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Is childcare in fact expensive? According to the article it "can top 15 percent of the median income for a married couple". But considering that taking care of

Is childcare in fact expensive? According to the article it "can top 15 percent of the median income for a married couple". But considering that taking care of children used to be a full-time job for a housewife, isn't it actually surprisingly cheap relative to historical standards? In general, if there isn't increased productivity because of technology, we shouldn't expect lower costs in terms of labor-hours consumed. See "Baumol's cost disease" (https://en.wikipedia.org/wiki/Baumol%27s_cost_disease https://en.wikipedia.org/wiki/Baumol%27s_cost_disease)

oberstein 11y ago
It's pretty expensive, my own informal surveying of people with kids suggests the 'good' childcare places are basically equivalent of an extra one-bedroom apartment per month per kid. Relative to historical standards, you had not only the housewife, but grandparents, other relatives, and even your neighbors in the immediate community to help share the burden.
- jon-wood 11y ago
  I'd say you're underestimating. Our son is with a childminder two days a week, and I could easily get a one bedroom place for that money. In the UK the last stats I heard suggested you need an income of £40,000 a year or more to break even on full time childcare.
merpnderp 11y ago
High quality child care is very expensive. The average daycare feeds your kids cheese puffs and processed foods and takes no special interest in customizing a child's experience. It is expensive to use child care that forgoes the state matching food grants (which encourage the cheese puffs), and focus on specialized care for your child.
- plonh 11y ago
  I have never seen a childcare that feeds cheese puffs.
mod 11y ago
I used to work in child-care. We charged $14/day for after-school care (4-5 hours), and the staff-to-child ratio was about 20:1. Counselors made < $10 hour. This was 2001-2007 or so. Child care was the biggest money maker at my organization, which was a fully-featured ymca with seasonal sports, fitness, olympic pool, gymnastics, rock wall, skate park, and 10 million in the bank. We had a pre-school, after-school, and summer camps. I can't speak to the % of net income that came from child care, but I think it was very large. I think given multiple children, it becomes very likely that it's better for one parent to stay home. They get to spend a lot more time with the kids at a very small financial difference.
- protomyth 11y ago
  You can only have a 20:1 with older kids. Infants and toddlers need more staff. The age mix is an important cost component. [edit http://eclkc.ohs.acf.hhs.gov/hslc/tta-system/teaching/eecd/Learning%20Environments/Planning%20and%20Arranging%20Spaces/edudev_art_00059_051606.html http://eclkc.ohs.acf.hhs.gov/hslc/tta-system/teaching/eecd/L... has space and staffing rules for EHS and HS which states tend to copy]
  - mod 11y ago
    We were allowed to have 30:1, actually (with 4 and 5 year old kingergarteners, any school-age kids). We typically kept about 20:1 until a time when we were trying to qualify for a higher standard, which required a 15:1 maximum. And occasionally my co-counselor would be gone and I'd have 50+ kids for the day. It went okay for me, but many of the counselors could not have managed that whatsoever. In fact, many of my later co-counselors couldn't handle any amount of children by themselves. Hard to work ability into a standard, of course.
    - protomyth 11y ago
      You are damn lucky you didn't have a fire or other emergency. I also recommend checking the insurance and local laws to find your personal liability in those situations.
Someone 11y ago
That basically is what the article says. I don't find it surprising at all. Do the math: if parents want one carer for every N kids, they have to pay 1/N-th of the costs of a carer. I guess that 10 is a conservative estimate for the value of N, taking into account holidays, sick days, and the fact that kids will be at the center for over 8 hours because parents have to do their own workday between dropping off and picking up their child. Also, parents do not want to make daycare look industrial, daycare needs a kitchen, beds so that kids can rest in the afternoon, etc. That means parents effectively have to pay for about half a second house for their kids, an extra set of toys, etc. and they want it all from 8AM-6PM, so daycare providers cannot run shifts to more efficiently use their facility. Edit: and don't forget income tax. Parents have to pay a daycare worker's income before tax from from their income after taxes. For me, that makes it clear that, at current price level, daycare workers cannot have a middle class income. Also, if they had, lots of people couldn't afford child care. And historically, child care wasn't a full time job. Housewifes also prepared food, cleaned the house, washed clothes, found time to repair clothing, went shopping, etc. Even with modern appliances, that adds up.
- jacalata 11y ago
  >For me, that makes it clear that, at current price level, daycare workers cannot have a middle class income. Also, if they had, lots of people couldn't afford child care. You're assuming here that the payment all has to come from the parents disposable income. Other countries (try to) address this with government or employer subsidies for childcare, eg in Australia http://www.humanservices.gov.au/customer/services/centrelink/child-care-rebate http://www.humanservices.gov.au/customer/services/centrelink...
  - e12e 11y ago
    Doesn't most countries finance school for older children partially or entirely through taxes as well (primary school)? Obviously, education is seen as a necessity both for (semi)functioning democracy, but also for any modern society to work. It seems odd that we're happy to take care of kids for free (or highly subsidized cost) from the age from 6 to 16 -- but somehow the years 1-6 needs to be paid for by parents? Are those 4 years really so much more expensive, that it wouldn't make sense to just roll that all up into one budget? I actually need to look at the arguments around this in Norway -- free school from the age of 6 to 18, along with a free college education isn't really an issue - and full coverage of child care services also have broad agreement -- but somehow simply making said childcare free seems to be much more contentious. Or perhaps just overlooked. I suppose one could make up microeconomic arguments along the lines of a solid education for all benefits all, while allowing all parents those extra 3-4 per child in the job market might not benefit all. Perhaps more interesting is the general trend that there's less work -- so having people spend some time off from work (with eg: pay from the government) might simply be a more efficient model going forward. But if we accept that free primary school is a good thing, I don't see how we can argue that free kinder garden isn't too.
geebee 11y ago
In San Francisco, full time day care can run about $2k a month - here's a link to the costs for the day care for faculty and staff at UC Berkeley ($1600-$2125, depending on the age of the child). Let's go with $1700 for the calcs, to keep it conservative. http://ece.berkeley.edu/facstaff http://ece.berkeley.edu/facstaff so, ($3,400 * 12) / .15 = $272,000 a year. There may be cheaper options, but seriously, fifteen percent sounds very low even for two income well paid families. And of course, at such an ultra wealthy income bracket, tax breaks have phased out far lower in the income scale. Another way to look at it is $3,400 * 12 = $40,800. Let's assume a 20% tax bracket (assuming one spouse makes a good income and intends to keep working), so it costs you $51,000 to go to work vs staying home. Even if you don't strictly lose money by working, that second income has to go way up before it's really worth it. There is one other factor, of course, which is career continuity. It may make sense to work essentially for 20% of your pay if it means that in 5-6 years, when the kiddos are older, you can rejoin the workforce at a higher income level, rather than trying to break in after an extended absence. Also, my numbers are a worst case scenario, where you have two small children in daycare at the same time, though of course spacing it out comes with a different set of problems. Add in the sky high cost of housing, and you can see how hard it is to raise a family in the bay area now. The best bet is actually to have one very high earning spouse (medical or nursing specialist, higher echelons of law or finance, some upper tech or managerial positions). $200k+ a year is a very different picture if it is all earned by a single spouse. Alternatively, for two very high earners (again in that 200k+ range), the percentage spent on childcare and basic housing starts to diminish to acceptable ranges. This is also why, ahem, I don't take claims of a labor shortage in SF seriously at "six figure" salaries if the salaries are barely above 100k.

