FAMILY “RAISING PHASE” Childcare Chapter: COSTS
Childcare costs are increasingly high in the US, especially with daycare shortages as a lingering effect from the pandemic (when many daycare providers left the field or closed their businesses). Unlike almost all other developed nations, the US has no national infrastructure or subsidies for affordable childcare. Monthly expenses skyrocket during parenthood because of these steep childcare costs, which are left to individual families to shoulder in the absence of any state or national support system. • Anecdotal : “ My salary basically only covered my childcare costs, so it was difficult to justify returning to work after my baby was born .” • Childcare now costs more than housing in all 50 states, per 2023 report by Child Care Aware of America. • The US is an outlier in the developed world, with only $500 of annual public spending per child (per OECD data in this NY Times article).
Challenge
Importance
GOOD
BETTER
BEST
Offer Flexible Spending Accounts to use pre-tax dollars for childcare expenses (limited to $5k annually per federal law)
Offer direct childcare subsidy to employees
Provide free or subsidized on-site childcare for employees’ children Negotiate discounts on behalf of employees at local childcare centers Provide free membership to caregiving search service, with set number of pre- paid emergency backup care days
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Consider extending subsidy to other caregiving situations (i.e. elderly parents, sick or disabled family members, hospice, etc)
Antidotes
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Leading Firms
Offers $4k annual backup childcare credits and $1k annual stipend.
Backup care through Bright Horizons childcare centers, as well as full-time tuition discounts.
Provides subsidized backup care days and sourcing assistance for permanent care needs.
• Outsource options: Consider providing a Care.com membership to employees to find recurring or backup care, partnering with a national childcare center like Bright Horizons for a range of employee childcare benefits, or providing a Wellthy membership for caregiving advocacy and support • Read more: Moms First playbook on “ Making Workplaces Work for Moms ” dated July 2021; BCG article on how “ Childcare Benefits More Than Pay for Themselves at US Companies ” dated 3/26/2024; Care.com “ The Future of Benefits ” dated 2022; US Chamber of Commerce’s “ Employer Guide to Childcare Assistance and Tax Credits ”
Additional Resources
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