9 ms·

Is there a market failure in child care?

50 points by jseliger 4y ago

Eumenes 4y ago
The failure to me seems in outsourcing your child to a daycare, vs parents having flexible schedules to actually take care of your kid (either 1 with PT job or staying home FT, or both with flexible jobs). I understand this isn't popular in our culture these days, but I imagine it has many positive outcomes for the child and family.
- coffeebeqn 4y ago
  I’d love to do that but my software job is the thing keeping us afloat. And part time seems to not be a thing for devs
- vkou 4y ago
  Parents never did this when both of them worked. Grandparents did this. Unfortunately, these days, parents can't afford to keep living near the grandparents (because home prices have gone up too much, or because the grandparents are in a dead-end no-jobs town). Your options are to fix the housing market (By which, I mean, utterly destroy the value of existing homes[1]), or to make it possible for a single breadwinner to feed a family again (again, this is largely driven by the cost of housing) or to make due with the status quo. [1] That's going to be hugely popular among demographics that vote. /s
  - notch898a 4y ago
    Grandparents are now paid out via violence against the children (aka taxes) once they grow up. Why would they participate in raising the kid when the unspoken quid-pro-quo is no longer present and their benefits are guaranteed? There used to be significant bilateral benefit.
    - wins32767 4y ago
      I guess that's the state of the world today, where actual violence is rare enough that people start calling things that don't cause any bodily harm with the same term.
      - notch898a 4y ago
        Question: if I stop paying my taxes will the sheriff come with guns and toss me out? How many people want to find out? This happens with social security and other taxes too, just usually takes a bit longer and they wait until you owe a lot more. The violence is there, it's just under the polite veneer of pay up or get got.
        wins32767 4y ago
        Depends on the kind of taxes you pay. They can put a lien on your house, garnish your wages, etc. Eventually, sure they may put you in prison, but generally they aren't going to hurt you doing it unless you try to hurt them. You're just renaming coercive measures violence.
    - ROTMetro 4y ago
      And this is super abused by older people that didn't even bother adding their own children to society. Childless and less expenses their whole life, then the same societal benefits provided in old age as provided to people that contributed to society via childrearing.
  - duringwork12 4y ago
    Also a lot of the grandparents are way older since they did college instead of kids at 20 thing. It makes a difference my parents are both close enough but other than 1 hour maybe a month is taxing for them to watch my demonspawn.
  - esotericimpl 4y ago
    [dead]
- AllegedAlec 4y ago
  Pretty much. Parents in my neighborhood pooled together and made sure that one of them always had a day off to pick up the kids from school and home and feed them until the other parents got off work.
  - lazyasciiart 4y ago
    How many nine-month-olds were among that group?
    - AllegedAlec 4y ago
      None. This started after we started going to kindergarden. Before that my grandparents came over to fill in.
- wjamesg 4y ago
  Working parents send their kids to daycare out of necessity, it’s not a matter of being popular. Two working parents is also a necessity for many economically. Not everybody has the income and thus the convenience of having a stay at home parent. In your words, this is a failure of the parent, but I disagree.
  - danielvf 4y ago
    The cost of childcare services per child has a fairly hard floor on it. Working class families tend to have more kids in the US. Thus, the total expenses of childcare approx nets out around the same for a working class family as for an upper-middle class family. But the "higher class" family has a lot of extra income to be earned by having two parents working vs one. So its often bad economics for a poorer family to work two jobs and pay for regulated childcare. And good economics for a rich one. And this is how it works out in reality too. I checked a bunch of census stats, and the percentage of children in childcare facilities in the US rises steadily with family income. (interestingly enough, the percentage of children watched by their grandparents also rises steadily with family income too)
- morsch 4y ago
  It also has many positive outcomes for a kid to spend some time in a daycare with other kids its age, for some more so than others. Social capabilities, language capabilities, nourishment, ...
- dap 4y ago
  This doesn't match my experience. We've got two young kids. Both went to daycare from an early age (6 months or so). It's been great for everyone. I think there's pretty significant upside to the kids to spending time both with other kids and also with multiple different caregivers. It's also great for us adults to have interests/activities/ambitions (like, a career) outside of the kids. Not saying there are no downsides, but overall we're very happy with the decision. I'm not saying you're saying this, but there's this fallacy/myth out there that if you don't want to spend 24 hours a day (or all waking hours of the day) with your child and responsible for their well-being, then you're a bad parent or damaging them or something. It's possible to love your kids, enjoy spending time with them, be a great parent, and also find it exhausting or even untenable to be responsible for them all the time. There's also this idea floating around that people used to raise kids with an extended network of adult caregivers, and that that was good for everyone. That resonates with me. For people who don't have family around to help, daycare has sort of taken that place, for better and worse. (Daycare providers are not faceless service providers -- they become close members of your extended community!) The downsides of this are widely talked about. But I know folks who've had loads of family help ... with significant associated emotional burden.
  - jewayne 4y ago
    Yep. As always, we need to keep in mind that our natural social unit is not the nuclear family, but the tribe. Even two parents trying to parent a single child without the help of the tribe is essentially beyond our evolved capabilities.
- harryf 4y ago
  With all due respect, you sound like someone who doesn't have children. Most of the argumentation for "parents should stay at home and care for their kids" is based a different world to the one we now live in - a throwback to times where we lived in small communities and child raising was more a group effort with grandparents and relatives helping out. Today 56% of the worlds population lives in cities. That means childcare is essential for socialising a child. A child at home with a parent until kindergarten is probably going to spend the first 4 years of their life in a small apartment with one adult, bearing in mind that many young parents are generally not well off. This is not healthy situation for the child or the adult.
  - tetromino_ 4y ago
    > A child at home with a parent until kindergarten is probably going to spend the first 4 years of their life in a small apartment with one adult This is such a strange take. Do you really imagine you and the child will be locked up all day in your apartment? Most cities are not warzones or quarantine areas. Cities have playgrounds and parks, and the child will probably insist on going to one at the minimum daily. The local branch of the city library will have storytelling sessions at least once a week, likely more; and when the storyteller is done, there will be the shelves of early books your child will love to explore. Cities will have lots of kids of the same age group on your block, probably even in your apartment building; your child will inevitably play with them. There will be friends and relatives who will visit you and whom you will visit. Perhaps organized play dates with friends' kids who live further away. And some sort of local young family meetups, organized at the library or playground or via the local Facebook group. There will be parades, festivals, strolls through the historical center, beach days, museum visits, barbecues in the public park... Unless you make a deliberate effort to avoid all of that, your child will surely get socialized.
  - TheGigaChad 4y ago
    [dead]
- anonymouskimmer 4y ago
  Another alternative: In the modern economy how many employers have allowed their employees to take their very young children to work? I know that some large companies have experimented with childcare facilities at the office, but why not allow parents to take care of their children on the job? Sure it's disruptive, but it should be manageable in many cases.
oh_sigh 4y ago
How about just a tax deduction for qualified childcare costs up to a certain amount? Parents usually want to vet their child care and not just ship their child to whichever person is offering the lowest rates for the day.
- Rafuino 4y ago
  You can fund a dependent care flexible spending account with pre-tax dollars up to $5000 per household currently. That will cover ~2 months of care where I live, but I guess it's better than nothing at all...
- briHass 4y ago
  There is one: dependent care tax credit. Admittedly, it's not much, with a max of 3K per child (total max 6k), less if you make more money. There's also the regular child tax credit of 2K per child.
cld8483 4y ago
Market failure? The demand for child care is a social and economic failure. Stay-at-home parents are no longer feasible for most families.
- mfer 4y ago
  Is the situation where stay at home parents, in a two parent household, being unfeasible a majority of the time a market failure?
  - kenmorechalfant 4y ago
    Without a doubt in my mind.
  - serf 4y ago