oberstein 11y ago

It's pretty expensive, my own informal surveying of people with kids suggests the 'good' childcare places are basically equivalent of an extra one-bedroom apartment per month per kid. Relative to historical standards, you had not only the housewife, but grandparents, other relatives, and even your neighbors in the immediate community to help share the burden.

jon-wood 11y ago
I'd say you're underestimating. Our son is with a childminder two days a week, and I could easily get a one bedroom place for that money. In the UK the last stats I heard suggested you need an income of £40,000 a year or more to break even on full time childcare.

merpnderp 11y ago

High quality child care is very expensive. The average daycare feeds your kids cheese puffs and processed foods and takes no special interest in customizing a child's experience. It is expensive to use child care that forgoes the state matching food grants (which encourage the cheese puffs), and focus on specialized care for your child.

plonh 11y ago
I have never seen a childcare that feeds cheese puffs.

mod 11y ago

I used to work in child-care. We charged $14/day for after-school care (4-5 hours), and the staff-to-child ratio was about 20:1. Counselors made < $10 hour. This was 2001-2007 or so. Child care was the biggest money maker at my organization, which was a fully-featured ymca with seasonal sports, fitness, olympic pool, gymnastics, rock wall, skate park, and 10 million in the bank. We had a pre-school, after-school, and summer camps. I can't speak to the % of net income that came from child care, but I think it was very large. I think given multiple children, it becomes very likely that it's better for one parent to stay home. They get to spend a lot more time with the kids at a very small financial difference.

protomyth 11y ago
You can only have a 20:1 with older kids. Infants and toddlers need more staff. The age mix is an important cost component. [edit http://eclkc.ohs.acf.hhs.gov/hslc/tta-system/teaching/eecd/Learning%20Environments/Planning%20and%20Arranging%20Spaces/edudev_art_00059_051606.html http://eclkc.ohs.acf.hhs.gov/hslc/tta-system/teaching/eecd/L... has space and staffing rules for EHS and HS which states tend to copy]
- mod 11y ago
  We were allowed to have 30:1, actually (with 4 and 5 year old kingergarteners, any school-age kids). We typically kept about 20:1 until a time when we were trying to qualify for a higher standard, which required a 15:1 maximum. And occasionally my co-counselor would be gone and I'd have 50+ kids for the day. It went okay for me, but many of the counselors could not have managed that whatsoever. In fact, many of my later co-counselors couldn't handle any amount of children by themselves. Hard to work ability into a standard, of course.
  - protomyth 11y ago
    You are damn lucky you didn't have a fire or other emergency. I also recommend checking the insurance and local laws to find your personal liability in those situations.

