Biden’s State of the Union Didn’t Capture the Expensive Reality of Child Care

(Bloomberg) -- President Joe Biden took time out of his State of the Union address to address the surging cost of child care. But while he acknowledged the increasing burden, the numbers he cited failed to fully capture just how expensive things have gotten for some American families.

“Middle-class and working families shouldn't have to pay more than 7% of their income for care of young children,” Biden said during the speech on Tuesday, adding that “many families” have to shell out as much as $14,000 annually per child. But those in larger cities and families seeking in-home care or care for infants often expect to see much higher bills.

The advocacy group Child Care Aware of America, which researches child-care costs, warns against relying too much on national average prices because “distinctive differences” between states is lost. A total of nine states exceed the $14,000 figure that Biden quoted. In New York, the average annual cost for child care was $22,464, according to a Center for American Progress interactive tool that models costs and was published in 2018.

A lot of the data also doesn't account for more recent gains in prices, with labor shortages sending costs even higher. While the U.S. was facing a child-care crisis even before the pandemic, Covid took things to another level, directly impeding women's ability to return to the workforce, as well as causing some Americans to delay plans of having children at all. And finding vaccinated care has been a serious struggle, with some families even offering offering six-figure salaries to nannies who've gotten the shots.

Child care was the largest expense for families in the Midwest, Northeast, and Southern regions of the U.S., according to Child Care Aware of America. Only families in the West spent more on housing than they did on child care. Even parents in states with lower average rates are hurting from the lack of affordable care, said Mario Cardona, the chief of policy and practice at the group.

“Even if $10,000 might sound like a bargain for somebody in Washington, D.C., in a rural or a remote area in our country that has a lower cost of living where families may earn less, that's a fairly high number still,” he said.

Family breakdowns also impact what percent of overall income goes to care, the group found. A single parent can spend upwards of 35% of annual income on child care, a 250% increase from the share that a married couple puts toward it annually.

Infant Care

Care for an infant can cost substantially more than for older children, figures from the Economic Policy Institute show. In California, for example, that gap is more than $5,000 a year, on average.

Parents seeking additional features such as smaller class sizes and equitable pay to teachers can also expect to pay more.

In his speech, Biden said that he plans to “cut the cost in half for most families and help parents, including millions of women, who left the workforce during the pandemic because they couldn't afford child care, to be able to get back to work.” Biden's Build Back Better plan proposed to cap child care costs at 7% of a family's total income, and to provide free child care to three- and four-year-olds. The figure remains consistent with federal guidance issued in 2015. The White House didn't immediately respond to requests for comment.

Expanding access to affordable child care would boost the lifetime earnings for women with two children by $94,000, and would increase the number of women with young children working full-time by as much as 31%, the National Women's Law Center estimated in an April report.

Extending affordable child-care options can help families of color, as well as parents who are shift workers or who work nontraditional hours, said Cardona of Child Care Aware of America.

“By extending greater assistance and making child care one of those things that parents no longer have to worry about so much, there's a tremendous psychological benefit I imagine that families will experience,” he said. As a result, families may feel more equipped to buy a house, have another child and make life or career decisions that might have otherwise felt off-limits, he said.