Rising costs impact consumer spending and
employment
The U.S. Department of Health and Human Services considers
childcare affordable at a reported 7% of annual household income
(HHI), but that bears little correlation to what parents are
actually spending. According to the Care.com 2022 Cost of Care
survey, 51% of families spend 20% or more of their annual HHI on
childcare in 2021, up from 31% of families in 2019, and 72%
spending at least 10% of their HHI on childcare, up from 70% in
2019. These expenditures are also having a domino effect on the
economy with families working, saving, and spending less.
The ninth annual Cost of Care survey from Care.com, the world’s
largest online destination for finding and managing family care,
reveals that 58% of families plan to spend more than $10,000 on
childcare this year compared to 45% pre-pandemic in 2019. This
increase in costs has caused a quarter (25%) of parents to change
jobs, slightly more than a quarter (26%) to reduce their work hours
and is a likely contributor to causing millions of women to leave
the workforce over the course of the pandemic.
“When it comes to childcare, there are three critical criteria –
cost, quality and availability – and based on our research
findings, we’ve not only failed to make progress as a country,
we’ve actually gone backwards,” said Natalie Mayslich, President,
Consumer, Care.com. “Costs are growing while availability is
shrinking and that’s having a profound impact on the workforce and
consumer spending. We’ve all seen what happens when parents can’t
work; making childcare more affordable and accessible has to be a
priority for all.”
CARE.COM 2022 COST OF
CARE SURVEY INSIGHTS
The economic impact of childcare
costs
Parents are adjusting significant aspects of their lives to
accommodate rising childcare costs, moves that have a broader
economic impact. On the work front, of the parents surveyed, 31%
are considering taking on a second job, 26% reduced hours at work,
25% have changed jobs, and 21% have left the workforce entirely.
When it comes to consumer spending, the majority of families (68%)
budget for childcare costs and nearly two-thirds (65%) say they
will stay within or under budget. However, nearly all families are
scaling back with 91% of respondents reporting having trimmed at
least one item to pay for increased childcare costs. Families are
reducing budgets for vacations and travel (51%), leisure activities
(51%), food and dining (45%), clothing (41%), and extracurriculars
(37%). And, not surprisingly, rising childcare costs are even
impacting family planning with 35% reporting they’re less likely to
have more children, and 43% citing the rising cost of childcare as
the main reason.
The pandemic effect
Childcare costs have been on the rise for some time, but the
pandemic sparked greater increases in a two-year period than have
occurred since 2015. Here is how childcare costs have increased
since before the pandemic began in 2019*:
- Average national weekly nanny rates are $694, up 23%
pre-pandemic.
- Average national weekly childcare center rates are $226, up 5%
pre-pandemic.
- Average national weekly family care center rates are $221, up
10% pre-pandemic.
- Average national weekly babysitter rates are $261, up 7%
pre-pandemic.
*based on weekly rate for one child
Of the parents surveyed, 56% plan to spend more than $10,000 on
childcare this year, up from 45% in 2019. And the pandemic effect
is evident beyond cost to availability of care as well, with 43% of
parents reporting greater difficulty finding childcare providers
over the past year. By care arrangement:
- 40% are having trouble finding a nanny.
- 39% are struggling to get care through a family care
center.
- 37% find it challenging to book a babysitter.
- 36% are facing an uphill battle with finding a quality
childcare center.
When asked what they believed was driving the cost increase, the
top three reasons cited by parents were increased costs at
childcare centers (46%), inflation (41%), and limited availability
at childcare centers (36%).
Care.com National
Average Weekly Rates*
2019
2021
2019
2021
One Child
One Child
Two Children
Two Children
Nanny
$565
$694
$585
$715
Childcare center
$215
$226
$409**
$429**
Family care center
$201
$221
$382
$420
After-school sitter
$243
$261
$246
$269
*All rates are for infant children, except for after-school
sitter, which is not age limited.
**Rates for two children calculated by adding the weekly rate
for one child and the weekly rate for the second child with a
national average sibling discount of 10%.
2022 Cost of care around the
country
Top 10 Most Expensive
States to Hire a Nanny
State
Weekly
Rate
$ Above
National Avg
% Above
National Avg
1.
District of Columbia
$855
$161
23%
2.
Washington
$840
$146
21%
3.
Massachusetts
$834
$140
20%
4.
California
$829
$135
19%
5.
Colorado
$763
$69
10%
6.
Oregon
$741
$47
7%
7.
New York
$736
$42
6%
8.
Connecticut
$734
$40
6%
9.
New Jersey
$715
$21
3%
10.
Vermont
$706
$12
2%
Top 10 Most Expensive
States to Use a Childcare Center
State
Weekly
Rate
$ Above
National Avg
% Above
National Avg
1.
District of Columbia
$419
$193
85%
2.
Massachusetts
$324
$98
44%
3.
Washington
$304
$78
34%
4.
California
$286
$60
26%
5.
Connecticut
$258
$33
14%
6.
New York
$258
$32
14%
7.
Arkansas
$255
$29
13%
8.
Maryland
$254
$28
12%
9.
Colorado
$254
$28
12%
10.
Oregon
$249
$23
10%
Calculate childcare costs by zip code with the Cost of Care
Calculator
The keys to mitigating
costs
While more than half (59%) of parents say they’re more concerned
about childcare costs now than in years prior, surprisingly,
they’re not availing themselves of tools to reduce the expense.
The Child and Dependent Care Tax Credit can save parents $600
for one child and $1,200 for two children, yet one-third of parents
(34%) did not claim the credit and 43% said they were unaware of
it. Accessing this credit requires parents to pay for care legally.
In addition, parents can save $2,000 per child using the Child Tax
Credit.
Similarly, a Dependent Care Flexible Spending Account (FSA)
offered by many employers allows parents to contribute up to $5,000
pre-tax which can be used towards care.
2022 Cost of Care Survey Methodology
This scientific sample of 3,003 US adults (18 years or older)
who are all parents paying for professional childcare was surveyed
between March 24, 2022, and March 30, 2022. All respondents are
parents of children 14 years or younger and currently pay for
professional childcare, confirmed by both consumer-matched data and
self-confirmation. DKC Analytics conducted and analyzed this survey
with a sample procured using the Pollfish survey delivery platform,
which delivers online surveys globally through mobile apps and the
mobile web along with the desktop web. No post-stratification has
been applied to the results.
About Care.com
Available in more than 20 countries, Care.com is the world’s
leading platform for finding and managing high-quality family care.
Care.com is designed to meet the evolving needs of today’s families
and caregivers, offering everything from household tax and payroll
services and customized corporate benefits packages covering the
care needs of working families, to innovating new ways for
caregivers to be paid and obtain professional benefits. Since 2007,
families have relied on Care.com’s industry-leading products — from
child and senior care to pet care and home care. Care.com is an IAC
company (NASDAQ: IAC)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220615005371/en/
Media: Mackenzie Nintzel PR Associate
Mackenzie.nintzel@care.com
Jamie Gentges PR Associate Jamie.gentges@care.com
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