    I think the choice to have children without ample time for child-care is a failure, but i'm not wholly convinced that it's the market that drove it completely -- more like it's driven by a poor decision making process by the parents. Historically day-care has been a service used by very poor single parents so that they can maintain a work schedule, or the affluent that want some free time away from the kids. With that said, I can totally understand why there isn't a very good way to balance that market that's split between the 'well-off' and the desperate. My point is, which unfortunately isn't a popular one, that the parents are ultimately at fault for creating a financial burden that they have difficulty (in this economy, at this time) coping with. There is no stork-drop, it's their fault -- and this expectation for affordable childcare , which I hope becomes a thing sooner rather than later for the sake of the kids , is born from an inability to cope with poor planning and impulse control, and comes off as entitlement after thousands of years of parents' raising kids without a third party involvement. I think fewer and fewer people view the raising of children as a privilege, and it's shifting into a given. That's a problem. P.S. yes, I know third-party child-care isn't new, but the drive to provide it for every mother is.
    - chii 4y ago
      > after thousands of years of parents' raising kids without a third party involvement. historically, the extended family like grandparents, are the ones taking care of children while working age parents go out to actually work (the fields). Historically, this works, because you tended to live with the grandparents, at least for a while - the household is multi-generation. The recent "privilege" of buying your own separate home away from your own parents, before having children, is new. And if these people aren't rich enough to afford child care, it's because they've overstretched - they ought to really live with their parents imho (and make sacrifices like the old generations did).
notch898a 4y ago
Hilarious to call it a market failure. If you deregulate childcare, something or another will appear at every price point. You may not like some of those solutions, but they'll exist.
- klyrs 4y ago
  In markets without regulations, disreputable daycare will straight up sell children. Doesn't quite qualify as "hilarious" in my book.
burneraccountt 4y ago
Lol. Yes. The failure is treating child care like a market.
- ch4s3 4y ago
  Is it not a service that can be provided by someone outside of the immediate family? Should those caregivers not be paid? If yes to both, that is a market. If you provide it as an entitlement, you still need some mechanism to know how many (coarsely put) units of child care to produce. [*edit] for the down-voters, I'm curious what is your disagreement here?
  - deleted 4y ago
    [deleted]
  - ilikerashers 4y ago
    The government can step in to fund areas that shouldn't be a free-for-all market. Parents struggling to pay for childcare is the government saying a parent's job is to stay at home if they can't cover childcare. It's a big issue in the UK and likely to be key in the next election as prices have gone sky-high.
    - ch4s3 4y ago
      There's still a market there. There's demand which will be HIGHLY sensitive to the price government sets, and labor which is in many OECD economies in short supply.
  - anonymouskimmer 4y ago
    I would guess that some people are disagreeing that this particular service is seen by most purchasers of it as a commodity. Others are probably disagreeing because they're conflating "market" with "free market", and this sort of service has a bunch of constraints from all sides.
    - ch4s3 4y ago
colinrand 4y ago
Markets are not oriented to solve problems for social and societal needs, that is supposed to be the government for the people's concern. If we as a society want this solved, and the government of the people for the people does not, this represents a failure of the social contract to be governed.
adam-_- 4y ago
You don't just take a punt on a childcare provider like you might with temporary accommodation on AirBnB. From personal experience and those of other parents I know, it's a heavily researched, quite intensive process involving multiple visits to different providers. An AirBnB for long-term childcare seems like a non-starter, perhaps beyond initial discovery and shallow research. --- Also, there are so many societal benefits to affordable child care for all. For example, more primary care givers returning to work, earning and therefore paying taxes etc.
- mitchellst 4y ago
  Yeah my first thought reading this was… does this dude have kids? Because this isn’t how the parents I know think of it, and not how I think of it. But I also have income that gives me choices— the option I chose is “employ a full time nanny.” Curious if he is closer to right than we are.
mindvirus 4y ago
A few thoughts: 1. Waitlists are a scam. In NYC, it's ~$150 non-refundable just to apply, and daycares won't tell you how long their waitlist is (and per the article, are often over subscribed). I wish there was legislation that these are refundable, or capped at ~$20 or so. 2. The cost of daycare here is around $2500/kid. So with two kids, you're looking at $60k/year, which is $100k pre-tax. And so if you have two kids, work, and make less than $100k/year it makes sense to stop working. And really, the real number is probably closer to $140k/year, since who would work to just break even on childcare and not see your kids?
- notch898a 4y ago
  There are a number of people who will never admit this on a public forum, but they are taking their kid to some illegal immigrant in the ghetto and paying 1/3 of that.
  - anonymouskimmer 4y ago
    When I was a child my daycare was the house of a person who lived in the neighborhood. I wonder how much this sort of thing is regulated away now.
    - creaturemachine 4y ago
      They can regulate all they want, this is still a popular and often necessary option.
  - em500 4y ago
    There are also a number of people who will never admit this on a public forum, but they prefer their paid job over watching their own children all day, sometimes even if it pays less.
- denimnerd42 4y ago
  I think people do work to break even or even worse. You only need childcare for 4 or 5 years until the kid is old enough to go to public kindergarten. If you are 25 and take a break from the workforce for 5 years you are going to obliterate your career. meanwhile if you had been working at say 25 in NYC at 100k/year and kept working w/ the support of childcare then by 30 you could be making 150 or 200k/year. If you had stopped working 5 years you would be lucky to find that same 100k/year job again. By 30 you still have about 35 years of your career left. I wouldn't want to stunt that growth early on.
blactuary 4y ago
This is a classic case of Baumol's cost disease. There isn't really a way for productivity to increase in the child care sector, you're always going to need a similar ratio of workers to children, but those workers also need their wages to keep up with inflation. The way it plays out in the US is everyone loses: the employees are underpaid, the employers are low-margin, and it is still too expensive for families. Child care companies can't pay the workers a fair wage while remaining profitable and keeping prices low enough for families, so we end up in this awful equilibrium where it sucks for everyone.
- Rafuino 4y ago
  Sounds like it's an industry that should be provided as a public service then (or at least subsidized), not something that a free market can sustain. https://www.nytimes.com/2021/10/06/upshot/child-care-biden.html https://www.nytimes.com/2021/10/06/upshot/child-care-biden.h...
  - blactuary 4y ago
    I agree, given what I laid out it's not something the market can provide
- anonymouskimmer 4y ago
  > Baumol's cost disease. I don't think wages in the childcare industry are increasing noticeable relative to wages in other sectors. As a person mentioned elsewhere, other factors such as rental prices and insurance probably add more to the cost than wages.
  - blactuary 4y ago
    Of course they aren't, like I said above the workers are way underpaid. The Baumol effect means that wages have risen more than the underlying increase in productivity, which like I said can't really increase in child care, you need X workers for Y kids, there's no productivity gains to be had. And that's not on the workers themselves, it's just basic arithmetic. Needing to increase the wages of the workers beyond any increase in productivity either means higher prices for parents or lower profits for the business. In this case we have both, which is why the market can't really sustain itself. Daycare companies have to give their workers some increase in wages over time, without getting more work out of them, but in order to charge parents even more than the already insane prices, they've held them down to some extent. So like I said, everyone loses.
kube-system 4y ago
> Suppose that the parents have two children who need child care. That is $540 per week. The parent salary has to be at least $540 per week to make the choice of child care economical. But that does not take into account taxes. Even worse than that, it doesn’t take into account commutes, and the opportunity cost of not spending time with your own kids. If you make just enough money at work to pay for childcare, what the heck are you doing?
- texaslonghorn5 4y ago
  > If you make just enough money at work to pay for childcare, what the heck are you doing? $540/40hrs = $13.5/hr. Any number of jobs pay this little.
  - protonbob 4y ago
    That's take home pay. With taxes it's much higher.
    - texaslonghorn5 4y ago
      so based on empirical observations I am sure there are a number of people who are making barely enough to support the child care cost quoted in the post I quoted. maybe I misinterpreted the post I responded to
    - evan_ 4y ago
      then you also need to factor in tax rebates for childcare, which won't cover 100% but it will lessen the impact
  - kube-system 4y ago
