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Good Question: Why Is Child Care So Expensive?

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MINNEAPOLIS (WCCO) – We love them to death, but any parent knows, it’s expensive to raise a child. New numbers from the USDA estimate the cost to raise a boy or girl born in 2012 is $241,080 – up 2.6 percent from two years ago.

The largest expenditure is housing – about 30 percent. Child care/education (not including college) is second at 18 percent and food comes in third at 16 percent. Transportation, clothing, healthcare and miscellaneous make up the rest.

In 1960, 2 percent of what we spent on children went to child care/education. Researchers attribute much of the increase over the past 40 years to many more mothers in the workforce. USDA researchers include day care, babysitting, private school tuition, books, food and supplies when calculating child care/education costs.

“You’re entrusting your precious, little kids, so I guess it comes at a price,” said Shannon Albright, a mother from Minneapolis.

In Minnesota, the cost of child care is among the highest in the country. The average cost of infant care is $13,579 a year. For a four-year-old, it’s $10,470 a year.

“Families are moving from less regulated to more regulated care,” said Chad Dunlkey, CEO of New Horizon Academy. They operate 60 day care centers in Minnesota.

He says most of the money is being spent on staff and the classrooms. He estimates between 60-80 percent is spent on staff, 10-20 percent on the building, 5 percent on food and the rest split up with expenses like insurance, transportation and supplies.

“In Minnesota, you’re paying $200 a week for childcare and you need childcare 40 hours a week, you’re paying $5 an hour,” he said.

“So, really when you break it down to how much you pay an hour, you pay a babysitter more an hour.”

Dr. Debra Fitzpatrick directs the Center on Women and Public Policy at the Humphrey School. She says the business of day care is labor intensive. Minnesota state law sets very high standards when it comes to the education and experience of lead teachers. It also sets strict rules for the ratios of teachers to children.

“Clearly, those individuals who are taking care of our children aren’t making a lot, but a lot of them are required to make the industry go,” she said.

In Minnesota licensed day cares, the state requires one teacher for every four infants, one teacher for every seven 2-3-year-olds and one teacher for every ten 4-year-olds. In home family day cares have less stringent requirements, but they are still more regulated than other states.

“Parents are looking for high-quality and high-quality costs money,” Dunkley said.

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