Inflation Pushes Some Child Care Costs to Exceed Regional Housing

The child care industry in the U.S. has suffered through the pandemic with staffing shortages and yearlong wait lists, but as inflation in the U.S. hits a record high, figures are showing that some child care centers cost more annually than the cost of regional housing.

The national annual average price of child care in 2020 was around $10,174, a 5 percent increase from 2019, According to the most recent data from Child Care Aware of America (CCAoA). And it is only expected to get worse.

In the Midwest, Northeast and the South, the annual price of center-based child care for an infant exceeds the cost of housing. "This crisis is not new, but it's also not getting any better," First Five Years Fund (FFYF) Communications Director Charlie Joughin told Newsweek.

Nationally, inflation hit 7.5 percent in January, and for the past two years, the price of child care has exceeded the annual inflation rate, the CCAoA's report said. In 2020, child care exceeded the rate of inflation by 4 percent. However, the current inflation challenge in the U.S. is independent of the 2020 annual child care prices reported by CCAoA.

A FFYF report said child care costs have risen 204 percent since the year 1990, according to the Bureau of Labor Statistics' Consumer Price Index analysis. In comparison to that, the report showed that the average family income has increased by only 143 percent.

"The status quo sets everyone involved up for failure," said Joughin, "and until Congress acts to fix America's broken child care system, prices will continue to soar and providers will continue to close their doors at a record pace. Without question, our economic recovery and long-term success depends on whether parents who want and need to work can find and afford quality child care options."

Families in need of child care have seen intense hardships over the last several years. And with the rise in prices expected to continue, the chances that the market will become more affordable are slim, especially given how difficult it now is to find teachers.

"Parents are paying way more for child care—especially if they have more than two children—than they are for their home," said Cindy Lehnhoff, director of the National Child Care Association to Newsweek, in a previous report.

Child care costs have been a huge stress on parents in the U.S. as well, as the 2021 Cost of Care Survey found that 62 percent of parents are more concerned about rising child care costs than they were in the past, and 94 percent had to implement at least one major cost-saving strategy in the past year.

Update 02/22/22, 9:50 a.m. ET: This story has been updated with more background and information.