    LOL. I meant that rhetorically, not literally. I am suggesting that it is a bad life choice to work a job and then spend every penny paying someone else to take care of your kids for you.
- alocasia-1 4y ago
  I know you're being rhetorical, but often, just trying to avoid a gap in your resume. It sucks but there can be a greater long-term cost to trying to reenter the workforce after taking years off to raise kids.
monero-xmr 4y ago
We paid a lot of money for childcare when there was a (possibly illegal) daycare a few apartments down with a lady watching a bunch of kids. She only wanted $500 a month but we paid $2000 to an expensive one. Imagine advocating for cut rate care for your own children. Considering I’m leaving my most priceless thing with strangers it isn’t crazy to me that it’s expensive.
- notch898a 4y ago
  A significant part of what you were paying out is liability insurance etc and not necessarily better care.
  - monero-xmr 4y ago
    I don’t mean to say I want the illegal daycare outlawed. I’m sure the lady was fine. I just think it’s absurd that we expect daycare to be cheap when you are entrusting the most valuable thing in your entire life to strangers. People think this should be free?
    - anonymouskimmer 4y ago
      > I just think it’s absurd that we expect daycare to be cheap when you are entrusting the most valuable thing in your entire life to strangers. They aren't strangers if you take the time to get to know them, and their current customer families, beforehand.
  - creaturemachine 4y ago
    And some nice fat corporate profits. The lady down at the corner might not be as illegal as you think. Many jurisdictions allow for at-home day care, usually capped at a certain number of kids per caregiver, and it's much lower than the head-count at the corporate ones.
- ahtihn 4y ago
  Consider what you're actually getting for the price difference and where the extra money goes. Probably most of it doesn't actually go to the employees, so are you sure that paying more makes any real difference?
billconan 4y ago
While I don't have children of my own, my ex-girlfriend used to manage a daycare center. The fees charged to parents were quite high, while the salaries of the teachers, including my girlfriend's, were surprisingly low. It appeared that the primary expense was the cost of renting the property. In my opinion, the government should provide financial support to these facilities, particularly in the form of reimbursements for education infrastructures.
- anonporridge 4y ago
  This doesn't lower the costs, it just causes all taxpayers, including childfree adults, families with a stay at home parent, and families with older children, to subsidize the cost of childcare for those families where all adults are working full time. You could even hypothesize that this extra tax burden ends up being enough to force some stay at home parents get a job and put their children in childcare, creating a vicious cycle. That's not obviously bad, but we should talk clear eyed about whether that's the right social contract to enter.
- hrunt 4y ago
  I worked with a daycare on a building project, and I saw how amazingly expensive childcare is. The teachers are paid what many would consider to be barely a living wage, but property costs and especially insurance were substantial. The owners did it our of their love of doing it, not because because of typical financial goals. Yes, they could raise their rates, but if they did, many parents would have had to go elsewhere. It was a balancing act to charge enough for the quality they wanted to provide while also being able to be affordable for the community they served. Most teachers were younger, and did not last very long (two years at most).
- jrumbut 4y ago
  My aunt runs a very well regarded (and fully licensed, insured, etc) childcare business out of a building she inherited and it's a subsistence living. Complying with regulations, dietary restrictions, allergies, little special requests that all seem reasonable in isolation, replacing supplies, etc, etc. It's basically the opposite of a software business, it doesn't scale. She could do better for herself by raising rates (she has parents coming to reserve spots pre-conception), but she can't bear the idea of pricing out hard working people. There are some things that probably don't work as businesses, even with subsidies, and if we want another generation of kids we probably have to think outside the market box. We have free school for older kids, and maybe we could just extend public schools to age zero, but what about subsidizing new parents to stay at home and actually bond as a family? Or cooperatives of parents to take care of each other's kids on a shift basis? It would be cool to see this kind of creative thinking.
secabeen 4y ago
This is a pretty good distillation of the math. Child care has often been done on the backs of underpaid lower-class workers. Unlike most businesses, childcare doesn't scale well at all, and it's very hard to make the math work to pay the staff a living wage without it being prohibitively expensive. Even in the example given, the $22.50/hour rate is just the break-even rate with child-care workers at the minimum wage. If you push them up to a living wage of 75k/yr, the listed cost doubles. Add again people wanting child care costs to not just be break-even but to make working feel worth it, and it probably doubles again. It's just a very hard business with difficult scaling. It gets better after age 2, when you can increase your student/staff ratios, for what that's worth.
- BaseballPhysics 4y ago
  Which is precisely why government subsidies for child-care are necessary if we're going to structure society around nuclear families with both parents working. The cost of labour alone is enough to explain eye watering child-care costs, which means you either a) push that cost back on the consumer, b) somehow drive down the cost of labour, or c) have the government subsidize the cost of labour to make the price affordable and the businesses sustainable. We're doing (a) now and it's not sustainable, hence articles like these. To achieve (b) you'd need government intervention, anyway, as the market is already optimizing for minimizing labour cost. And thus you're left with (c), which is the path Canada has started going down recently: https://www.canada.ca/en/employment-social-development/campaigns/child-care.html https://www.canada.ca/en/employment-social-development/campa...
  - xvaier 4y ago
    You'll notice that Québec is not on the map when they compare potential savings because we've had government subsidized daycare for over 25 years. The results have been increased participation of mothers in the workforce and increased GDP[1]. The same article explains that the ROI is about 47%, meaning that for every 100$ spent, the federal and provincial governments get 147$ back in increased productivity. 1. https://ici.radio-canada.ca/nouvelle/557405/garderie-subventionnees-rentables https://ici.radio-canada.ca/nouvelle/557405/garderie-subvent...
PretzelPirate 4y ago
For anyone interested in the cost of child care and how broken the current systems are, there's been some great work happening in Texas to understand solutions which has been driven by research and feedback from childcare workers, childcare company owners, childcare advocacy groups, and parents: https://pn3policy.org/resources/workgroup-recommendations-to-inform-the-2022-texas-child-care-workforce-strategic-plan/ https://pn3policy.org/resources/workgroup-recommendations-to... I'd recommend reading the linked briefs for a high level overview.
lawlesst 4y ago
I live in one of those cities that regularly makes the best places to live lists. I’m not able to get a spot in a before or after school program for my children, regardless of price. The one child center that serves the school has already filled their slots for the fall. Seems like this well educated, high income market is still organized around one parent not working full time or a grandparent living nearby.
- wjamesg 4y ago
  I completely agree. There is an assumption of one or the other and not enough childcare supply to meet the true demand of two working parent communities.
klyrs 4y ago
The "market failure" is that daycare is a low-margin business that needs to service cash-strapped parents near where they live. The "market" that's been keeping wages stagnant while cost of living, especially cost of land, has been skyrocketing. That policy wonks are laser-focused on the "market" is the problem. This is one aspect of the capitalism-fueled social collapse.
mariojv 4y ago
Costs are really out of control. My friends in a relatively low cost of living city (San Antonio, TX) are going to pay upwards of $1200/month for daycare for their soon to be 6 month old, once their family member providing childcare needs to return home. That's essentially an extra mortgage payment in this part of the state. There are also very long waiting lists, so long that my friends are encouraging families to get on waiting lists prior to conception! This is all anecdotal, but I believe they did their research on this given their childcare needs.
- wjamesg 4y ago
  I pay $1200/mo per kid in NC
  - Balgair 4y ago
    That's a good price in most metros.
com2kid 4y ago
