It’s more bad news for single-parent and low-income families: child care is crazy expensive. Wages have stagnated for years, while the costs of child care service have skyrocketed.
The Economic Policy Institute has released a study that shows just how dire the situation is for parents of young children.
EPI started with what they call the basic family budget threshold: the family income required to maintain a minimum standard of living (depending on the area, that number varies from the mid-$40 000’s to just over $100 000 in an expensive place like Washington, D.C.). It is possible in some cases for a single parent to earn enough to meet this minimum family budget, but it would likely be a struggle.
The cost of child care service in each area was calculated as a percentage of the family budget threshold. They found that in two-child families, child care costs exceeded the cost of rent for over two-thirds of families. As a percentage of the budget threshold amount, two-child families end up paying between 11 and 33 percent of family income. One third of a family’s income spent on child care makes it all but impossible for a family to get ahead financially. With only two-thirds of their earnings (and maybe only one-third after taxes), there is very little room for groceries, rent, a vehicle, family outings, internet, and clothes, let alone short-term and long-term savings.
The news is even worse when it comes to minimum wage earners. Costs for child care service in a region were measured against the minimum wage in the same area. A single parent earning minimum wage full-time will have to pay from 32 percent to over 100 percent of their earnings in child care. You read that right: child care service for an infant for a year is more expensive in some areas than a full-time minimum wage job.
This is likely one of the reasons why Bernie Sanders wants a $15 nation-wide minimum wage. Because these child care costs are insane. A young mom can’t work for less than she’s paying for child care. This virtually guarantees that single moms who would otherwise be working at a minimum wage job, need to go on welfare.
Having children shouldn’t be a poverty sentence for anyone.
