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Second Shift

How The Astronomical Cost Of Child Care Is Forcing More Women To Quit Their Jobs

Child care now costs more than college tuition. For many parents, the gender wage gap means women are more likely to leave their jobs.

How The Astronomical Cost Of Child Care Is Forcing More Women To Quit Their Jobs
[Photo: Flickr user David D]

Maria Miller* has been in the hospitality industry for over a decade, working her way up through management to her current director-level position. She’s also the mother of a toddler and is expecting another baby this May.

"With one child, it didn’t have a huge effect on our family," Miller tells Fast Company, "but with two children, it will have a much greater impact on the overall decisions we make for our future." 

Juggling career and family is a given for almost every working parent today. According to Ernst & Young’s Global Generations Survey, the biggest challenge U.S. workers face is finding a balance between lengthening hours at work and spending more time with family. Data from Child Care Attendance Automation (CCAA) that tracks attendance in care facilities reveals that nearly 11 million kids under the age of 5 are in some type of child care arrangement in the U.S., where they spend an average of around 36 hours per week.

This comes at a high cost. Recent analysis from the Economic Policy Institute (EPI) found that in 33 states and the District of Columbia, infant care costs exceed the average cost of in-state college tuition at public four-year institutions. It’s ironic, given that as millennials become parents, many are still paying back loans for their own college educations.

Children between infancy and preschool are the costliest to care for. According to the EPI’s findings, "When 10 family budgets in various areas are reconstructed to include two-parent, two-child families with an infant and a 4-year-old (instead of a 4-year-old and an 8-year-old), child care ranges from 19.3% to 28.7% of total family budgets." For older children, the costs range from 11.8% to 21.6% for families with a 4-year-old and an 8-year-old.

The EPI also found that child care costs as a percentage of total family budgets often exceed the 10% affordability threshold established by the Department of Health and Human Services (HHS).

Miller reports, "We currently pay $23,000 per year in child care, which is 10% of our salary." When the second child is born, she says the cost will jump to $46,000 per year (or 20% of their two-income household's earnings). This will exceed that 10% affordability guideline issued by the HHS.

Although costs vary according to where you live (a household with one 4-year-old in rural South Carolina pays $344 a month, but it jumps to $1,472 a month in Washington, D.C.), Miller’s not alone. She’s a member of the working parents platform It’s Working Project by Forty Weeks where other mothers and fathers have reported spending a similar amount and more on their child care.

Even though their child care costs will soon be at 20% of their income, the Millers are in a better financial situation than most parents in dual-income homes. For example, the average annual earnings of men in Washington, D.C., is close to $68,000 a year, while the average salary for women in that city (D.C. has one of the smallest wage gaps in the country) is around $61,000 a year .

A family in D.C. earning those salaries would be paying over 35% of their dual income to pay for the care of two young children (or more than three times what is considered affordable). That imbalance of affordability grows even more in the second most expensive location for child care, New York City, where men earn on average around $51,000 a year and women earn on average only $44,000 a year.

"Women lose $11,000 a year on average because of the pay gap, which incidentally is just about the average yearly cost of child care in the U.S.," Tracy Sturdivant, cofounder and codirector of Make It Work, a campaign to advance economic security for working women, men, and families, points out.

"To really get a handle on America's child care crisis, the federal government has to take action to bring child care within the means of working parents," Sturdivant tells Fast Company.

One way might be raising the minimum wage across the country. Among the parents who are the hardest hit are those working minimum-wage jobs. The EPI found that a full-time, full-year minimum-wage worker with one child falls far below the family budget threshold—even after adjusting for higher state and city minimum wages. Research by the Census Bureau indicates that families below the poverty line spent 30% of their incomes on child care in 2011, which is as much as four times the percentage spent by more affluent parents.

Despite being in a higher earning bracket, Miller admits she’s considered leaving her job because of the cost of child care. And she's certainly not alone. Research has indicated that the rise in child care costs have coincided with the number of parents—women in particular—who choose to stay home.

The most recent data from Pew Research found that after decades of decline and a drop to 23% in 1999, the number of stay-at-home mothers rose to 29% in 2012.

In order to retain talented parents, Sturdivant says there are some things employers can do to ease the strain, beginning by ensuring they're paying women and men the same amount for equal work.

"Additionally," she says, "employers can support working parents through policies like fair, flexible scheduling, paid sick days, and paid family leave, so that they’re never forcing their employees to choose between work and family."

*Miller's name has been changed at her request to protect her privacy.

Related: What Netflix's Amazing New Unlimited Parental Leave Policy Really Means

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