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The child care industry is on the cusp of a crisis
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this post was submitted on 20 Sep 2023
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My friend and his wife are both high school teachers out in a rural town. They have been teaching for a decade and have two children together. They budget HARD to get by, even selling their home and downsizing. Childcare is killing them.
He was/is considering quitting his job to take care of the kids during the day and taking a nightshift at Walmart. Instead he opted to abandon his yard and sell his rideon lawnmower to hold them over for a few more months.
They just don't have the money to pay for childcare. It's half their income...
At the same time I get the prices. Childcare workers need to eat, too...I feel like it's the rising cost of everything else that's the real problem
I’m not completely sold. I’m going to do some math, but full disclaimer, I am using national averages and recommendations so mileage will vary.
That being said, $20k/ year comes down to roughly $9.62/hr to send our kids to daycare.
So let’s figure out an estimate of what it should cost. First we need the salaries of the employees. Average wage for daycare staff in the US is $11.26/hr. Now we need to find how much each kid pays to their wage. Recommended staffing levels say a maximum of 6 kids per adult. Every daycare I know is understaffed so we’re being generous with 6:1. So $11.26/hr divided by 6 children is $1.88 per child per hour.
Now there are other expenses. So on average your employees wages are 15-30% of your revenue. Note, there was no guideline for childcare, this is a general business guideline.
So we have a range. That $1.88 needs to be 15-30% of what that child costs to send. $1.88 divided by 0.15 is $12.53 and $1.88 divided by 0.3 is $6.26.
Now, I live in a really awful place with a lot of corruption. I don’t have much faith in much of the national averages. In fact during my research the national average cost is only $14k but the $20k is an actual value of what me and my wife pay at one of the cheapest daycares in the area. It’s also a poor city. Most of the people I know make under $10/hr. Many make minimum wage which is currently only $7.25/hr. I’d wager more heavily on the $8-$8.50 range for employees which makes our final cost range $4.40 to $9.50 which means best case we are still paying slightly over what we should expect.
Maybe I’m being overly pessimistic since my city constantly ranks as one of the worst places to live in the country but I think childcare is just another division run by a bunch of for profit companies trying to squeeze everything they can and screw over as many people as possible.
Yes Childcare is run by for profit losers who take the lion's share of the money while providing substandard care and underpaying their staff.