Child Care Prices Rose Significantly in 2020, Continuing Decades-Long Trend of Major Annual Increases

The average annual price of child care in America has increased over 220% over the past three decades — considerably faster than other essential family expenses — with significant annual increases in more recent years. Now, new analysis from Child Care Aware of America (CCAOA) has found that the average price of center-based child care for an infant in the United States in 2020 was over $12,300 — an increase of roughly $1,000 over the previous year. For all children under age 6, the average annual price of care is around $10,174, or roughly $200 per week.

Key findings from the report, which includes a state breakdown of child care prices across the country: 

• For a single parent, the average price of child care for one child would account for 35% of household income; In a majority of states, it would be over 40% of household income;
• In three out of four regions of the U.S., the annual price of center-based child care for an infant exceeds the cost of housing. In all four regions, the annual price of child care exceeds the annual cost of in‑state tuition at a public four‑year university;
• The difference between the cost to providers and the prices families pay is growing. One example from CCAOA estimates it costs $16,836 for a center in Delaware to provide care for one infant, while the price families pay for care is $11,761.
• Examples of high prices for center-based infant care in a number of states: 
  • Arizona: $11,848
  • Colorado: $15,881
  • District of Columbia: $24,378
  • Massachusetts: $22,577
  • New Hampshire: $13,609
  • New York: $16,588
  • Wisconsin: $12,984 
• Meanwhile, the average wage for child care professionals has only increased by .59 cents an hour over the past two years, to roughly $12.24 an hour or $25,460 annually

Here is the reality of the child care crisis: 

• The labor-intensive nature of caring for infants, toddlers, and preschoolers means that quality care costs more than education for older children, but, unlike the public school system, most parents must cover these costs on their own. 
• Parent fees alone are not enough. Early childhood programs operate on razor thin margins, often relying on federal, state, and local funding to stay afloat. 
• Due to decades of underinvestment, child care providers cannot afford to raise prices, as it may result in families who are already struggling to pay for child care leaving their programs
• Four out of five center-based care providers reported that they are experiencing staffing shortages. 
• This isn’t a matter of making quality care less expensive, but rather of prioritizing investment in the child care sector to ensure costs can’t continue to rise and child care centers can stay open. 
• Unlike other industries, there is not currently a  market-based solution to America’s child care crisis.
• Families cannot afford the costs of child care and child care providers, who are struggling to provide quality services without adequate compensation, cannot raise prices in order to pay their employees. 

At the end of the day, America’s child care system hinges on whether Congress allows the child care sector to continue deteriorating toward collapse.

• The unaffordable price of child care will continue to rise, pricing out even more families each year or limiting the options they have;
• Near-poverty wages for child care workers are leading to a record exodus from the workforce and increasingly limited supply of care options for families. 
• Inequitable access to high-quality options will continue to rise (half of Americans already live in child care deserts.)
• The lack of affordable and accessible child care resources creates barriers for parents to work, which is slowing overall economic recovery.