An interesting factoid is that Nanny share, split 3 ways, costs the same, or less, than daycare. The only disadvantage of nanny shares is the unreliability, when one family drops out the other families have to work hard to fill the vacancy, which involves doing what amounts to personality interviews. New daycares, at least in Seattle, also have huge costs associated with property. Basically the majority of existing home based daycares have been around for awhile, since land prices prohibit opening any new locations. E.g. buying a "house" for daycare would cost $4000 a month in mortgage payments at minimum, which sort of ruins the finances. Lots of exceptions and such of course to quibble over, but after spending over a year looking at daycares, very few new locations are opening. Figure 4k a month, at 15 kids, is $266 of the expenses. Labor is of course the main problem, but labor costs are high because living in cities is so expensive, and that is expensive largely because housing is expensive. When touring daycares I like to talk to the child care providers one on one w/o management there, and I always ask how well they are treated. Universally they have said that the large chain locations treat workers badly, and that you also get what you pay for with the higher priced providers, workers who are paid better (but not great), are also treated better, stay around longer, and burn out less. > GONZALEZ: You need one teacher for every four infants, at least. Infant care is obscene. This is where long childcare leave can help, if parents both have 6 months off at 100% salary, that gets the kid through the first year, after which childcare becomes a lot more reasonable. There is another huge drop off in complexity at 18 months, but I don't see a good way of getting families to that mark. Lots of daycares do 18m+ because the logistics are just way simpler.
bglazer 4y ago
It’s a social failure that we put the cost of caring for very young children exclusively on the shoulders of their young parents. As a society, we collectively pay for the healthcare of old people as a shared burden spread across our whole lives. We do the same for care of children ages 6-18 via public schools. You have kids age 1-6? Tough shit, pay up.
dap 4y ago
As a parent of two young kids in daycare, this feels very disconnected from reality. The most glaring issue is the discussion of childcare providers as though they're totally fungible. Now, I have no idea how representative my experience is, but the parents I know are interested in things like: cost, location, holidays/time off (lots of places near me take 5-6 weeks off per year -- that's kind of a big deal for people who work full time), hours provided, whether food is provided, what the environment is like, policies around when sorta-sick kids can attend, the experience of the providers/teachers, being able to send siblings to the same place, parent community, safety record...I could go on. Some of these are luxuries, but many affect one's ability to work a full-time job (which is the point of daycare for a lot of people). My experience is that places that tick all these boxes have waitlists. Many other places don't. Despite there being lots of places with availability, parents around here still feel like it's hard to find daycare. (There are other fallacies here, too -- like the idea that some centralized broker is an efficient solution. Monopolies efficient? And if you have a competitive market for the brokers, that seems to undermine a lot of the benefit, or at least make this idea much more complicated.)
- bknight1983 4y ago
  There’s also the debate around a corporate daycare (Bright Horizons, Goddard, Primrose) and at home daycare. I was a child of at home daycare by one woman who is literally my second mother (was present for all the big moments and was there emotionally for me). It also means it was a single point of failure; if Penny was sick, on vacation, then my parents were SOL. A more corporate daycare gives you the reliable daycare but at the cost of your child being a number.
mlsu 4y ago
With nearly any of our social ills, the answer is housing. - The people taking care of children at daycare make pennies; most of the revenue goes to a landlord. It's very expensive because you can't just move the daycare 1.5 hours out to the outskirts of town; you actually need to pay for real estate near where people live. - Grandparents, extended family cannot afford to live near their working children. - Anyone with a hint of upward mobility needs to move to an area where they can get their foot in the door of the financialized housing market. They move away from their friends and family, and then when they have kids they don't have a support network. - 2x full time incomes are needed to afford rent where work is available, leaving no time for childcare. Nobody who works part time can afford to rent. - It's impossible to make rent working part time in any city anywhere. Very difficult even with 1.5x income parents. - Commutes are much longer, increasing the burden of childcare. Lack of housing supply near work -- because of policies that benefit existing property owners. All of these have one answer: HOUSING SUPPLY. let people build more housing. That's it! Very simple!
- jderick 4y ago
  Or even better, remote work.
  - MathMonkeyMan 4y ago
    Not enough, but it helps.
- pyuser583 4y ago
  I mean lots of daycare is in-home daycare.
- Beaver117 4y ago
  But if everyone has access to housing how will the poor landlords get their passive income?
- notenoughhorses 4y ago
  Or alternatively, to add to the list, working parents cannot afford to live near grandparents. They bought in the 1980s.
andjd 4y ago
> This seems like a project an entrepreneur ought to try and take on. In a market where there is an affordability crisis, why would we want to add a tech entrepreneur as a middle man who will want to take 30% off the top for "owning" the relationship between customer and provider (like DoorDash, etc)? You see a little of this with corporate day care centers (e.g. Bright Horizons), and these operations charge a substantial premium over independent providers. They just have a higher cost structure, and greater demands to make returns for their investors. In NYC, the cost of sending just one child to one of these is close to hiring a nanny. I agree that it's probably not reasonable to call wait-lists a market failure when having excess capacity in the market would require rates to increase to a level the market is unable or unwilling to bare.
xyzelement 4y ago
As a markets guy this logic makes sense, but as a parent it misses enough context to not be useful. First, the market for child care that we face as individuals is one largely of our chosing. In a macro sense, we make choices to live close or far from family, to be in a close knit community or not, etc. In a micro sense, are we comfortable with an off the books nanny coming to the house, or dropping the kids off at some illegal community grandma's house every day? In NYC, no poor person deals with the "$150 just to get on the waiting list" type of child care. The people who engage with that are people who chose to raise kids in the city and want a certain type of "formal" daycare. These people also make enough that the cost/benefit obviously makes sense to them. These are also people who would never use a broker because they don't consider daycare a fungible good. It's not like sourcing a trading venue for your sovereign bonds - by the time you are playing this game, you have very specific expectations about the philosophy of education, setting, religious context, etc. Meanwhile, the poor people already have grandma living in the house, she gets SSI so the daycare is subsidized. And if there's no grandma in your house, there's one next door who'll keep an eye on your kid too for a couple of bucks an hour. This is a very interesting example of where religious communities outperform the secular. For example in NYC is not uncommon to meet Orthodox Jews with 10+ kids. The secular can't relate to what it's like to have to deal with child care for 10 kids. But in those communities, it's routine - your family and neighbors help you out and you get through it. The fact that as seculars we fail to achieve that for ourselves is an interesting signal in my opinion.
rrherr 4y ago
"Let us assume that the parents get neither utility nor disutility from spending time with their infants." Umm...
danesparza 4y ago
How is a backlog the sign of a market failure? If anything, this shows a responsible way to manage demand while still maintaining power over the transaction. It also serves as a subtle threat to parents: "Cooperate, or we will send you on your way and contact the next person on the waiting list". Also: Didn't Nintendo set out to create these dynamics with their console launches? Don't they intentionally manage overhead by creating a waiting list?
- Balgair 4y ago
  Generally in economics, if there is a waitlist, then the business is not charging enough. Hence a failure. The reasons for this failure are discussed by other people here. One thing to keep in mind is that this is almost exclusively a US problem. Nearly all other countries have significantly more time off for infant care. And as infant care is the most expensive part of daycare most other countries don't have such issues (toddlers subsidize infants in most daycares)
throwawaygal7 4y ago
Childcare is never as good as time with a parent. We sacrifice our time with our children for future career earnings to maximize lifetime income. People in this discussion throw around terms like GDP growth due to increased labour market participation from working moms... It's ok just to accept what's happening. its not like you don't know what you're doing. Life is full of unpleasant tradeoffs.
- maximus-decimus 4y ago
  I think you're overestimating how good parents some people are. In Quebec they moved kindergarten down to 4 years old because they realised some kids are very "under-stimulated" at home and it sets them for failure for their whole academic career.
eddr 4y ago
At the risk of this seeming like self promotion, this is exactly the problem we're trying to solve at tiney.co We believe the answer to the childcare supply crisis is home-based care. Our platform (which is regulated in the UK) exists to enable people to set up as a home-based childcare provider (in the UK these are called 'childminders', which is a somewhat derogatory name for a highly skilled professional educator!). We then make it easy to run the business through payments, invoicing, educational tools and training, marketing, etc. We're working on the UK market first but we believe this is a global issue and have our eyes on other countries in the future. If you'd be interested in chatting or learning more about what we do, you can reach me by email on edd@ on the above domain name :) (And we're also hiring remote full stack engineers if you happen to be interested in joining the mission.)

