60 Percent of Families Are Spending More Than Twice as Much on Child Care as What the U.S. Government Considers Affordable

60 Percent of Families Are Spending More Than Twice as Much on Child Care as What the U.S. Government Considers Affordable

By: Center for American Progress

Today, the Center for American Progress released a new issue briefanalyzing what families with children under age 5 are spending on child care. The study relies on new data released last month as part of the nationally representative Survey of Income and Program Participation (SIPP), which looks both at what families are spending on child care and types of child care arrangements on which families rely.

In addition to promoting economic growth, access to affordable early childhood programs is essential for helping parents stay in the workforce, encouraging healthy development and learning, and connecting families with important social services of which they may otherwise be unaware.

The brief raises serious concerns about how a lack of public investment in early care and education is increasing inequality—in terms of both wealth and access to quality early education programs—as high-income parents are increasing their investment in their children’s care and education at a faster rate than ever before. Key findings from the brief include:

  • Low-income families earning less than 200 percent of the federal poverty level are spending 35 percent of their income—or $188 per week—on child care; middle-income families earning between 200 and 399 percent of the federal poverty level are spending 14 percent of their income—or nearly $200 per week—on child care. Respectively, these families are spending five times and twice as much of their household income on child care as the U.S. Department of Health and Human Services has deemed affordable. Families in these income brackets account for 60 percent of all families with children under age 5.
  • Wealthier families earning more than 600 percent of the federal poverty level are spending 7 percent of their income on child care, despite the fact that these families are twice as likely to send their children to more costly licensed programs.
  • Nearly 8 in 10 families rely on relatives to arrange care for their young children—with grandparents serving as the most common relative child care providers. Specifically, about 56 percent of young children who need child care spend at least some time in the sole care of a grandparent.
  • Less than half of families—46.7 percent—utilize licensed child care.

“It’s unconscionable that low-income families in this country are spending five times what the U.S. government deems affordable child care,” said Rasheed Malik, senior policy analyst for Early Childhood Policy at CAP and author of the brief. “These findings send a clear warning to policymakers that failing to take bold action to improve access to quality, affordable child care could exacerbate income inequality at a time when working families are already struggling to get by.”

Just yesterday, the U.S. House of Representatives passed a spending bill that includes an additional $2.4 billion in federal child care funding. Last week, hundreds of child care advocates called on Congress to pass the Child Care for Working Families Act, which would limit child care payments to 7 percent of household income and provide free child care to low-income working families. Earlier this week, Sen. Elizabeth Warren (D-MA) also introduced a universal child care bill that would similarly cap child care payments.

Please click here to read “Working Families Are Spending Big Money on Child Care” by Rasheed Malik.