An Economic View of Child Care

This week’s review of the website National Association of Child Care Resource & Referral Agencies http://www.naccrra.org/ lead me to two articles that I found particularly interesting as a result of studying this week about the way early childhood education is viewed by economist, politicians and neurobiologists.  

“How parents are making budgetary trade-offs to offset the cost of childcare”  By Susan Johnston September 4, 2012  Retrieved from US News and World Report http://money.usnews.com/money/personal-finance/articles/2012/09/04/dealing-with-the-rising-cost-of-childcare and “Child Care costs exceed rent in most states” by Emily Jane Fox @CNN August 16, 2012 retrieved from http://money.cnn.com/2012/08/16/pf/child-care-cost/

Both of these articles used information from the NACCRRA website to take a look at the economic side of child care for parents and for centers.  For parents the cost of child care is getting increasingly difficult to pay.  To quote the article by Emily Jane “While the experience of raising a child may be priceless, the cost to provide care for them is getting to be more than most parents can afford”.  This is the issue that economists and politicians alike are and should be concerned with.  As parents and families are spending more money on child care, cost for other expenses like food and gas are also on the rise(Fox, 2012).  In addition,  in 35 states the cost of infant care exceeds the tuition at a four year public college (Johnston, 2012) and costs more than rent payments in 35 of the 50 states for a single child and exceeds rent payments in all 50 states when paying for two children (Fox, 2012).  As child care costs are taking more and money out of the pockets of working parents, families are spending less on other things like entertainment and travel (Johnston, 2012).  

The flip side of this issue is the side of the child care programs.  Why does child care cost so much?  Why are programs raising their rates?  It comes down to the cost of care.  In addition to the fact that child care programs are feeling the effects of economy along with every other part of our society, an increased need for higher quality has also added to the price tag of care.  As Marsha Basloe, executive director of New York's Early Care & Learning Council was quoted in Fox’s article stated "We have very high regulations and standards, from the ratio of teachers to students, to training and education standards, and that leads to a greater cost,".  Quality care is important especially since it has been linked better outcomes for children in later years.  To summarize the data about quality, basically it means that children attending quality early care and education programs are more likely to be successful in school and in life.  And quality simply costs more.

One of the quotes from Fox’s article that I found particularly interesting and somewhat controversial was a comment by David Abuaf, chief investment officer at Hefty Wealth Partners in Auburn, Ind., explaining  that rising college costs contribute to rising service costs, including childcare he was quoted in saying "The cost of educated people has outpaced the demand for regular goods."  I related this statement to the fact that research has linked the education level of child care providers to the quality of care provided creating a need for the wages of child care providers to rise to cover the cost of their education and also for child care centers to recruit and retain quality providers.   

But to pay those wages, child care centers need to increase the cost of care for parents.  

So how do programs balance the cost of quality care with the rates they are charging parents?  How can we as a nation provide quality and affordable child care to all of the children and families who need it?  Don’t our children deserve the right to have equal access to quality care and education that will give them the start they need in life to be successful?  After all, the future of our children and the future of our nation depend on it.