50 points by jseliger 4y ago

The failure to me seems in outsourcing your child to a daycare, vs parents having flexible schedules to actually take care of your kid (either 1 with PT job or staying home FT, or both with flexible jobs). I understand this isn't popular in our culture these days, but I imagine it has many positive outcomes for the child and family.

coffeebeqn 4y ago
I’d love to do that but my software job is the thing keeping us afloat. And part time seems to not be a thing for devs
vkou 4y ago
Parents never did this when both of them worked. Grandparents did this. Unfortunately, these days, parents can't afford to keep living near the grandparents (because home prices have gone up too much, or because the grandparents are in a dead-end no-jobs town). Your options are to fix the housing market (By which, I mean, utterly destroy the value of existing homes[1]), or to make it possible for a single breadwinner to feed a family again (again, this is largely driven by the cost of housing) or to make due with the status quo. [1] That's going to be hugely popular among demographics that vote. /s
- notch898a 4y ago
  Grandparents are now paid out via violence against the children (aka taxes) once they grow up. Why would they participate in raising the kid when the unspoken quid-pro-quo is no longer present and their benefits are guaranteed? There used to be significant bilateral benefit.
  - wins32767 4y ago
    I guess that's the state of the world today, where actual violence is rare enough that people start calling things that don't cause any bodily harm with the same term.
    - notch898a 4y ago
      Question: if I stop paying my taxes will the sheriff come with guns and toss me out? How many people want to find out? This happens with social security and other taxes too, just usually takes a bit longer and they wait until you owe a lot more. The violence is there, it's just under the polite veneer of pay up or get got.
      - wins32767 4y ago
        Depends on the kind of taxes you pay. They can put a lien on your house, garnish your wages, etc. Eventually, sure they may put you in prison, but generally they aren't going to hurt you doing it unless you try to hurt them. You're just renaming coercive measures violence.
  - ROTMetro 4y ago
    And this is super abused by older people that didn't even bother adding their own children to society. Childless and less expenses their whole life, then the same societal benefits provided in old age as provided to people that contributed to society via childrearing.
- duringwork12 4y ago
  Also a lot of the grandparents are way older since they did college instead of kids at 20 thing. It makes a difference my parents are both close enough but other than 1 hour maybe a month is taxing for them to watch my demonspawn.
- esotericimpl 4y ago
  [dead]
AllegedAlec 4y ago
Pretty much. Parents in my neighborhood pooled together and made sure that one of them always had a day off to pick up the kids from school and home and feed them until the other parents got off work.
- lazyasciiart 4y ago
  How many nine-month-olds were among that group?
  - AllegedAlec 4y ago
    None. This started after we started going to kindergarden. Before that my grandparents came over to fill in.
wjamesg 4y ago
Working parents send their kids to daycare out of necessity, it’s not a matter of being popular. Two working parents is also a necessity for many economically. Not everybody has the income and thus the convenience of having a stay at home parent. In your words, this is a failure of the parent, but I disagree.
- danielvf 4y ago
  The cost of childcare services per child has a fairly hard floor on it. Working class families tend to have more kids in the US. Thus, the total expenses of childcare approx nets out around the same for a working class family as for an upper-middle class family. But the "higher class" family has a lot of extra income to be earned by having two parents working vs one. So its often bad economics for a poorer family to work two jobs and pay for regulated childcare. And good economics for a rich one. And this is how it works out in reality too. I checked a bunch of census stats, and the percentage of children in childcare facilities in the US rises steadily with family income. (interestingly enough, the percentage of children watched by their grandparents also rises steadily with family income too)
morsch 4y ago
It also has many positive outcomes for a kid to spend some time in a daycare with other kids its age, for some more so than others. Social capabilities, language capabilities, nourishment, ...
dap 4y ago
This doesn't match my experience. We've got two young kids. Both went to daycare from an early age (6 months or so). It's been great for everyone. I think there's pretty significant upside to the kids to spending time both with other kids and also with multiple different caregivers. It's also great for us adults to have interests/activities/ambitions (like, a career) outside of the kids. Not saying there are no downsides, but overall we're very happy with the decision. I'm not saying you're saying this, but there's this fallacy/myth out there that if you don't want to spend 24 hours a day (or all waking hours of the day) with your child and responsible for their well-being, then you're a bad parent or damaging them or something. It's possible to love your kids, enjoy spending time with them, be a great parent, and also find it exhausting or even untenable to be responsible for them all the time. There's also this idea floating around that people used to raise kids with an extended network of adult caregivers, and that that was good for everyone. That resonates with me. For people who don't have family around to help, daycare has sort of taken that place, for better and worse. (Daycare providers are not faceless service providers -- they become close members of your extended community!) The downsides of this are widely talked about. But I know folks who've had loads of family help ... with significant associated emotional burden.
- jewayne 4y ago
  Yep. As always, we need to keep in mind that our natural social unit is not the nuclear family, but the tribe. Even two parents trying to parent a single child without the help of the tribe is essentially beyond our evolved capabilities.
harryf 4y ago
With all due respect, you sound like someone who doesn't have children. Most of the argumentation for "parents should stay at home and care for their kids" is based a different world to the one we now live in - a throwback to times where we lived in small communities and child raising was more a group effort with grandparents and relatives helping out. Today 56% of the worlds population lives in cities. That means childcare is essential for socialising a child. A child at home with a parent until kindergarten is probably going to spend the first 4 years of their life in a small apartment with one adult, bearing in mind that many young parents are generally not well off. This is not healthy situation for the child or the adult.
- tetromino_ 4y ago
  > A child at home with a parent until kindergarten is probably going to spend the first 4 years of their life in a small apartment with one adult This is such a strange take. Do you really imagine you and the child will be locked up all day in your apartment? Most cities are not warzones or quarantine areas. Cities have playgrounds and parks, and the child will probably insist on going to one at the minimum daily. The local branch of the city library will have storytelling sessions at least once a week, likely more; and when the storyteller is done, there will be the shelves of early books your child will love to explore. Cities will have lots of kids of the same age group on your block, probably even in your apartment building; your child will inevitably play with them. There will be friends and relatives who will visit you and whom you will visit. Perhaps organized play dates with friends' kids who live further away. And some sort of local young family meetups, organized at the library or playground or via the local Facebook group. There will be parades, festivals, strolls through the historical center, beach days, museum visits, barbecues in the public park... Unless you make a deliberate effort to avoid all of that, your child will surely get socialized.
- TheGigaChad 4y ago
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anonymouskimmer 4y ago
Another alternative: In the modern economy how many employers have allowed their employees to take their very young children to work? I know that some large companies have experimented with childcare facilities at the office, but why not allow parents to take care of their children on the job? Sure it's disruptive, but it should be manageable in many cases.

oh_sigh 4y ago

How about just a tax deduction for qualified childcare costs up to a certain amount? Parents usually want to vet their child care and not just ship their child to whichever person is offering the lowest rates for the day.

