5 Things You Need to Know About Child Care Costs and the Workplace
It’s no secret that child care is expensive. Survey after survey has said as much in recent months. And the statistics, frankly, are staggering.
But how do the escalating child care costs affect working parents? And to what extent do the impacts carry over to their employers?
Here, we’ll take a look at working parents and their employers need to know about the cost of child care, and its effects on the workplace.
1. Child Care is the Largest Household Expense for Many Families
At a cool $18,000 for two children in day care, the cost of child care is the largest household expense for many American families, according to Care.com’s second Cost of Care survey of 700 parents nationwide. Twenty-eight percent of families spend more than $20,000 and 13 percent spend more than $30,000 annually, the survey found. According to the Department of Health and Human Services, the affordability threshold for child care is 10 percent of a household budget. A new paper from the Economic Policy Institute found that child care’s share of total family budgets meets HHS’s standard of affordability in only a handful of the 618 areas identified in the study.
2. Child Care Costs More Than College Tuition, But Companies are More Likely to Help Pay for Your Kids to Go to College
The EPI paper released last week further revealed child care costs have surpassed college tuition and even housing costs for many families. According to the report, child care for a 4-year-old exceeds in-state full-time undergraduate tuition in 24 states and Washington, D.C., while infant care exceeds tuition costs in 33 states and DC. However, large employers are eight times more likely to offer scholarships or educational assistance for employees’ kids than they are to offer help pay for child care a direct expense to the company. According to the Families and Work Institute’s 2014 National Study of Employers, 5 percent of large employers (2 percent overall) help employees pay for child care with subsidies or vouchers that have direct costs for companies. Meanwhile, 40 percent of large employers (and 12 percent total) offer scholarships or educational assistance for the children of employees.
3. Nearly 70% of Working Parents Say the Cost of Child Care Affects Their Careers
To be precise, it’s 69 percent of parents who said the cost of child care has influenced their career decisions, according to Care.com’s second Cost of Care report, released earlier this year. And what kind of impacts are we talking about? 35 percent say they’ve changed jobs and 24 percent have taken a second job to increase household income. Another 66 percent said they’d change jobs for better work family benefits, according to Care.com’s Better Benefits survey. Child care also impacts working parents’ careers in less obvious ways. For example, 90 percent of employees said they’ve had to leave work for family reasons and, according to a Care.com member poll, 64 percent of parents worry about their children’s safety every minute of the day. As these workplace disruptions add up, the lost productivity mounts. Annually, absenteeism, presenteeism and other family-care related issues cost American businesses tens of billions annually.
4. Improving Access to Child Care Could Unlock Women’s Unrealized Potential in the Workplace
In recent months, study after study has illustrated the continued struggle of women – and working moms, in particular – in Corporate America. We’ve seen it in the 58 percent of Millennial moms who told Pew Research being a working mother has made it harder for them to get ahead in their careers, in the 37 percent of millennial Harvard Business School alumni who expect to interrupt their careers for motherhood, and in the new Women in the Workplace study from Lean In and McKinsey that found women are “still underrepresented at every level in the corporate pipeline.” Part of that, to be sure, has to do with outdated corporate structures built for single-income households, when the reality is that in two-thirds of married households all parents work. But part of it is also that working moms still more often take on the default parent role, and handle more child care and household responsibilities than working dads. Improved access to reliable, affordable child care helps to put working moms more on equal footing – especially for those moms who need care to be able to work and need to work to be able to afford care.
5. There’s Plenty Companies Can Do to Help Offset the High Cost of Care
It’s in an organization’s best interest to keep working parents – who comprise a large percentage of the workforce – present, productive and engaged in their jobs. One important way of doing this is helping parents manage the cost of care. One way to do this is offering family care benefits, through a program like Care.com Workplace Solutions, which can help employees find and manage care or provide subsidized backup care to cover those unplanned care gaps. Education about FSAs, DCAPs and other tax breaks is another way to help working families manage care costs. For example, although 64 percent of respondents to the Cost of Care survey said their employers offer an FSA, 36 percent don’t set aside any money and 36 percent didn’t realize FSAs can be used to help decrease child care costs.