Why Child Care Is So Expensive

Why Child Care Is So Expensive
theatlantic.com

> First, although child-care workers aren’t expensive on an hourly basis—their median hourly wage is less than that of non-farm-animal caretakers and janitors—labor is the biggest line item for child-care facilities. Unlike, say, car companies, they can’t cut spending by moving labor to poorer countries or by replacing human workers with machines.

> The industry is highly regulated, perhaps reasonably so, given the vulnerability of the clientele ... Other costs include insurance to cover damage to the property and worker injuries, as well as legal fees to deal with inevitable parent lawsuits.

> Finally, there’s the real estate. The most expensive child-care facilities tend to be situated near high-income neighborhoods or in commercial districts, where the rents are high. And they can’t downsize in a pinch, because most states require them to have ample square footage for each kid.

Québec has had subsidized daycare for almost 25 years, and the program literally pays for itself (and more!) via increased income taxes from parents that would have otherwise chosen to stay at home.

https://www.citylab.com/equity/2018/12/affordable-daycare-su...

> In Montreal, Quebec’s largest city, a day of child care cost on average $10 in 2016

> Quebec’s program, which introduced low-fee, universal child care in the province in 1996, centered on a few core premises: that if the government helped make child care accessible and affordable, it would allow more women to join the workforce, increase childhood development and social skills, and ultimately raise revenue for the government through increased payroll taxes. In at least two of those objectives, the scheme has been widely successful, says Pierre Fortin, an economist at the University of Quebec at Montreal, and the country’s leading expert in the economics of subsidized child care: It’s increased participation of women in the workforce, and cost efficiency.

> Since beginning the program more than two decades ago, Quebec has seen the rate of women age 26 to 44 in the workforce reach 85 percent, the highest in the world.

> Early estimates anticipated the program would generate 40 percent of its costs via increased income taxes from working parents. Instead, it generated income taxes to cover more than 100 percent of the cost. “In other words, it costs zero, or the cost is negative,” Fortin said. “The governments are making money out of the program.”

The program isn't perfect; there are a variety of issues that have popped up over the years, but since we were literally the first in the world to offer such a comprehensive, sweeping, subsidized plan for the entire provincial population of ~7.1MM in 1996 that was then used as a model in various Scandinavian countries, I'd call it a rousing success.