Rafuino 4y ago
You can fund a dependent care flexible spending account with pre-tax dollars up to $5000 per household currently. That will cover ~2 months of care where I live, but I guess it's better than nothing at all...
briHass 4y ago
There is one: dependent care tax credit. Admittedly, it's not much, with a max of 3K per child (total max 6k), less if you make more money. There's also the regular child tax credit of 2K per child.

cld8483 4y ago

Market failure? The demand for child care is a social and economic failure. Stay-at-home parents are no longer feasible for most families.

mfer 4y ago
Is the situation where stay at home parents, in a two parent household, being unfeasible a majority of the time a market failure?
- kenmorechalfant 4y ago
  Without a doubt in my mind.
- serf 4y ago
  I think the choice to have children without ample time for child-care is a failure, but i'm not wholly convinced that it's the market that drove it completely -- more like it's driven by a poor decision making process by the parents. Historically day-care has been a service used by very poor single parents so that they can maintain a work schedule, or the affluent that want some free time away from the kids. With that said, I can totally understand why there isn't a very good way to balance that market that's split between the 'well-off' and the desperate. My point is, which unfortunately isn't a popular one, that the parents are ultimately at fault for creating a financial burden that they have difficulty (in this economy, at this time) coping with. There is no stork-drop, it's their fault -- and this expectation for affordable childcare , which I hope becomes a thing sooner rather than later for the sake of the kids , is born from an inability to cope with poor planning and impulse control, and comes off as entitlement after thousands of years of parents' raising kids without a third party involvement. I think fewer and fewer people view the raising of children as a privilege, and it's shifting into a given. That's a problem. P.S. yes, I know third-party child-care isn't new, but the drive to provide it for every mother is.
  - chii 4y ago
    > after thousands of years of parents' raising kids without a third party involvement. historically, the extended family like grandparents, are the ones taking care of children while working age parents go out to actually work (the fields). Historically, this works, because you tended to live with the grandparents, at least for a while - the household is multi-generation. The recent "privilege" of buying your own separate home away from your own parents, before having children, is new. And if these people aren't rich enough to afford child care, it's because they've overstretched - they ought to really live with their parents imho (and make sacrifices like the old generations did).

notch898a 4y ago

Hilarious to call it a market failure. If you deregulate childcare, something or another will appear at every price point. You may not like some of those solutions, but they'll exist.

klyrs 4y ago
In markets without regulations, disreputable daycare will straight up sell children. Doesn't quite qualify as "hilarious" in my book.

burneraccountt 4y ago

Lol. Yes. The failure is treating child care like a market.

ch4s3 4y ago
Is it not a service that can be provided by someone outside of the immediate family? Should those caregivers not be paid? If yes to both, that is a market. If you provide it as an entitlement, you still need some mechanism to know how many (coarsely put) units of child care to produce. [*edit] for the down-voters, I'm curious what is your disagreement here?
- deleted 4y ago
  [deleted]
- ilikerashers 4y ago
  The government can step in to fund areas that shouldn't be a free-for-all market. Parents struggling to pay for childcare is the government saying a parent's job is to stay at home if they can't cover childcare. It's a big issue in the UK and likely to be key in the next election as prices have gone sky-high.
  - ch4s3 4y ago
    There's still a market there. There's demand which will be HIGHLY sensitive to the price government sets, and labor which is in many OECD economies in short supply.
- anonymouskimmer 4y ago
  I would guess that some people are disagreeing that this particular service is seen by most purchasers of it as a commodity. Others are probably disagreeing because they're conflating "market" with "free market", and this sort of service has a bunch of constraints from all sides.
  - ch4s3 4y ago

colinrand 4y ago

Markets are not oriented to solve problems for social and societal needs, that is supposed to be the government for the people's concern. If we as a society want this solved, and the government of the people for the people does not, this represents a failure of the social contract to be governed.

adam-_- 4y ago

You don't just take a punt on a childcare provider like you might with temporary accommodation on AirBnB. From personal experience and those of other parents I know, it's a heavily researched, quite intensive process involving multiple visits to different providers. An AirBnB for long-term childcare seems like a non-starter, perhaps beyond initial discovery and shallow research. --- Also, there are so many societal benefits to affordable child care for all. For example, more primary care givers returning to work, earning and therefore paying taxes etc.

mitchellst 4y ago
Yeah my first thought reading this was… does this dude have kids? Because this isn’t how the parents I know think of it, and not how I think of it. But I also have income that gives me choices— the option I chose is “employ a full time nanny.” Curious if he is closer to right than we are.

mindvirus 4y ago

A few thoughts: 1. Waitlists are a scam. In NYC, it's ~$150 non-refundable just to apply, and daycares won't tell you how long their waitlist is (and per the article, are often over subscribed). I wish there was legislation that these are refundable, or capped at ~$20 or so. 2. The cost of daycare here is around $2500/kid. So with two kids, you're looking at $60k/year, which is $100k pre-tax. And so if you have two kids, work, and make less than $100k/year it makes sense to stop working. And really, the real number is probably closer to $140k/year, since who would work to just break even on childcare and not see your kids?

notch898a 4y ago
There are a number of people who will never admit this on a public forum, but they are taking their kid to some illegal immigrant in the ghetto and paying 1/3 of that.
- anonymouskimmer 4y ago
  When I was a child my daycare was the house of a person who lived in the neighborhood. I wonder how much this sort of thing is regulated away now.
  - creaturemachine 4y ago
    They can regulate all they want, this is still a popular and often necessary option.
- em500 4y ago
  There are also a number of people who will never admit this on a public forum, but they prefer their paid job over watching their own children all day, sometimes even if it pays less.
denimnerd42 4y ago
I think people do work to break even or even worse. You only need childcare for 4 or 5 years until the kid is old enough to go to public kindergarten. If you are 25 and take a break from the workforce for 5 years you are going to obliterate your career. meanwhile if you had been working at say 25 in NYC at 100k/year and kept working w/ the support of childcare then by 30 you could be making 150 or 200k/year. If you had stopped working 5 years you would be lucky to find that same 100k/year job again. By 30 you still have about 35 years of your career left. I wouldn't want to stunt that growth early on.

blactuary 4y ago

This is a classic case of Baumol's cost disease. There isn't really a way for productivity to increase in the child care sector, you're always going to need a similar ratio of workers to children, but those workers also need their wages to keep up with inflation. The way it plays out in the US is everyone loses: the employees are underpaid, the employers are low-margin, and it is still too expensive for families. Child care companies can't pay the workers a fair wage while remaining profitable and keeping prices low enough for families, so we end up in this awful equilibrium where it sucks for everyone.

Rafuino 4y ago
Sounds like it's an industry that should be provided as a public service then (or at least subsidized), not something that a free market can sustain. https://www.nytimes.com/2021/10/06/upshot/child-care-biden.html https://www.nytimes.com/2021/10/06/upshot/child-care-biden.h...
- blactuary 4y ago
  I agree, given what I laid out it's not something the market can provide
anonymouskimmer 4y ago
> Baumol's cost disease. I don't think wages in the childcare industry are increasing noticeable relative to wages in other sectors. As a person mentioned elsewhere, other factors such as rental prices and insurance probably add more to the cost than wages.
- blactuary 4y ago
  Of course they aren't, like I said above the workers are way underpaid. The Baumol effect means that wages have risen more than the underlying increase in productivity, which like I said can't really increase in child care, you need X workers for Y kids, there's no productivity gains to be had. And that's not on the workers themselves, it's just basic arithmetic. Needing to increase the wages of the workers beyond any increase in productivity either means higher prices for parents or lower profits for the business. In this case we have both, which is why the market can't really sustain itself. Daycare companies have to give their workers some increase in wages over time, without getting more work out of them, but in order to charge parents even more than the already insane prices, they've held them down to some extent. So like I said, everyone loses.

kube-system 4y ago

> Suppose that the parents have two children who need child care. That is $540 per week. The parent salary has to be at least $540 per week to make the choice of child care economical. But that does not take into account taxes. Even worse than that, it doesn’t take into account commutes, and the opportunity cost of not spending time with your own kids. If you make just enough money at work to pay for childcare, what the heck are you doing?

texaslonghorn5 4y ago
> If you make just enough money at work to pay for childcare, what the heck are you doing? $540/40hrs = $13.5/hr. Any number of jobs pay this little.
- protonbob 4y ago
  That's take home pay. With taxes it's much higher.
  - texaslonghorn5 4y ago
    so based on empirical observations I am sure there are a number of people who are making barely enough to support the child care cost quoted in the post I quoted. maybe I misinterpreted the post I responded to
  - evan_ 4y ago
    then you also need to factor in tax rebates for childcare, which won't cover 100% but it will lessen the impact
- kube-system 4y ago
  LOL. I meant that rhetorically, not literally. I am suggesting that it is a bad life choice to work a job and then spend every penny paying someone else to take care of your kids for you.
alocasia-1 4y ago
I know you're being rhetorical, but often, just trying to avoid a gap in your resume. It sucks but there can be a greater long-term cost to trying to reenter the workforce after taking years off to raise kids.

