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Child Care Costs Could Cause Higher Unemployment Rate

Updated on February 2, 2016

The unemployment rate for July 2011 was at 9.1% nationwide, according to the Bureau of Labor Statistics. With an increase in the cost of child care, the country may well see a rise in that statistic. Working parents strain to come up with the money to pay child care costs and, in some cases, find that they would be better off not working at all. When you take into account the cost of gas to commute, business attire and other expenses that come with having a job outside the home, most families are not netting enough to cover the rest of their expenses. For some, the cost of child care combined with these expenditures is more than their total wages.

Child care costs are increasing for a number of reasons. Many states require training and licensing for day care programs, even those run out of the home. Child care facilities have the cost of insurance along with the typical overhead costs of running a business. Add to that the increased price of utilities and the rising cost of groceries—day care providers, like many other businesses, must raise their fees in order to stay in business. If the fees are higher than parents can afford, the child care facility will lose money and run the risk of going out of business, further contributing to the unemployment rate.

Parents should not count on state funding to help pay for child care either, as subsidies are on the decline. According to the California Budget Project, “California has repeatedly cut child care … the cumulative impact of these reductions amounts to more than $1.6 billion between 2009-10 and 2011-12, with more than $750 million attributable to cuts passed by the Legislature in March 2011 that are scheduled or assumed to take effect in July 2011.” California is not alone. The National Women’s Law Center lists 18 other states that have either undergone cuts to child care subsidies or in some way limited access to the subsidy programs.

Have You Seen an Increase in Childcare Costs?

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    • Barbara Kay profile image

      Barbara Kay Badder 5 years ago from USA

      This was happening in the '70s too. Anytime there is a recession, jobs don't pay enough for moms to keep working. I worked at one job and finally quit because I figured what was going to taxes, baby sitter, clothing, and gas and I was losing money. Hang in there. Hopefully things will change.

    • JanuaryFry profile image

      JanuaryFry 5 years ago from Illinois

      Barbara, thank you for your comments! I know several moms that are thinking of quitting their jobs because of this issue. While staying home is a wonderful option (I work at home and homeschool, so I fully endorse it!), I know that some families are struggling because of the reality of this. I, too, hope things will change.

    • Sunnyglitter profile image

      Sunnyglitter 5 years ago from Cyberspace

      Child care costs are insanely high! I work from home because it's the only way I can afford to take care of my kids. My son is 8 months old, and daycare centers out here want $800 to $1200 per month for a baby his age. I feel bad for women working at McDonald's or low-paying retail jobs, because they're basically just working to pay the daycare tab. I've been there, and it's not fun.

    • JanuaryFry profile image

      JanuaryFry 5 years ago from Illinois

      Sunny, thank you for your input. It seems like everything is going up except the pay rate. Two income families are dropping to one, and single parents are barely scrapping by. Daycare providers need to bring home the bacon too, but most parents can't afford the prices without help. The help is dwindling and the light is getting dimmer. A vicious cycle, at best.

    • Sunnyglitter profile image

      Sunnyglitter 5 years ago from Cyberspace

      You're welcome. I agree that it is a vicious cycle.

      What also confuses me is the fact that, in Missouri, you can't get approved for daycare assistance until you have a job. Yes, obviously you don't really need daycare until you have a job, but I think people deserve a week or two of daycare just to go on job interviews and whatnot. I don't mind paying taxes for that.

      What I'm trying to say (I tend to ramble lol) is that if somebody needs daycare assistance, they probably don't have anybody to watch their kids. How are they supposed to go on interviews? Bring their children along?

      And then, there's a delay with the daycare assistance. Say you get a job on Friday and they ask you to start Monday. Your caseworker won't have time to do the paperwork and approve your daycare case until you've already been employed for a few weeks. And how are you supposed to go to work if you don't have daycare for your kids? You obviously can't afford to pay for daycare if you aren't employed yet.

      I've met a few women who WANT to work, but can't afford to pay somebody to watch their kids while they wait for daycare to kick in. It's really sad. :(

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