RM258,000), respectively. Centre-based care can also be pricey: In cities like Washington, care for a toddler at a centre can exceed US$24,000 (RM110,000) annually.
“People are having to make tough choices and really get creative,” said Raena Boston, co-founder of Chamber of Mothers, a non-profit advocating for paid leave and affordable and accessible childcare. In the last year, Boston says she’s increasingly heard stories of parents working opposite shifts from their partners – and one case of someone tapping their home equity line of credit to cover the cost.
Hefty discount on childcare
Rachel Rhyne-Flemings finishes up her corporate job at early so she can work several days a week at the daycare her children attend. The second job only pays US$14 (RM64) an hour, but provides a greater financial reward: a hefty discount on care for her infant and two toddlers.
She ends up paying about US$1,425 (RM6,565) per month, saving about US$3,500 (RM16,126) each month in tuition. After Rhyne-Flemings and her husband handle dinner and bath time, she fires up her computer and finishes tasks for her day job.
“It’s a conversation all the time where my husband and I say, ‘it would be so much easier if you didn’t have to work at the daycare,’” said Rhyne-Flemings, who lives in the Phoenix area. “One of us could cook dinner and one of us could pick up the kids, how nice would that be? And then I look at the numbers and go, ‘Gosh, US$3,500 a month.’”
Such costs, shouldered along with other financial burdens, are taking an economic toll.
“With rising childcare costs, persistent inflation, student loan payments resuming – all these factors combined, they will mean consumers will continue to slow down their pace of spending,” said Anna Zhou, an economist at Bank of America Institute.
“In terms of the labour market, I do think if childcare costs continue to rise, it would be a negative risk factor for the female labour force participation rate.”
Rhyne-Flemings is not alone in putting in work at a daycare center as a trade-off for more manageable costs.
Heela Rasool, 41, and her husband pitch in 10 hours a month to handle payroll and assist in class at the cooperative preschool their two daughters attend in Vienna, Virginia. Because of this kind of parent help, the provider charges what it estimates is 25% less than other centres in the area.
The preschool is only part-time, though, so Rasool uses an au pair to cover the gaps. Overall, Rasool estimates her family pays roughly US$35,000 (RM161,260) to $45,000 a year in care.
The couple, who earn a combined $400,000 (RM1.843 million) a year, are putting off big vacations right now. Rasool says if someone had told her a decade ago she’d feel financially overextended making this much, she wouldn’t have believed them.
“We’re in a pretty comfortable income bracket and I still feel stretched,” said Rasool, who works at a think tank.
US President Joe Biden promotes his Build Back Better Agenda, highlighting the importance of investing in childcare during a speech at the Capitol Child Development Center in Hartford, Connecticut in 2021. — BRENDAN SMIALOWSKI/AFP via Getty Images/TNS
No reprieve
Families across the US are likely not in for a reprieve any time soon. In last October survey of 1,000 parents, some 29% of respondents reported that their child care tuition had increased in the past month. Some US$24 billion (RM110 billion) in pandemic aid to childcare providers expired at the end of September, a dynamic that may push those businesses to hike prices.
Social media posts offer a window into the kind of arrangements parents are using to make it work. Last October and November alone, videos on TikTok tagged #wfhmom – for parents who work from home and watch their children at the same time – garnered at least 36.7 million views, according to the social media company.
On the app, friends Daisha Davis and Mercedes Hammonds share their experience multitasking work and watching their toddlers through their joint account “2 WFH Moms View.” They field questions from parents who want to do the same.
Dallas-based Davis, 27, says working West Coast hours for her fintech job allows her to juggle both. Nap time gives her another two- or three-hour window to power through tasks. She makes US$50,000 (RM230,375) a year plus bonuses, and says full-time childcare would run her and her partner at least US$1,000 (RM4,607) a month.
“If I was not working from home, I would probably have to get a part-time job and just barely float by,” Davis said.
Just 4% of employers offer access to subsidised childcare, according to the Society for Human Resource Management, which tracks employee benefits. Even for the small number of workers who have that benefit, it’s not always enough.
Stephanie Rosario, a mum and part-time student in Bridgeport, Connecticut, makes roughly US$52,000 (RM239,590) a year working at a preschool. As an employee, she’s entitled to an 18% discount on tuition for her four-year-old daughter, but still has to fork over US$1,600 (RM7,372) a month.
“After rent, car note, car insurance, petrol, utility bills, food – which is ridiculously expensive right now – I was at the point where I was left with $7 (RM32) to myself,” Rosario said.
She now taps her mum to care for her daughter while she makes extra money driving for Lyft on the weekends.
Rosario, 38, is hoping once she completes her master’s degree in June, things will improve financially. But there will be new childcare puzzles to solve: In August, her daughter will start kindergarten, and Rosario will have to arrange for care before and after school.
“I’m stressed about it right now,” Rosario said. “I worry about how I am going to make it.” – Bloomberg News/Tribune News Service