monero-xmr 4y ago

We paid a lot of money for childcare when there was a (possibly illegal) daycare a few apartments down with a lady watching a bunch of kids. She only wanted $500 a month but we paid $2000 to an expensive one. Imagine advocating for cut rate care for your own children. Considering I’m leaving my most priceless thing with strangers it isn’t crazy to me that it’s expensive.

notch898a 4y ago
A significant part of what you were paying out is liability insurance etc and not necessarily better care.
- monero-xmr 4y ago
  I don’t mean to say I want the illegal daycare outlawed. I’m sure the lady was fine. I just think it’s absurd that we expect daycare to be cheap when you are entrusting the most valuable thing in your entire life to strangers. People think this should be free?
  - anonymouskimmer 4y ago
    > I just think it’s absurd that we expect daycare to be cheap when you are entrusting the most valuable thing in your entire life to strangers. They aren't strangers if you take the time to get to know them, and their current customer families, beforehand.
- creaturemachine 4y ago
  And some nice fat corporate profits. The lady down at the corner might not be as illegal as you think. Many jurisdictions allow for at-home day care, usually capped at a certain number of kids per caregiver, and it's much lower than the head-count at the corporate ones.
ahtihn 4y ago
Consider what you're actually getting for the price difference and where the extra money goes. Probably most of it doesn't actually go to the employees, so are you sure that paying more makes any real difference?

billconan 4y ago

While I don't have children of my own, my ex-girlfriend used to manage a daycare center. The fees charged to parents were quite high, while the salaries of the teachers, including my girlfriend's, were surprisingly low. It appeared that the primary expense was the cost of renting the property. In my opinion, the government should provide financial support to these facilities, particularly in the form of reimbursements for education infrastructures.

anonporridge 4y ago
This doesn't lower the costs, it just causes all taxpayers, including childfree adults, families with a stay at home parent, and families with older children, to subsidize the cost of childcare for those families where all adults are working full time. You could even hypothesize that this extra tax burden ends up being enough to force some stay at home parents get a job and put their children in childcare, creating a vicious cycle. That's not obviously bad, but we should talk clear eyed about whether that's the right social contract to enter.
hrunt 4y ago
I worked with a daycare on a building project, and I saw how amazingly expensive childcare is. The teachers are paid what many would consider to be barely a living wage, but property costs and especially insurance were substantial. The owners did it our of their love of doing it, not because because of typical financial goals. Yes, they could raise their rates, but if they did, many parents would have had to go elsewhere. It was a balancing act to charge enough for the quality they wanted to provide while also being able to be affordable for the community they served. Most teachers were younger, and did not last very long (two years at most).
jrumbut 4y ago
My aunt runs a very well regarded (and fully licensed, insured, etc) childcare business out of a building she inherited and it's a subsistence living. Complying with regulations, dietary restrictions, allergies, little special requests that all seem reasonable in isolation, replacing supplies, etc, etc. It's basically the opposite of a software business, it doesn't scale. She could do better for herself by raising rates (she has parents coming to reserve spots pre-conception), but she can't bear the idea of pricing out hard working people. There are some things that probably don't work as businesses, even with subsidies, and if we want another generation of kids we probably have to think outside the market box. We have free school for older kids, and maybe we could just extend public schools to age zero, but what about subsidizing new parents to stay at home and actually bond as a family? Or cooperatives of parents to take care of each other's kids on a shift basis? It would be cool to see this kind of creative thinking.

secabeen 4y ago

This is a pretty good distillation of the math. Child care has often been done on the backs of underpaid lower-class workers. Unlike most businesses, childcare doesn't scale well at all, and it's very hard to make the math work to pay the staff a living wage without it being prohibitively expensive. Even in the example given, the $22.50/hour rate is just the break-even rate with child-care workers at the minimum wage. If you push them up to a living wage of 75k/yr, the listed cost doubles. Add again people wanting child care costs to not just be break-even but to make working feel worth it, and it probably doubles again. It's just a very hard business with difficult scaling. It gets better after age 2, when you can increase your student/staff ratios, for what that's worth.

BaseballPhysics 4y ago
Which is precisely why government subsidies for child-care are necessary if we're going to structure society around nuclear families with both parents working. The cost of labour alone is enough to explain eye watering child-care costs, which means you either a) push that cost back on the consumer, b) somehow drive down the cost of labour, or c) have the government subsidize the cost of labour to make the price affordable and the businesses sustainable. We're doing (a) now and it's not sustainable, hence articles like these. To achieve (b) you'd need government intervention, anyway, as the market is already optimizing for minimizing labour cost. And thus you're left with (c), which is the path Canada has started going down recently: https://www.canada.ca/en/employment-social-development/campaigns/child-care.html https://www.canada.ca/en/employment-social-development/campa...
- xvaier 4y ago
  You'll notice that Québec is not on the map when they compare potential savings because we've had government subsidized daycare for over 25 years. The results have been increased participation of mothers in the workforce and increased GDP[1]. The same article explains that the ROI is about 47%, meaning that for every 100$ spent, the federal and provincial governments get 147$ back in increased productivity. 1. https://ici.radio-canada.ca/nouvelle/557405/garderie-subventionnees-rentables https://ici.radio-canada.ca/nouvelle/557405/garderie-subvent...

PretzelPirate 4y ago

For anyone interested in the cost of child care and how broken the current systems are, there's been some great work happening in Texas to understand solutions which has been driven by research and feedback from childcare workers, childcare company owners, childcare advocacy groups, and parents: https://pn3policy.org/resources/workgroup-recommendations-to-inform-the-2022-texas-child-care-workforce-strategic-plan/ https://pn3policy.org/resources/workgroup-recommendations-to... I'd recommend reading the linked briefs for a high level overview.

lawlesst 4y ago

I live in one of those cities that regularly makes the best places to live lists. I’m not able to get a spot in a before or after school program for my children, regardless of price. The one child center that serves the school has already filled their slots for the fall. Seems like this well educated, high income market is still organized around one parent not working full time or a grandparent living nearby.

wjamesg 4y ago
I completely agree. There is an assumption of one or the other and not enough childcare supply to meet the true demand of two working parent communities.

klyrs 4y ago

The "market failure" is that daycare is a low-margin business that needs to service cash-strapped parents near where they live. The "market" that's been keeping wages stagnant while cost of living, especially cost of land, has been skyrocketing. That policy wonks are laser-focused on the "market" is the problem. This is one aspect of the capitalism-fueled social collapse.

mariojv 4y ago

Costs are really out of control. My friends in a relatively low cost of living city (San Antonio, TX) are going to pay upwards of $1200/month for daycare for their soon to be 6 month old, once their family member providing childcare needs to return home. That's essentially an extra mortgage payment in this part of the state. There are also very long waiting lists, so long that my friends are encouraging families to get on waiting lists prior to conception! This is all anecdotal, but I believe they did their research on this given their childcare needs.

wjamesg 4y ago
I pay $1200/mo per kid in NC
- Balgair 4y ago
  That's a good price in most metros.

