Why Daycare Is So Expensive In America

we are depleting our savings dramatically we take 10,000 a month out of savings sell our stocks whatever my financial advisor does I don't actually even know because I don't want to know because it makes me ill to think about because I had a good nest egg to buy a house at one point in life and now it's paying for daycare I'm usually the first one up and out of bed using it with the cat shower make coffee try and catch some some news on the TV before these guys start waking up I usually go in around 6:30 and then what you see now is generally the the chaos that ensues yeah all right pop down the butter hands thank you ready yes all right let's go not by my we're all going in together okay bye-bye still here hello so I pay about five thousand a month for child care for the three children which is insane Nathan makes $100,000 after taxes that's sixty five thousand and rent is five thousand a month so we don't have that money [Applause] it's really expensive to raise a child in America it costs more to send your kid to this daycare than it does to go to college just four blocks away childcare costs are different from state to state even county to county overall the cost of childcare has roughly tripled since 1990 which is more than the overall rate of inflation today it's a multi-billion dollar business and it feels like almost everyone is struggling to keep up you want me to look whether you live in Kansas what are you living Missouri whether you live in California or New York the cost of care is often beyond that which families can afford it causes a lot of stress except for public education almost every form of social service social policy have been privatized childcare centers can't afford to provide it and families can't afford to pay for it the money will run out in the next couple of months and at that point I actually have absolutely no idea what we're gonna do we are not investing in that when the well-being and the development of the brains of our children and that's sinful the cost of childcare is generally paid for by a combination of the government parents and childcare providers in other countries like Denmark and Sweden the government foots most of the bill in the US the cost falls mostly on parents and providers to try and make sense of how we got here I called Sonia Michele an expert on America's child care policy history a lot of other countries have different rationales for why they have childcare gender equity preparing children for school boosting the economy whatever the u.s. – grace does not subscribe to those rationales the issue of childcare in America has been around since the beginning of America itself Native Americans carried their babies and woven slings colonial women put them in standing stools to keep them from falling into fireplaces and african-american mothers saying white babies to sleep while their own children comforted themselves in the 19th century the answer to who looked after your children generally came down to how much money you had it was this ideal of maternal care and the woman in the home the angel in the house there were all these images that were used but some historians called the cult of domesticity itself the idea was that women would stay home to take care of their kids but that was an ideal that really only middle-class women were able to attain working-class women even if they had a male breadwinner the husband the male could not generate enough income to support the whole family and so women had to work as well and so then there was the dilemma of you know what to do with the kids since there was nowhere to bring the kids they would sometimes join their parents at work oftentimes in dangerous conditions at mines cotton mills factories and farms there's not even mandatory school attendance until the late 19th century so kids could work and there was no legal impediment to that there was a mix of formal and informal day nurseries run his charities we've got something in this town that every American town will soon have to have a Day Nursery where working mothers can leave their children to be cared for while they're on the job although some people call the children eat our orphans they arrive at the nursery as early as 6:00 in the morning and don't leave until their parents get back from work this kind of feminist notion that we're gonna provide child care so women can enter the labor force on an equal footing with men from their widows or mothers pensions were born a stipend was given to women who lost their male breadwinner because he was injured in a factory or died so this was just the opposite of childcare instead of supporting women so they could go into the labor force the government said if we're going to support women so could stay at home but when world war ii came the government started recruiting women to work in factories as the men went out to war on the production line Rosie the Riveter steps in when the draftees step out American girls till 105 millimeter shells with the nonchalance of a tea party TNT from 1940 to 1945 the total women in the workforce rose nearly 30 percent and they very brilliantly realized that if women had children something had to be done for the children so this was the first and only time that the American government the federal at the federal level said okay we have to support childcare essentially the US was the closest it had ever been to having universal childcare an amendment to the Lanham Act gave families access to childcare six days a week including summers and holidays and families only had to pay roughly $10 a day in today's dollars but once the war ended and the men went back to work government funding dried up and a lot of centers closed in 1965 the Johnson administration launched project headstart a comprehensive Child Development Program as part of the president's war on poverty a headstart for poverty children in 1971 President Nixon vetoed a child care plan saying it would weaken the role of family in the 80s government funding fell again with a public backlash against the idea of welfare for low-income women today the government covers less of the child care burden than it did in the 40s but that's not to say Uncle Sam is completely out of the picture the headstart program is still standing and provides roughly nine billion dollars in grants to community based nonprofits schools and health care centers even so parents across the income spectrum are struggling to balance their budgets with the cost of child second there's this butterfly dress or you have this shirt that has buggies on it so for years I was very good at savings and always put money away every month every week every opportunity are you trying to hold your head the money will run out in the next couple of months and at that point I actually have absolutely no idea what we're gonna do a 2011 census study found that on average families were spending 7 percent of their income on child care the Department of Health and Human Services used that data to recommend people not spend more than that but if you look at how things actually play out across the country today there's not a single state where the cost of sending a toddler to a licensed childcare centre averages out to actually meet that recommendation for single parents it's even worse creeping up to 65% of their median income depending on where they live HHS said it's considering updating its recommendation with a more nuanced approach those families who don't pay for child care save money by either staying home or having family and friends step in to babysit I talked with Naomi a single mom in South Orange New Jersey about what it's been like to try and make ends meet while paying for child care for her two youngest sons care to me partially is amazing and wonderful and I found the perfect situation for my family and for my children for their development and also it makes me physically ill because I have three children to the tune of $2,100 per child and we don't bring in over $100,000 for a year so we don't even cover the cost of what it is for child care and half of our rent I wanted to see if money really could buy you peace of mind when it comes to child care so I went to the Manhattan Office for Home Front staffing it's an agency that places nannies butlers and chauffeurs for high income New Yorkers top firm lawyers and investment bankers it's still a struggle I mean I definitely think if you have more money that there are more options without a doubt available to you it's still like the bottom line what do you have left over after you pay for everything at the end of the month child care isn't just an issue two families bottom line that stress can pile up at the office to Niomi currently works at a university but she said in previous jobs if she called out sick she didn't get paid even if they're paid like I said a good salary and these are big corporations they have lack of performance at work they're stressed out they're going to Human Resources saying like what can you do for me do you have back-up childcare my nanny called in sick what do you do in your nanny calls in sick and you have a child parents need to get their names on lists like before their child even born and it's a lottery to get