Why is childcare ruinously expensive but its providers live in abject poverty?

[Recursion]

I feel like I'm missing something basic here.

Childcare nearly bankrupts just about every family I know, but the people providing the childcare are barely scraping by. How can it be both too expensive for the consumer and too cheap for the provider?

(There's a similar question about elder care)

[WhiskeyGrinder]

1. For childcare cost, it's high because the costs are almost entirely privatized.

There is funding available for low-income parents to help with childcare, but it's really limited and is often cut. For anyone above lower-middle-class, the costs are entirely borne by the consumer.

In the 60s, legislation was proposed for a nationalized child care system that would help reduce costs. Nixon vetoed it.

Liability insurance, high provider-to-child ratios, and other factors add to the high cost of doing business.

There are a few reasons the pay is low -- it's not valued, the workers tend to have less schooling, its flexibility attracts people who are looking for flexible work to augment other part-time jobs...it's a cycle.

[unblock]

2. it can't be automated and there are very limited economies of scale.

many working parents are not making much more than a barely scraping by wage themselves, so it takes a huge chunk of their take-home pay to pay for someone else to barely scrape by.

there's modest economies of scale in that one person can watch 8 kids at once instead of just the one or two that most parents do, but then there's overhead of rent and toys and maybe food and insurance and of course, profit and taxes and business expenses and all that.

but good child care keeps the ratio low so your kid gets better attention. better, but more expensive.

you could have cheap child care with 50 kids per adult, but that's a recipe for disaster....

[elleng]

3. Depends on how it's done, I suppose.

We shared sitters' services with another family (at our house,) she lived with her folks nearby, so we all did ok. No 'institutions' involved.

[pnwmom]

4. Say you watch three babies and toddlers at home, and charge $1000 a month per child.

You're making $36,000 a year.

Say you're a parent of small children needing care. You're paying $24,000 a year.

See the problem?

In Kitsap County, the median cost of infant care at a child-care center is more than $1,000 per month, an annual cost that is 19 percent of the county's median income, according to Child Care Aware of Washington, a referral and advocacy group.Aug 6, 2018
Parents struggling with daycare waitlists and costs in Washington ...

https://www.king5.com/article/news/local/parents-go-to...daycare.../281-580894588

[Demovictory9]

7. yes. Limited ability to make more money by bringing in more kids. Childcare is labor intensive

[Cracklin Charlie]

10. $1000 per month per child?

I provide daycare service for my daughter’s two children, my granddaughters, ages 3 and 8 months.

I don’t make that much for both kids combined. And the parents couldn’t afford it, anyway.

I don’t mind being low paid, because the benefits that I, and the silly girls earn, are not all monetary. I feel like I am getting paid in LOL’s.

[pnwmom]

11. As the grandmother, you're laboring not just for money, but for love.

My sister paid my mom $5 an hour. She could never have gotten an unrelated adult at that price!

[exboyfil]

12. Do you pay FICA?

Is the income reported? Do you take out extra liability insurance? Do you have to meet building standards where you care for the kids? Would your daughter pay a stranger the same amount if wages are subject to market forces (ie you bid your services for child care to the highest payee.

[democratisphere]

5. The wealthiest owners of childcare and eldercare facilities

hire good old American slave laborers. It is a f'ing disgrace!

[Recursion]

6. I mean, but, no: it's not Big Childcare

That's what I don't get.

[EndGOPPropaganda]

8. It is Big Childcare. Bain Cap owns the biggest childcare provider (Bright Horizons)

And Bain is raking in cash from Bright Horizons. They haven't sold it off - they're operating it. Bain has owned it for over ten years.
That means they think it's profitable.

[Brainstormy]

9. because it's women's work

for the most part. And women's work has always been devalued.

[ChoppinBroccoli]

13. When We Had 3 In Daycare At The Same Time.........

............our monthly payment was more than our mortgage. Childcare is ridiculously expensive.

[exboyfil]

14. There are transactional costs on both ends

For the parent they have to overcome the income and payroll taxes on the income they earn. They also have the additional costs associated with dropping off and picking up (the child is watched more hours than the parent can work). On the childcare end you also have income and payroll taxes, the costs for maintaining licensed facilities, and liability insurance.

Unless you are being paid as a reasonably high professional, you can't justify it financially if you have more than one or two kids.

My daughter is an engineer married to an engineer. She is also involved in the SWE organization at her employer. She says that childcare is the biggest issue with retaining women engineers

I was fortunate that my wife was a stay at home mom.

[eppur_se_muova]

15. Licensing and insurance should be biggies. Anyone got numbers ? nt