Can Parents Afford to Raise Children?

Dec 26, 2023 | Finconomics 101, No Bull Economics

Childcare Costs Post Banner

An analysis of consumer health is not complete without a discussion about childcare costs. The U.S. Census recently reported that 66% of working women are employed full-time, year-round (the largest share on record) during 2022. With an increasing need for both parents to work full time in order to make ends meet, more couples must rely on childcare services to raise families. Higher demand is clearly evident by the huge inflation in childcare costs over the last 10 years.   

Commentary

  • The median U.S. household income increased from $65,740 in 2013 to $73,030 in 2018 to $74,580 in 2022. From the 5-year period of 2013 to 2018, median incomes increased +11% with the growth rate slowing to just +2% for the 4-year period from 2018 – 2022. 
  • Compare these paltry increases with the astronomical growth in childcare costs (as presented by care.com) outlined below!
  • Notably, a couple earning the median income in 2022 would allocate 34% of their pre-tax salaries ($74,580) to put their 2 children in daycare ($25,500 @$510/week x 50 weeks). This is equivalent to 2 working blue-collar parents trying to send their kids to an expensive private school!
  • Financially speaking, the couple could be better off trying to live on 1 paycheck (of at least $49k) so that their children could be raised by a caring parent. In any case, we as a society must find ways to increase productivity & wages so families can become economically viable once again! 

Childcare Costs Financials

Source: https://www.care.com/c/how-much-does-child-care-cost/?mod=article_inline#child-care-cost-increase & Income in the United States: 2022 (census.gov)

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