While wage growth remains low, the cost of child care continues to increase.
As a result, many American families are making big adjustments in the workplace to close the gap.
American families spend an average of $18,000 a year on care for their children.
And according to Care.com’s newest annual Cost of Care survey report, more than half of the families surveyed say they spend more than 10% of their household income on child care, while 20% of families say they spend a quarter of their income on child care.
To compare, TIAA recommends that people put at least 20% of their income away into savings. It’s unsurprising, then, that the top three things families say they do to cover child care costs are: save less money; stop saving money entirely; and save less for retirement.
The cost of child care impacts families in a number of other significant ways:
- A quarter of families say they have put themselves in new or further debt to pay for child care.
- 21% of survey respondents say they have waited to have children specifically because of child care costs. This statistic increases to 26% for younger parents.
- 67% of working parents overall say that child care costs have influenced their career decisions, while 72% of young working parents say the same thing.
- 43% of parents say they feel they have to work harder to make more money to cover child care.
- 34% of families say they worry about job security and the cost of care’s impact on their families financial future.
- 85% of working parents say they wish that their employers would offer child care benefits.
- 74% of families say their jobs have been impacted because their child care plans have fallen through. This resulted in having to use a sick day (78%), falling behind on work (37%) and even losing a day’s pay (28%).
The most common ways working parents say child care affects their careers are when they ask for flexible work schedules to save on child care, change jobs to increase pay, and switch from full-time to part-time in order to also save money, the Care.com survey found.
While some parents also choose to leave the workforce entirely to care for a new child (10%), as the Center for American Progress points out, the cost of doing this is significant.
Using the center’s interactive child care costs calculator, we can calculate that if the average female worker in America (according to the BLS, she makes about $39,000 annually) leaves the workforce at 26 (the average age American women have their first child) to care for her first child for a year, she loses out on more than $142,000 in total income, which includes lost retirement assets and benefits, lost wages, and lost wage growth.
Another study reported by The New York Times found that the average American lives just 18 miles away from his or her mother in part because of the cost of childcare.
These studies come at a crucial time for many Americans, especially for those who will be casting their votes in this year’s Presidential election. Both Hillary Clinton and Donald Trump have added child care proposals to their platforms this summer.
When asked how child care costs makes them feel, half of the families surveyed by Care.com said they wish the US would take a note from other countries and subsidise child care. A whopping 16% went so far as to say they’d move to another country that currently subsidizes child care.
Check out Care.com’s video for more breakdown of the report:
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