in I applied when I was three months pregnant and there was a waitlist which is shocking and bizarre but we're in New York City and I think that's actually pretty typical today there are three main types of childcare non-profit like programs run by the YMCA for profit like Bright Horizons and government-run like Head Start or pre-k all of this doesn't even get into the market of private caregivers like nannies and Au Pairs most of the programs in the US are privatized and those centers serve a lot of kids the cost of care for childcare really is within the individuals who do the caring the teachers and the nurturers and the caretakers for those young children critically important individuals are expensive it's a very labor driven industry licensed childcare classrooms require a specific ratio of kids to teachers in New York it's one teacher for every four infants with a maximum group size of eight as the kids get a little older the class sizes get bigger HHS has this tool that you can use to estimate the cost to run a childcare center in different states after factoring in salary costs benefits and other non personnel expenses and revenues from subsidies and tuition their theoretical childcare center came out with just two thousand five hundred thirty-seven dollars in net revenue I talked to one childcare provider who said it's a good year she just breaks even I wanted to see one of these daycares in action I found a place in New Jersey called work and play it's kind of like a we work meets daycare parents can work on the ground floor and enroll their kids in the childcare center downstairs and it's a different model than most centers at charge tuition here parents pay $15 an hour for the times they do need so if you just need care Monday's nine to one you commit for a three month session and only pay for those set times as a business owner I can see why it's so expensive you know once you're paying a salary there's also payroll costs on top of then and then there's you know the facility cost the heat the electricity the Wi-Fi everything that you need you also want to pay your teachers well because you know it's important they're just people trying to make their life work as well the median pay for child care workers in the u.s. in 2018 was $23,000 a year 11:17 an hour that's slightly less than animal caretakers like pet sitters and groomers child care providers really feel that they cannot survive on the low salaries and the long hours so you will see a a high turnover rate I talked with a lot of families who needed childcare and most of their needs came down to three main things safety quality and affordability it's not just urban centers that are feeling the squeeze the demand for child care is way higher than the supply all across the country more than half of Americans live in what's called a child care desert we did a study a couple of years ago and we found there was faced for only 27 percent of those children likely to need care that's a really low number where we don't know where the rest of those children are being cared for so it's it's a huge concern for us some of those families who can't get licensed care may turn to unlicensed centers that are typically cheaper but aren't always safe in some cases it's life or death Barbara Bowman has been working in childcare since the 50s she led early childhood education at Chicago Public Schools for eight years and spent some time consulting the US Secretary of Education in 2008 I asked her what she saw as the biggest hurdle to getting things done in Washington legislators suggest something they wouldn't they get passed around to the legislators who were known for being supportive of early childhood and it would come back marked up child care funding in the u.s. has been in this perpetual a banned flow in response to cultural values today we're facing record numbers of women in the workforce and for many Americans the prospect of having a child means you have to decide whether or not it's worth it to go back to work if you don't have access to the high-quality care you know you may see you know women having to stay home and take care of their children because they have no other options some clients have given up their jobs because it doesn't make sense for them to work anymore because all the money they're paying is going to their child care in Estonia mothers are entitled to more than two and a half years of paid leave but even in one of the most progressive countries for parental leave there's still a pretty big gender disparity fathers in Estonia are only entitled to two weeks meanwhile the u.s. is the only developed country where neither mother's or Father's are entitled to any paid parental leave that absence of federal legislation has resulted in a lack of access for working parents in 2017 only 15 percent of American workers had access to paid family leave there are some states that have taken paid leave into their own hands as of May 2019 at least five states had their own paid family leave laws of course there are federal subsidies for some families who can't afford child care but there are a lot of people who qualify but don't actually get the vouchers that's in part because some parents just don't apply either because they don't know about them or find the application process too daunting in 2018 President Trump added an additional 5.8 billion dollars in discretionary spending over two years to the child care and Development Block Grant you can also write off up to three thousand dollars in child care expenses from your taxes for one child up to six thousand for two or more the benefit you get from that write-off depends on your income altogether Americans claimed three point six billion dollars in child care credit in tax year 2016 compared to some other tax credits that cost more than a hundred billion dollars a year the tax break for child care is pretty minimal I mean there's a child care tax dependent credit you got it it covers nothing it's like maybe two to three thousand dollars a year there needs to be something that's either you get a credit for having a caregiver in your home much more than three thousand dollars that you know you can write off on your tax return or the corporation should have other options when they're hiring employees so money can buy you more options but it seems like parents all across the income spectrum are stressed about the cost of childcare and politicians in Washington are starting to take notice that's why I'm proposing a big structural change the universal high quality childcare and early education for our littlest ones it is unamerican we should be the number one nation for investing in children investing in child well-being the cost of raising a family bunka trump has pushed the issue in the white house it is a priority of this administration and it is a legislative priority to ensure that American families can thrive president Trump included a measure in the 2020 budget proposal that would give new parents at least six weeks paid leave Democrats have put forward their own pavely proposal with a family act Republican senators Marco Rubio and Mitt Romney have put forward a paid family leave bill it would let parents pull up to three months of their Social Security benefits to help cover leave after having a child but as of early May 2019 none of those proposals have made it through Congress and while these proposals would help families with newborns they don't change much about the struggles of paying for child care for toddlers before they go to kindergarten one Democratic proposal would try and address this by upping the child tax credit to $3,600 a year for families with young children that would be spread out over $300 a month and on the heels of his universal pre-k New York City Mayor Bill DeBlasio is rolling out three K for all an effort to give three-year-olds and low-income neighborhoods access to free all-day early childhood education the program is currently up and running in 12 districts across New York on a smaller scale Jamie is talking with companies to see how they can make their corporate culture better for parents there's definitely still a disconnect I would say between like top management and human resources and just making it a priority there's no one solution it's going to have to be a combination of solutions to help to address this issue some people are tackling it by adapting to the changing workforce a lot of times the jobs that low-wage workers have are on different hours that don't match what the child care centers have so they're not typical nine-to-five jobs so that puts an additional challenge on finding available childcare there are a whole lot more independent contractors now than there were ten years ago and statistics show that that number is just gonna be going up they might not need five days a week of 8 a.m. to 7 p.m. tiled care anymore sure Laura Marling majority of just holding hands in the show stop it oh my get up there's nothing cheap or affordable you do what you have to do for your children and you want them to have the best possible early childhood experience and the entire life experience so once you're a parent doesn't matter what you have what you make what you do it's all for them and that's that's where we are


