Child Care Costs Exceeds Rent, College Tuition in Many States: Study

The cost of child care surpasses the average in-state tuition for public colleges in 33 states and D.C.

The high cost of sending your child to college weighs heavy on the minds of many parents, but a new study reveals another financial burden many Americans families are facing — unaffordable child care.

Child care costs for families with two children exceed rent in four out of five communities across the country, according to the Economic Policy Institute’s study “High Quality Child Care Is Out of Reach for Working Families.”

The EPI, a non-profit workers’ advocacy group, found that child care costs for two-child families range from about half as much as rent in San Francisco to nearly three times rent in Binghamton, New York.

The study’s authors, senior economist Elise Gould and research assistant Tanyell Cook, gauge the cost of child care across the country and illustrate the difficulties families have in meeting the costs.

What it takes to get by varies greatly across the country. A family of four living in New York, New York, must earn a median annual income of $98,722 to secure an adequate standard of living, according to the EPI’s calculations of a basic family budget. Yet, with the minimum wage in the state at $8.75 per hour, two full-time working parents only make $36,400 annually — assuming both parents works 40 hours per week, 52 weeks per year.

In Dallas, Texas, the annual income necessary to ensure a modest standard of living is $61,150 for a family of four. But with a minimum wage of $7.25 an hour, the annual income for two full-time working parents falls short of securing an adequate standard of living by 50 percent.

This reality leaves few options for families, especially single mothers, with sparse financial resources.

The report points out that the U.S. Department of Health and Human Services recommends that child care cost no more than 10 percent of a family’s income. But according to the EPI analysis, nowhere in the United States does infant care or child care for a 4-year-old cost less than 30 percent of a minimum-wage worker’s annual wages.

In fact, a large share of annual earnings from a full-time, full-year minimum-wage job must be devoted to child care. In California, that share is 63.5 percent for an infant while in Washington, D.C. — the highest in the nation at 102.6 percent — a minimum-wage workers is unable to bear the expense of child care. That percentage drops 8 to 20 points if your child is still is a toddler.

“The fact that child care is such a large part of families’ budgets underscores the need for a government solution,” Gould said in a press release. “It will take bold policy action to make high quality, dependable child care accessible to every family that needs it.”

But lower income families aren’t the only ones feeling the pinch of high-cost care.

The finding, published Tuesday, reveal child care costs for a 4-year-old exceed the average cost of in-state tuition at public 4-year institutions in 24 states, as well the nation’s capital. Infant care expenses, meanwhile, exceed the average in-state tuition for public colleges in 33 states and D.C.

“The high and rising cost of college tuition is well known,” Cooke said in the study’s press release. “But surprisingly, child care is an equally if not more onerous expense. In more than half the states, child care is a bigger expense than even in-state tuition at a 4-year public college.”

Contact Us