com2kid 4y ago

An interesting factoid is that Nanny share, split 3 ways, costs the same, or less, than daycare. The only disadvantage of nanny shares is the unreliability, when one family drops out the other families have to work hard to fill the vacancy, which involves doing what amounts to personality interviews. New daycares, at least in Seattle, also have huge costs associated with property. Basically the majority of existing home based daycares have been around for awhile, since land prices prohibit opening any new locations. E.g. buying a "house" for daycare would cost $4000 a month in mortgage payments at minimum, which sort of ruins the finances. Lots of exceptions and such of course to quibble over, but after spending over a year looking at daycares, very few new locations are opening. Figure 4k a month, at 15 kids, is $266 of the expenses. Labor is of course the main problem, but labor costs are high because living in cities is so expensive, and that is expensive largely because housing is expensive. When touring daycares I like to talk to the child care providers one on one w/o management there, and I always ask how well they are treated. Universally they have said that the large chain locations treat workers badly, and that you also get what you pay for with the higher priced providers, workers who are paid better (but not great), are also treated better, stay around longer, and burn out less. > GONZALEZ: You need one teacher for every four infants, at least. Infant care is obscene. This is where long childcare leave can help, if parents both have 6 months off at 100% salary, that gets the kid through the first year, after which childcare becomes a lot more reasonable. There is another huge drop off in complexity at 18 months, but I don't see a good way of getting families to that mark. Lots of daycares do 18m+ because the logistics are just way simpler.

bglazer 4y ago

It’s a social failure that we put the cost of caring for very young children exclusively on the shoulders of their young parents. As a society, we collectively pay for the healthcare of old people as a shared burden spread across our whole lives. We do the same for care of children ages 6-18 via public schools. You have kids age 1-6? Tough shit, pay up.

dap 4y ago

As a parent of two young kids in daycare, this feels very disconnected from reality. The most glaring issue is the discussion of childcare providers as though they're totally fungible. Now, I have no idea how representative my experience is, but the parents I know are interested in things like: cost, location, holidays/time off (lots of places near me take 5-6 weeks off per year -- that's kind of a big deal for people who work full time), hours provided, whether food is provided, what the environment is like, policies around when sorta-sick kids can attend, the experience of the providers/teachers, being able to send siblings to the same place, parent community, safety record...I could go on. Some of these are luxuries, but many affect one's ability to work a full-time job (which is the point of daycare for a lot of people). My experience is that places that tick all these boxes have waitlists. Many other places don't. Despite there being lots of places with availability, parents around here still feel like it's hard to find daycare. (There are other fallacies here, too -- like the idea that some centralized broker is an efficient solution. Monopolies efficient? And if you have a competitive market for the brokers, that seems to undermine a lot of the benefit, or at least make this idea much more complicated.)

bknight1983 4y ago
There’s also the debate around a corporate daycare (Bright Horizons, Goddard, Primrose) and at home daycare. I was a child of at home daycare by one woman who is literally my second mother (was present for all the big moments and was there emotionally for me). It also means it was a single point of failure; if Penny was sick, on vacation, then my parents were SOL. A more corporate daycare gives you the reliable daycare but at the cost of your child being a number.

mlsu 4y ago

With nearly any of our social ills, the answer is housing. - The people taking care of children at daycare make pennies; most of the revenue goes to a landlord. It's very expensive because you can't just move the daycare 1.5 hours out to the outskirts of town; you actually need to pay for real estate near where people live. - Grandparents, extended family cannot afford to live near their working children. - Anyone with a hint of upward mobility needs to move to an area where they can get their foot in the door of the financialized housing market. They move away from their friends and family, and then when they have kids they don't have a support network. - 2x full time incomes are needed to afford rent where work is available, leaving no time for childcare. Nobody who works part time can afford to rent. - It's impossible to make rent working part time in any city anywhere. Very difficult even with 1.5x income parents. - Commutes are much longer, increasing the burden of childcare. Lack of housing supply near work -- because of policies that benefit existing property owners. All of these have one answer: HOUSING SUPPLY. let people build more housing. That's it! Very simple!

jderick 4y ago
Or even better, remote work.
- MathMonkeyMan 4y ago
  Not enough, but it helps.
pyuser583 4y ago
I mean lots of daycare is in-home daycare.
Beaver117 4y ago
But if everyone has access to housing how will the poor landlords get their passive income?
notenoughhorses 4y ago
Or alternatively, to add to the list, working parents cannot afford to live near grandparents. They bought in the 1980s.

andjd 4y ago

> This seems like a project an entrepreneur ought to try and take on. In a market where there is an affordability crisis, why would we want to add a tech entrepreneur as a middle man who will want to take 30% off the top for "owning" the relationship between customer and provider (like DoorDash, etc)? You see a little of this with corporate day care centers (e.g. Bright Horizons), and these operations charge a substantial premium over independent providers. They just have a higher cost structure, and greater demands to make returns for their investors. In NYC, the cost of sending just one child to one of these is close to hiring a nanny. I agree that it's probably not reasonable to call wait-lists a market failure when having excess capacity in the market would require rates to increase to a level the market is unable or unwilling to bare.

xyzelement 4y ago

As a markets guy this logic makes sense, but as a parent it misses enough context to not be useful. First, the market for child care that we face as individuals is one largely of our chosing. In a macro sense, we make choices to live close or far from family, to be in a close knit community or not, etc. In a micro sense, are we comfortable with an off the books nanny coming to the house, or dropping the kids off at some illegal community grandma's house every day? In NYC, no poor person deals with the "$150 just to get on the waiting list" type of child care. The people who engage with that are people who chose to raise kids in the city and want a certain type of "formal" daycare. These people also make enough that the cost/benefit obviously makes sense to them. These are also people who would never use a broker because they don't consider daycare a fungible good. It's not like sourcing a trading venue for your sovereign bonds - by the time you are playing this game, you have very specific expectations about the philosophy of education, setting, religious context, etc. Meanwhile, the poor people already have grandma living in the house, she gets SSI so the daycare is subsidized. And if there's no grandma in your house, there's one next door who'll keep an eye on your kid too for a couple of bucks an hour. This is a very interesting example of where religious communities outperform the secular. For example in NYC is not uncommon to meet Orthodox Jews with 10+ kids. The secular can't relate to what it's like to have to deal with child care for 10 kids. But in those communities, it's routine - your family and neighbors help you out and you get through it. The fact that as seculars we fail to achieve that for ourselves is an interesting signal in my opinion.

rrherr 4y ago

"Let us assume that the parents get neither utility nor disutility from spending time with their infants." Umm...

danesparza 4y ago

How is a backlog the sign of a market failure? If anything, this shows a responsible way to manage demand while still maintaining power over the transaction. It also serves as a subtle threat to parents: "Cooperate, or we will send you on your way and contact the next person on the waiting list". Also: Didn't Nintendo set out to create these dynamics with their console launches? Don't they intentionally manage overhead by creating a waiting list?

Balgair 4y ago
Generally in economics, if there is a waitlist, then the business is not charging enough. Hence a failure. The reasons for this failure are discussed by other people here. One thing to keep in mind is that this is almost exclusively a US problem. Nearly all other countries have significantly more time off for infant care. And as infant care is the most expensive part of daycare most other countries don't have such issues (toddlers subsidize infants in most daycares)

throwawaygal7 4y ago

Childcare is never as good as time with a parent. We sacrifice our time with our children for future career earnings to maximize lifetime income. People in this discussion throw around terms like GDP growth due to increased labour market participation from working moms... It's ok just to accept what's happening. its not like you don't know what you're doing. Life is full of unpleasant tradeoffs.

maximus-decimus 4y ago
I think you're overestimating how good parents some people are. In Quebec they moved kindergarten down to 4 years old because they realised some kids are very "under-stimulated" at home and it sets them for failure for their whole academic career.

eddr 4y ago

At the risk of this seeming like self promotion, this is exactly the problem we're trying to solve at tiney.co We believe the answer to the childcare supply crisis is home-based care. Our platform (which is regulated in the UK) exists to enable people to set up as a home-based childcare provider (in the UK these are called 'childminders', which is a somewhat derogatory name for a highly skilled professional educator!). We then make it easy to run the business through payments, invoicing, educational tools and training, marketing, etc. We're working on the UK market first but we believe this is a global issue and have our eyes on other countries in the future. If you'd be interested in chatting or learning more about what we do, you can reach me by email on edd@ on the above domain name :) (And we're also hiring remote full stack engineers if you happen to be interested in joining the mission.)