Someone 11y ago

That basically is what the article says. I don't find it surprising at all. Do the math: if parents want one carer for every N kids, they have to pay 1/N-th of the costs of a carer. I guess that 10 is a conservative estimate for the value of N, taking into account holidays, sick days, and the fact that kids will be at the center for over 8 hours because parents have to do their own workday between dropping off and picking up their child. Also, parents do not want to make daycare look industrial, daycare needs a kitchen, beds so that kids can rest in the afternoon, etc. That means parents effectively have to pay for about half a second house for their kids, an extra set of toys, etc. and they want it all from 8AM-6PM, so daycare providers cannot run shifts to more efficiently use their facility. Edit: and don't forget income tax. Parents have to pay a daycare worker's income before tax from from their income after taxes. For me, that makes it clear that, at current price level, daycare workers cannot have a middle class income. Also, if they had, lots of people couldn't afford child care. And historically, child care wasn't a full time job. Housewifes also prepared food, cleaned the house, washed clothes, found time to repair clothing, went shopping, etc. Even with modern appliances, that adds up.

jacalata 11y ago
>For me, that makes it clear that, at current price level, daycare workers cannot have a middle class income. Also, if they had, lots of people couldn't afford child care. You're assuming here that the payment all has to come from the parents disposable income. Other countries (try to) address this with government or employer subsidies for childcare, eg in Australia http://www.humanservices.gov.au/customer/services/centrelink/child-care-rebate http://www.humanservices.gov.au/customer/services/centrelink...
- e12e 11y ago
  Doesn't most countries finance school for older children partially or entirely through taxes as well (primary school)? Obviously, education is seen as a necessity both for (semi)functioning democracy, but also for any modern society to work. It seems odd that we're happy to take care of kids for free (or highly subsidized cost) from the age from 6 to 16 -- but somehow the years 1-6 needs to be paid for by parents? Are those 4 years really so much more expensive, that it wouldn't make sense to just roll that all up into one budget? I actually need to look at the arguments around this in Norway -- free school from the age of 6 to 18, along with a free college education isn't really an issue - and full coverage of child care services also have broad agreement -- but somehow simply making said childcare free seems to be much more contentious. Or perhaps just overlooked. I suppose one could make up microeconomic arguments along the lines of a solid education for all benefits all, while allowing all parents those extra 3-4 per child in the job market might not benefit all. Perhaps more interesting is the general trend that there's less work -- so having people spend some time off from work (with eg: pay from the government) might simply be a more efficient model going forward. But if we accept that free primary school is a good thing, I don't see how we can argue that free kinder garden isn't too.

geebee 11y ago

In San Francisco, full time day care can run about $2k a month - here's a link to the costs for the day care for faculty and staff at UC Berkeley ($1600-$2125, depending on the age of the child). Let's go with $1700 for the calcs, to keep it conservative. http://ece.berkeley.edu/facstaff http://ece.berkeley.edu/facstaff so, ($3,400 * 12) / .15 = $272,000 a year. There may be cheaper options, but seriously, fifteen percent sounds very low even for two income well paid families. And of course, at such an ultra wealthy income bracket, tax breaks have phased out far lower in the income scale. Another way to look at it is $3,400 * 12 = $40,800. Let's assume a 20% tax bracket (assuming one spouse makes a good income and intends to keep working), so it costs you $51,000 to go to work vs staying home. Even if you don't strictly lose money by working, that second income has to go way up before it's really worth it. There is one other factor, of course, which is career continuity. It may make sense to work essentially for 20% of your pay if it means that in 5-6 years, when the kiddos are older, you can rejoin the workforce at a higher income level, rather than trying to break in after an extended absence. Also, my numbers are a worst case scenario, where you have two small children in daycare at the same time, though of course spacing it out comes with a different set of problems. Add in the sky high cost of housing, and you can see how hard it is to raise a family in the bay area now. The best bet is actually to have one very high earning spouse (medical or nursing specialist, higher echelons of law or finance, some upper tech or managerial positions). $200k+ a year is a very different picture if it is all earned by a single spouse. Alternatively, for two very high earners (again in that 200k+ range), the percentage spent on childcare and basic housing starts to diminish to acceptable ranges. This is also why, ahem, I don't take claims of a labor shortage in SF seriously at "six figure" salaries if the salaries are barely above 100k.