Why Is Daycare So Incredibly Costly When Its Workers Are Still Underpaid?

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Recently, I came across a thought-provoking Twitter thread that began with a simple yet impactful question: “Can someone clarify why daycare costs are so high, but the workers are often underpaid? What’s the deal?” User @LisaBrown, who mentioned her parents operate a small in-home daycare, expressed her confusion over the significant disparity between their rates and what she pays in her area of Georgia, which likely has different pricing structures.

Many parents can relate to the shock of daycare expenses. During my own experience, I was astounded to find that the cost of care for my toddler was nearly equivalent to our mortgage payment—taking up about half of my salary. This sticker shock is not uncommon; across the United States, childcare fees frequently rank among a household’s largest expenditures, rivaling housing costs. Yet, the wages for daycare workers remain alarmingly low. According to the Center for American Progress, nearly 40% of these workers find themselves relying on public assistance at some point in their careers. Daycare centers themselves operate on tight budgets, which only adds to the complexity.

So, why is early childhood education so prohibitively expensive? And why don’t its workers earn more?

I anticipated a flood of criticisms directed at daycare providers in response to the original tweet, but surprisingly, the comments largely focused on the practical realities of running a daycare. One respondent, @EmilySmith, pointed out, “If we paid childcare workers the same hourly wage as parents, then a worker caring for four children would only earn a quarter of a parent’s pay per child. This doesn’t even account for FICA, benefits, utilities, and supplies.” Another user, @JamesDoe, added, “In many states, three staff members can care for ten infants. At $200 per week per child over 45 weeks, that totals $90,000 annually. Even without any overhead, that breaks down to $30,000 per staff member.”

Reflecting on my own experiences with daycare costs, I reached a similar conclusion. Yes, it was tough to pay almost as much as our mortgage for my son’s care. However, the dedicated workers providing that care were not making much themselves, and neither were the daycare owners.

It’s important to recognize that the calculations shared by @JamesDoe assume there’s a straightforward split of $90,000, omitting any costs related to overhead—like mortgage payments, insurance, utilities, and maintenance. Generally, daycare owners are not wealthy, and their employees are often not adequately compensated. While there may be instances of price inflation or exploitation, the broader issue lies elsewhere.

The real question is: why hasn’t society invested in early childhood education as it does in other vital services? Just like farming, education, and infrastructure, early childhood education deserves public funding. Despite our rhetoric about the significance of providing children with a strong start in life, we are not backing it up with financial commitment.

We demand highly trained professionals to care for our children and prepare them for future education, which is entirely reasonable. However, that expectation must align with fair compensation for these educators. To keep childcare affordable while ensuring quality, public subsidies are necessary.

Despite the concerns of “fiscal conservatives” regarding tax increases for services that can be opted out of, the reality is that investing in quality early childhood education ultimately enhances our economic and social fabric. Children who receive quality early education fare better across numerous metrics, including health and self-worth. Furthermore, parents who can place their kids in daycare are better positioned to generate income and contribute to the economy. Thus, funding early childhood education through public means is less an expense and more an investment.

In conclusion, daycare is indeed very pricey, and its workers are underpaid. However, rather than pointing fingers at daycare providers, we should reflect on our collective responsibility and ask why we have not prioritized this investment in our children.

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Summary

Daycare is often a household’s largest expense, yet workers in the industry remain underpaid. The high costs are attributed to operational expenses and the need for fair compensation for educators. Society must consider investing in early childhood education as a priority to ensure both affordability for families and adequate wages for workers.


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