Live data from Hacker News

Is there a market failure in child care?

arnoldkling.substack.com

101–110 of 127 posts

Re: Is there a market failure in child care?

#101
post #87
post #48

Costs are really out of control. My friends in a relatively low cost of living city (San Antonio, TX) are going to pay upwards of $1200/month for daycare for their soon to be 6 month old, once their family member providing childcare needs to return home. That's essentially an extra mortgage payment in this part of the state. There are also very long waiting lists, so long that my friends are encouraging families to g…

I pay $1200/mo per kid in NC

That's a good price in most metros.

Re: Is there a market failure in child care?

#102

This is a classic case of Baumol's cost disease. There isn't really a way for productivity to increase in the child care sector, you're always going to need a similar ratio of workers to children, but those workers also need their wages to keep up with inflation. The way it plays out in the US is everyone loses: the employees are underpaid, the employers are low-margin, and it is still too expensive for families. Chi…

Who is down-voting a simple description of the economic phenomenon that plagues the industry, a description noting that it doesn't work for anyone?

Generally here at HN, if you complain about downvotes, people downvote you more.

The karma points are more seriously taken as totally imaginary and not something to even really consider in discussion. Numbers on a screen aren't the thing HN really values.

Re: Is there a market failure in child care?

#103

While I don't have children of my own, my ex-girlfriend used to manage a daycare center. The fees charged to parents were quite high, while the salaries of the teachers, including my girlfriend's, were surprisingly low. It appeared that the primary expense was the cost of renting the property. In my opinion, the government should provide financial support to these facilities, particularly in the form of reimbursement…

Why wouldn't a landlord just raise rates for just a daycare then?

If support were to be given, I'd imagine you'd have to be very careful on how the laws were written.

Re: Is there a market failure in child care?

#104

This is a pretty good distillation of the math. Child care has often been done on the backs of underpaid lower-class workers. Unlike most businesses, childcare doesn't scale well at all, and it's very hard to make the math work to pay the staff a living wage without it being prohibitively expensive. Even in the example given, the $22.50/hour rate is just the break-even rate with child-care workers at the minimum wage…

Which is precisely why government subsidies for child-care are necessary if we're going to structure society around nuclear families with both parents working. The cost of labour alone is enough to explain eye watering child-care costs, which means you either a) push that cost back on the consumer, b) somehow drive down the cost of labour, or c) have the government subsidize the cost of labour to make the price affor…

You'll notice that Québec is not on the map when they compare potential savings because we've had government subsidized daycare for over 25 years. The results have been increased participation of mothers in the workforce and increased GDP[1].

The same article explains that the ROI is about 47%, meaning that for every 100$ spent, the federal and provincial governments get 147$ back in increased productivity.

1. https://ici.radio-canada.ca/nouvelle/557405/garderie-subvent...

Re: Is there a market failure in child care?

#105

This is a pretty good distillation of the math. Child care has often been done on the backs of underpaid lower-class workers. Unlike most businesses, childcare doesn't scale well at all, and it's very hard to make the math work to pay the staff a living wage without it being prohibitively expensive. Even in the example given, the $22.50/hour rate is just the break-even rate with child-care workers at the minimum wage…

Which is precisely why government subsidies for child-care are necessary if we're going to structure society around nuclear families with both parents working. The cost of labour alone is enough to explain eye watering child-care costs, which means you either a) push that cost back on the consumer, b) somehow drive down the cost of labour, or c) have the government subsidize the cost of labour to make the price affor…

[deleted]

Re: Is there a market failure in child care?

#106
post #14
post #6

Market failure? The demand for child care is a social and economic failure. Stay-at-home parents are no longer feasible for most families.

Is the situation where stay at home parents, in a two parent household, being unfeasible a majority of the time a market failure?

I think the choice to have children without ample time for child-care is a failure, but i'm not wholly convinced that it's the market that drove it completely -- more like it's driven by a poor decision making process by the parents.

Historically day-care has been a service used by very poor single parents so that they can maintain a work schedule, or the affluent that want some free time away from the kids. With that said, I can totally understand why there isn't a very good way to balance that market that's split between the 'well-off' and the desperate.

My point is, which unfortunately isn't a popular one, that the parents are ultimately at fault for creating a financial burden that they have difficulty (in this economy, at this time) coping with. There is no stork-drop, it's their fault -- and this expectation for affordable childcare , which I hope becomes a thing sooner rather than later for the sake of the kids , is born from an inability to cope with poor planning and impulse control, and comes off as entitlement after thousands of years of parents' raising kids without a third party involvement.

I think fewer and fewer people view the raising of children as a privilege, and it's shifting into a given.

That's a problem.

P.S. yes, I know third-party child-care isn't new, but the drive to provide it for every mother is.

Re: Is there a market failure in child care?

#107
post #77

With nearly any of our social ills, the answer is housing. - The people taking care of children at daycare make pennies; most of the revenue goes to a landlord. It's very expensive because you can't just move the daycare 1.5 hours out to the outskirts of town; you actually need to pay for real estate near where people live. - Grandparents, extended family cannot afford to live near their working children. - Anyone wi…

I mean lots of daycare is in-home daycare.

Re: Is there a market failure in child care?

#108
post #61
post #2

The failure to me seems in outsourcing your child to a daycare, vs parents having flexible schedules to actually take care of your kid (either 1 with PT job or staying home FT, or both with flexible jobs). I understand this isn't popular in our culture these days, but I imagine it has many positive outcomes for the child and family.

With all due respect, you sound like someone who doesn't have children. Most of the argumentation for "parents should stay at home and care for their kids" is based a different world to the one we now live in - a throwback to times where we lived in small communities and child raising was more a group effort with grandparents and relatives helping out. Today 56% of the worlds population lives in cities. That means ch…

> A child at home with a parent until kindergarten is probably going to spend the first 4 years of their life in a small apartment with one adult

This is such a strange take. Do you really imagine you and the child will be locked up all day in your apartment? Most cities are not warzones or quarantine areas. Cities have playgrounds and parks, and the child will probably insist on going to one at the minimum daily. The local branch of the city library will have storytelling sessions at least once a week, likely more; and when the storyteller is done, there will be the shelves of early books your child will love to explore. Cities will have lots of kids of the same age group on your block, probably even in your apartment building; your child will inevitably play with them. There will be friends and relatives who will visit you and whom you will visit. Perhaps organized play dates with friends' kids who live further away. And some sort of local young family meetups, organized at the library or playground or via the local Facebook group. There will be parades, festivals, strolls through the historical center, beach days, museum visits, barbecues in the public park... Unless you make a deliberate effort to avoid all of that, your child will surely get socialized.

Re: Is there a market failure in child care?

#109
post #85
post #77

With nearly any of our social ills, the answer is housing. - The people taking care of children at daycare make pennies; most of the revenue goes to a landlord. It's very expensive because you can't just move the daycare 1.5 hours out to the outskirts of town; you actually need to pay for real estate near where people live. - Grandparents, extended family cannot afford to live near their working children. - Anyone wi…

Or even better, remote work.

Not enough, but it helps.

Re: Is there a market failure in child care?

#110
post #4

How about just a tax deduction for qualified childcare costs up to a certain amount? Parents usually want to vet their child care and not just ship their child to whichever person is offering the lowest rates for the day.

There is one: dependent care tax credit. Admittedly, it's not much, with a max of 3K per child (total max 6k), less if you make more money. There's also the regular child tax credit of 2K per child.
Post reply on HN