Families Struggle Paying for Child Care While Working

Finding a reputable child care facility or person to watch your child or children has become more difficult and costly. The EPI articles compares the cost to other items as well as costs in each state. For low wage workers the costs have become unsustainable. Policymakers have been pushing for addition sources for preschool care. New Mexico has instituted a plan for childecare.

Child care is unaffordable for working families across the country—including in New Mexico, Economic Policy Institute

EPI’s updated fact sheets calculate the costs of child care in every state, showing that child care is unaffordable for working families across the country. This early care and education is crucial for children not only because it allows their parents to participate in the labor force, but also because it boosts their socialization, cognitive development, and school readiness. Childcare is one of the largest expenses in a family’s budget partly due to early care and education requiring long operating hours for better access and a low student-to-teacher ratio for better quality.

Child care costs vary widely across the country, ranging from as low as $521 per month in Mississippi to as high as $1,893 per month in Washington, D.C., for a household with one 4-year-old child. This variation is even wider across counties and metro areas, as can be seen in our recently updated Family Budget Calculator.

In our fact sheets, we use state-level data from the Department of Labor and Child Care Aware of America on the cost of infant and 4-year-old care to determine child care costs for one- and two-child families. We incorporate the latest available data, in most cases for 2023, and adjust everything to 2024 dollars using the appropriate indexes.

Below, we use New Mexico as a case study to show the different data points offered in the fact sheets. As federal COVID-19 relief funding for child care stabilization grants came to an end in September 2023,  New Mexico was the first of a number of states to step up and address the child care needs of working families. While these investments have already begun having positive effects, there is more work to be done.

In New Mexico, infant care remains more expensive than housing and college tuition (see Figure A). The average annual cost of infant care is more than $14,000, or nearly $1,200 a month. Child care for a four-year-old still totals nearly $10,000 per year, or more than $800 a month. We often consider housing or rental costs as the largest expense a family must face. But in New Mexico, infant care for one year exceeds rent by more than 10%.

“Child care costs in the United States,” Economic Policy Institute. Cost per state are in this particular article. Just follow the link.

One of the hallmarks of a middle-class lifestyle is the ability to invest in one’s children and send them to college. Families often save for years to afford public in-state tuition. Yet, infant care costs families 86% more than in-state tuition for a four-year public university.

Infant care for one child takes up 21% of median family income in New Mexico.1 The Department of Health and Human Services considers child care affordable if it costs no more than 7% of a family’s income. This threshold would imply that only 10.8% of families in New Mexico can afford infant care. Care for two children—an infant and a 4-year-old—would take up a whopping 35.8% of median family income in New Mexico.

Minimum wage workers and early child care educators in New Mexico take on an even larger burden to cover child care costs. Figure B shows that minimum wage workers would need to spend 57% of their annual earnings just to pay for child care for one infant. Even in Santa Fe County—which has the highest local minimum wage in the state ($14.60)—it would take 46% of annual earnings to cover infant care. Further, a median child care worker would have to spend nearly half (47%) of their earnings to put their own child in infant care.

Advocates and policymakers nationwide have been pushing for universal pre-K for decades as a way to provide dependable, free child care to families. After a decade-long campaign, New Mexico passed a constitutional amendment in 2022 guaranteeing a right to early childhood education. In doing so, they created a funding stream of about $150 million per year, most of which will help subsidize early childhood programs. Given that this amendment passed so recently, we do not expect to see the impacts of this legislation in our fact sheets yet.

This aid has helped parents and caregivers join or stay in the workforce, advance professionally, and reach financial stability. Despite significant gains for the children and families who rely upon child care, wages for the workers who administer this essential care remain insufficient at keeping them out of poverty. Policymakers should invest in this workforce by raising wages. A recent report commissioned by Organizers in the Land of Enchantment (OLÉ) estimates the first-year cost to the state of adopting and subsidizing wage and career ladders. Advocates and state policymakers can use EPIs child care fact sheets in tandem with this report to push for legislation that invests in New Mexico’s children.

Our fact sheets show child care is unaffordable for working families everywhere in the country, and it’s even further out of reach for minimum wage workers and the very workers that administer child care. New Mexico’s investments mark an important step toward affordable child care, but investments like this are needed across the country. Further, to fully realize these investments, we must ensure that our child care workforce is well-paid, empowered to unionize and engage in collective bargaining, and able to afford the same quality of care for their own children.

Note

1. Median family income refers to families with at least one child under age 6.