Child care costs are putting families under so much financial stress these days that many parents are going into debt or making other sacrifices to pay for it, a new poll shows.
An estimated 40% of parents who regularly pay for child care have at one point gone into debt over it, according to a September survey of 2,000 parents commissioned by Penny Hoarder, a personal finance website, and 20% wouldn’t be able to afford it once the federal government’s monthly child tax credit payments end this year. For perspective, 29% said child care costs had put them into debt in a 2018 survey, although take that comparison with a grain of salt, since the older survey polled Penny Hoarder readers, rather than a representative sample of the U.S. population.
Most parents (89%) in the latest survey said they made a sacrifice of one kind or another to afford child care, with 38% reporting taking a second job, 32% selling belongings, 28% borrowing money from family or friends, and 25% even giving up a pet. Some 44% of parents pay $1,000 a month or more for child care (versus 35% who said the same in 2018.)
Child care is a hot topic because a shortage of workers has made it harder to come by in the pandemic, and because it’s one of the things keeping many people—especially women—on the sidelines of the labor force. President Joe Biden called for creating a series of government programs to help parents as part of a spending package that was originally estimated to cost $3.5 trillion. Democratic lawmakers are now negotiating what’s likely to be a scaled back version. The original proposals include:
- Extending the bigger child tax credit through 2025. The 2021 overhaul boosted the credit to a maximum of $3,600 per child from $2,000 (depending on the age of the child and income of the parents), expanded eligibility so even the lowest- income families could receive the full amount, and converted its distribution so that half of it would be doled out in monthly installments of up to $300 per child.
- For families earning under 150% of their state’s median income, capping the cost of child care for children under 5 at 7% of income.
- Subsidizing wages for child care workers who are often leaving for other fields because of low pay.
- Providing free universal prekindergarten for children 3 and 4 years old.
- Providing up to 12 weeks of paid family and medical leave to workers.
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