The lack of affordable, licensed child care affects both families and the economy. Without reliable and affordable child care options, parents often must decide whether to spend a huge portion of their budget on child care. Even before the pandemic, lack of childcare forced many mothers out of the workforce, at great cost to their careers, their employers and the US economy.
According to a Center For American Progress report, "The current child care market fails families, children, and businesses. Parents are often unable to find a child care program with an open spot for their infant or toddler. If there are available options, they typically are not affordable. Infant child care costs families an average of $11,000 per year and is more than the price of public college in 33 states."
Additionally, according to the report, many states have only enough childcare slots for 1 out of 5 infants and toddlers. And "[j]ust 1 in 6 families who are eligible for child care subsidies receive them. And the subsidies that do exist for infant and toddler child care are usually inadequate, covering just a fraction of the cost of providing care."
Despite its cost to parents, childcare is scarcely profitable and childcare workers are poorly paid.
The lack of childcare, especially for infants and toddlers, drives women out of the workforce, often at huge cost to their careers. And the U.S. economy loses an estimated $57 billion annually because of child care problems, according to the Center for American Progress. (The pandemic multiplied this phenomenon.)
Families living across 30 wealthy nations in the Organisation for Economic Co-operation and Development spend on average about 15% of their net income on child care costs, CNN reported in 2018, citing a 2016 OECD report. In the United States, couples spend 25.6% of their income on child care costs and that number soars to 52.7% for single parents, according to the report.
CNN notes that in Western Europe, childcare is often heavily subsidized by the government so what parents pay is capped at a certain percent of their income. In Denmark, couples spend about 10.7% of their income, while single parents pay 2.9%, it says, citing the OECD report.