  1. Why are you raising your family in Manhattan if you are only bringing in 65k? You can get a 4 bedroom HOUSE, with a study and two bathrooms for $1,500 a MONTH. And it be a decently nice house. Yes, childcare is very expensive, my mother couldn't afford childcare, so when she got off of maternity leave, she handed them off to me. For an infant, it's almost $400 a week and for adolescents who just need Before and After care, you're spending anywhee from $180 to $250 a week. There's 4 weeks in a month, you do the math. It's too damn expensive, and it's ridiculous how they force working people to pay for a necessity like child care, and it's just so outrageously priced. But this couple just needs to get their incomes together. She isn't bringing in income, they live in Manhattan, he's only bringing in $65k and their rent is $5k a month. That's $60,000. And they're spending $5k on childcare? Like, the problem isn't childcare, you guys just have to find a lifestyle to fit your income. Your husband is making a very liveable wage. There are people who are making $48k, taking care of 7 people and they have a much cheaper rent and a bigger house. Reassess.

  2. Ok this is not that accurate people living outside their means is not the average America these people are rich when said she has a financial adviser it’s because they have money to play with because the other option is for her to quite work and live in a more inexpensive community

  3. If you’re not working then how can you justify $5k in childcare and say you don’t have enough money? Also, there are much cheaper apartments in NYC than $5k/month. CNBC only cares about the 1%.

