4 ms·

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 a

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.
- mcherm 4y ago
  Now THAT is a market failure. Create a company staffed with parents who have a gap in their resumes. Pay them slightly less than market rate. In theory, that should be very profitable. In practice there are too many confounding issues and I doubt this would be successful, although I do think the companies can do quite well by disregarding explainable gaps in one's resume.
  - chii 4y ago
    > I do think the companies can do quite well by disregarding explainable gaps in one's resume. i dont believe it is the gap, but more that a company would prefer to hire someone younger (and thus, cheaper?) if they both have the same experience.
    - denimnerd42 4y ago
      skills deteriorate if not maintained
- lawlesst 4y ago
  The hours of a public school day are generally about two hours shorter than the average workday, not accounting for commuting time. There is still a need for before and/or after school care for several years after after the child enrolls in school.
cperciva 4y ago
who would work to just break even on childcare I've seen the argument made that even if childcare is cash flow negative it can be profitable if prevents an interruption in career progression and thereby allows for higher future earnings.
sp527 4y ago
> 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? Career progression paths tend to yield highly backloaded payoff.
evan_ 4y ago
That must be a NYC thing, none of the childcare options we looked at asked us to pay to be on a waitlist.
hrunt 4y ago
The Planet Money episode the article references makes a point about the waitlists and why it is not necessarily a scam or a market failure. The margins on these places are low. The financials really only make sense if the school is at full capacity all the time. For a school to survive in these conditions, a waitlist is necessary so that if children or families leave -- which happens all the time -- they can immediately backfill that money. A point not made in the PM episode is that in markets with a lot of waitlists, charging for a position on the waitlist increases the likelihood that the families on the waitlist will be available when their turn comes. If waitlist membership is frictionless, then the daycare cannot count on that future backfill as strongly.

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.

mcherm 4y ago
Now THAT is a market failure. Create a company staffed with parents who have a gap in their resumes. Pay them slightly less than market rate. In theory, that should be very profitable. In practice there are too many confounding issues and I doubt this would be successful, although I do think the companies can do quite well by disregarding explainable gaps in one's resume.
- chii 4y ago
  > I do think the companies can do quite well by disregarding explainable gaps in one's resume. i dont believe it is the gap, but more that a company would prefer to hire someone younger (and thus, cheaper?) if they both have the same experience.
  - denimnerd42 4y ago
    skills deteriorate if not maintained
lawlesst 4y ago
The hours of a public school day are generally about two hours shorter than the average workday, not accounting for commuting time. There is still a need for before and/or after school care for several years after after the child enrolls in school.

cperciva 4y ago

who would work to just break even on childcare I've seen the argument made that even if childcare is cash flow negative it can be profitable if prevents an interruption in career progression and thereby allows for higher future earnings.

sp527 4y ago

> 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? Career progression paths tend to yield highly backloaded payoff.

evan_ 4y ago

That must be a NYC thing, none of the childcare options we looked at asked us to pay to be on a waitlist.

hrunt 4y ago

The Planet Money episode the article references makes a point about the waitlists and why it is not necessarily a scam or a market failure. The margins on these places are low. The financials really only make sense if the school is at full capacity all the time. For a school to survive in these conditions, a waitlist is necessary so that if children or families leave -- which happens all the time -- they can immediately backfill that money. A point not made in the PM episode is that in markets with a lot of waitlists, charging for a position on the waitlist increases the likelihood that the families on the waitlist will be available when their turn comes. If waitlist membership is frictionless, then the daycare cannot count on that future backfill as strongly.