Why sending a kid to day care costs so much

Windom residents Maggie Watson and Zach Looker-Vodak spend nearly $3,000 a month on center-based day care for their daughters, 9-month-old Charlie and 2-year-old Hadley.

It costs them about the same amount as their student loan and mortgage payments.

Or as Watson puts it: “We drive a Honda Civic off a cliff every year.”

Watson and Looker-Vodak aren’t alone. At $16,087 annually, the average cost of full-time, center-based infant care in Minnesota is the fourth highest in the nation, according to a recent study by the Washington, D.C.-based Economic Policy Institute. That adds up to over 20% of the average Minnesota family’s income. For many families, the share of their income that goes to child care is much higher.

Only Washington D.C., California and Massachusetts have more expensive center-based infant care.


Child Care costs

The average cost of full-time, center-based infant care in the United States.

Top 5

  • Washington D.C. $24,243
  • Massachusetts $20,913
  • California $16,945
  • Minnesota $16,087
  • New York $15,934

Bottom 5

  • Arkansas $6,890
  • South Dakota $6,511
  • Kentucky $6,411
  • Alabama $6,001
  • Mississippi $5,436

Local child care operators said costs are high in Minnesota in part because of state-mandated staffing ratios and teacher-education requirements.

They said they don’t want to ease the state’s high standards but that there needs to be more support for families in the way of subsidies and tax credits.

“The economics of child care — of privately funded child care where families are paying — that model is just broken,” said state Rep. Dave Pinto (DFL-64B), who chairs the House Early Childhood Finance and Policy Committee. “We need to make an investment as a society that is commensurate with the opportunity and the challenge.”

High standards of care

Center-based child care across America isn’t cheap, with the average annual cost for an infant exceeding $10,000 in 29 states, according to the Economic Policy Institute study.

The study did not include toddler, preschool or school-aged care. Nor did it include home-based providers, who charge  about 30%–50% less than day care centers in Minnesota, according to the nonprofit Child Care Aware of Minnesota.

New Horizon Academy CEO Chad Dunkley compared child care centers to educational institutions, saying his costs are higher because his centers keep their doors open for longer. His 70-plus centers, which include two in Southwest Minneapolis and another in Edina, are open 12 hours a day.

He said Minnesota has some of the highest standards in the country when it comes to day care centers, which also drives up cost.

In Minnesota, every center-based room must have at least one teacher who meets the state’s educational and experiential requirements. Typically, that includes some sort of postsecondary study in a child care-related field, plus at least 1,000 hours of experience as an assistant teacher.

State law requires that center-based providers have one staff person for every four children 6 weeks–16 months, for every seven children 16–33 months and for every 10 children 33 months–kindergarten age. In addition it limits how many children can be in a room together at a given time.

Lynn Hoskins, director of the 126-seat Community Child Care Center in Windom, said the 1-to-4 staff-to-infant ratio is demanding.

Hoskins operates a 10-seat infant program, which, like the rest of the center, is open 6 a.m.–6:30 p.m. Monday–Friday. She said the program’s biggest expense is its five full-time staffers but that other costs, like cribs and formula, also add up.

“We can’t recoup our costs in [the infant] room by adding more children,” she said, noting the state’s capacity limits.

Hoskins said she has considered dropping the program, which isn’t profitable, but that offering hard-to-find infant care helps the center build relationships with families.

“We feel like we’re doing a service,” she said.

Maggie Watson holds her daughter Charlie after picking her up from Community Child Care Center. Watson, an attorney, said the center staff’s longevity was a draw. Photo by Nate Gotlieb

Staying relevant at work

Diane Benjamin, communications director for Child Care Aware of Minnesota, said the Economic Policy Institute study isn’t necessarily indicative of what the typical Minnesota family pays for child care, because many use in-home providers.

Such providers account for 40% of the state’s 222,000-plus licensed child care seats, according to the Minnesota Department of Human Services.

Still, she said the cost of care often forces families to make sacrifices, such as working opposite shifts, using providers they don’t feel good about or eschewing work altogether.

Leaving the workforce to become a caregiver can permanently impact careers, Dunkley said.

“We need some model that says, ‘As a society, we’re supporting these parents more,’” he said. “We don’t want people leaving their jobs because of a lack of affordable child care.”

Edina parents Nicole and Joseph Kirk, who have two boys, were able to accommodate both career and child care, something Nicole Kirk said took planning.

“We really had to rework personal finances to make it happen,” she said.

Kirk, a member of the Southwest Minneapolis Working Moms Facebook group, needed child care to start 12 weeks after her due date, when she had to return to her job as a University of Minnesota real estate specialist.

She said she called over 30 day cares to see about availability. Two had slots.

She and her husband settled on Bernie’s Montessori School and Child Care in Richfield, where they have also sent their second son. It initially cost $275 a week per infant, she said, and the price has gone up each year.

Watson, the Windom mom, said she considered in-home care but she wanted more than one pair of eyes on her kids.

She said she liked that many of the staff at Community Child Care Center, where she sends Charlie and Hadley, have been there a long time.

The price isn’t cheap, but Watson, an information privacy attorney, said she never considered taking time off, both for financial and professional reasons.

“If I took five years off to get [the kids] through kindergarten, I would be totally irrelevant [in my profession],” she said.

Advocating for more support 

For Dunkley, making the system more sustainable would mean increasing tax deductions and child care assistance for families.

Dunkley said a $5,000 federal tax deduction for married couples who send kids to day care hasn’t increased in 20 years. He added that Minnesota’s child care assistance program “hasn’t recovered” since 2003, when Minnesota leaders cut $86 million in child care assistance funds because of a budget deficit. That forced counties, who distribute the funding, to tighten eligibility requirements.

Today, Hennepin County provides about 6,000 families with child care assistance, according to a county spokesman. There were 458 families on the program’s waitlist as of July 31.

For low-income families, another option is Minneapolis Public Schools’ early-learning programs, though the district doesn’t offer full-time programming until kids turn 4.

Families in that program, called High Five, pay on a sliding-fee scale. At the most, they pay $360 a month.

High Five serves about 1,200 students in over 44 classrooms, said Maureen Seiwert, the district’s executive director of early childhood education. Most of those classrooms are in lower-income parts of the city.

Seiwert said the district had just 80 full-time High Five slots five years ago but now has 580 half-day and 580 full-day slots.

She said experiences like High Five help kids be successful in kindergarten and beyond.

Pinto noted that parents of young kids are in the worst financial positions of their lives and said society would benefit from greater investment.

He noted that the first bill introduced this past session in the state House would have increased investment in early childhood initiatives, such as home visits and education aid. The bill did not pass, though parts of it were included in other legislation.

Both Pinto and Dunkley advocated for a sliding-fee system where parents would only pay a certain percentage of their income to child care.

Ann Edgerton, director of the University of Minnesota Child Development Center, said another problem is the low pay that child care workers receive. According to the federal government, the median preschool teacher salary in Minnesota is about $32,100, which is about 55% of the state’s median elementary school teacher salary.

Edgerton said there’s a different mentality in Europe, where early childhood workers are regarded as teachers, not babysitters. She said having professionals trained in child development is critical, especially because so much of a person’s brain development happens in the early years.

“It’s easy to say, ‘Children are the future,’ but how do you show that systematically?” she asked.

Pinto said that it starts with the societal recognition that young families shouldn’t be entirely responsible for early childhood education.

He added that having a strong early childhood education system is also critical for closing gaps that exist between different groups of students.

“We all would benefit if there was much greater investment in little kids,” he said.

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