  4. wait, only three kinds of childcare? I'm pretty sure there's some employers providing childcare so there's at least a fourth

  5. Gee i wonder why the birth rate America is going down. Have a family if we can't afford to raise them.

  6. And in Finland, Child care is free, Preschool is free, School is free, College is pretty much free, University is very Cheap, ALL Paid from tax money

  7. She should stay at home AND should’ve thought properly before having three kids. A single child can have much more facilities and love from their parents instead of dividing it among the three if you don’t have a good financial situation.

  8. These people deserve where they are and what they are paying. You made your bed, now you have to lay in it. Nobody is going to pay your bills because you chose to have kids without a plan. Most these people probably spend their money on crap like wants.

  9. Here's a solution….don't have kids! bwahahahahaha

    Oh and child care is so damn expensive because child care providers need to make a living too ya know.

  10. Don't reproduce. Problem solved. Recent UN report says there are too many humans already. Adopt preexisting kids or animals who are suffering without a loving family instead of reproducing them.

  11. On average, condoms cost about a dollar each, but it may be less or more depending on the brand, store, and package — most of the time largerpacks end up being a better value. Boxes of 3 go for about $2 to $6. In packages of 12 or more, condomsusually cost less than $1 each

  12. I was a child in the UK. I had my nursery school paid for because my mum and dad worked. Then I went to school and I had after school club till 6 and breakfast club from 6 am to 8 am for about 2-3 years. Didnt cost anything. Also I was at school for 12 hours a day inc breakfast club and after school club no cost at all

  13. That was my first thought when I started watching the video is if parents are paying 5k a month for daycares why the hell are the people working there making 11/hour. Thats so cruel

  14. First off if you're paying $5,000 a month in rent you need to re-evaluate where you live and after the first child if you knew it was that much maybe you should have used protection or gotten fixed

  15. My mom had a job that when I was born she was able to take me to work with her for a while. Then I was with my mom's best friend who was a stay at home mom who watched other people children after school ended. Her family was my second family. My mother didn't have to pay for childcare. Then when I became a preteen My mother got me a grandma in the way of a dependable old lady she knew who needed help with her work. And that was my first after school job. It didn't pay much but the food was amazing. And I learned a lot from her. She died but I will always keep an eye on her grandchildren for her.

    I respect my mother in her creative childcare. I was always loved and protected. And mother would never want to trust me to strangers. My older sister was almost killed by a fellow child at childcare on purpose.

  16. Basically everything in NYC is more expensive: taxes, child care, food, dog care, etc. But in this case they couple is living in an expensive neighborhood with not much income. The mom should either be working with pay, like anything is better than not getting paid. If not then stay at home with your kids. The dad also doesn't make that much to be able to provide for all this.

  17. I stay home with our kids and it’s been the best decision ever. My salary wouldn’t even cover 1 child in childcare.. then you have to factor in before and after school care. NOPE these are my kids and I will take care of them!

  18. "in Denmark the gov pays for childcare, but in America its the parents". hey dumb dumbs at CNBC, WHO DO YOU THINK FUNS THE GOV IN DENMARK? TAX PAYERS. TAX PAYING PARENTS. freakin morons.

  19. Damn just stay home with the kids until the youngest starts kindergarten. That's only a few years away. Or move them from being in day care full time to part time.

  20. it has to become more acceptable to stay at home with your kids. i dont care if its the mom or the dad. why bring your kids to a daycare to go to a job if the income from that job is less than the cost of being able to go to that job.

  21. Wow. Just their stroller alone is $2,000. Don't get me started on all the other high price and trendy baby gear. I'm guessing they are not good at managing their money.

  22. You’re already paying 5k/month for that apartment. Stay home with your kids and get your money’s worth!

    Being a stay at home mom would also save on formula if you’re able to nurse. You could even use cloth diapers to cut costs.

    She can create her business when her kids start school (that’s only a 5-6 year wait). These people have a common sense problem, not a money problem.

  23. The irony! Her company is “mom meetups” but she can’t find affordable child care? Maybe these moms should be taking turns babysitting instead of meeting up.

  24. Your rent is 5k and your childcare is 5k so that’s 10k a month they are wasting a month the one that works makes 100k a year. They easily had another option buy their own home which she claims they had enough to buy and watch their own children while the mother does her hobby at home with the children since she’s not bringing home a check thats not a job it’s a hobby.

  25. This type of lifestyle and huge pay difference between New York City and most of Middle America is the reason why the Electoral College is a necessity. There's a lot to be said about an ideology that dictates that $100,000 a year is close to poverty level.

  26. $11.17 an hour is the average net wage, which is higher than minimum wage, but they say it's not enough. But then it's literally higher than minimum. Gotta love logic.

  27. Something wrong here when you say you don’t have money.
    Second spouse working and paying more in day care than the salary. Wouldn’t one would stay home and save that money
    Why have a pet if you already are struggling with money. Pet cost money. Real money.


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