It's Time to Rethink the Issue, Ivanka: Child Care Costs Are the Problem

Posted: Jul 28, 2017 1:06 PM
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It's Time to Rethink the Issue, Ivanka: Child Care Costs Are the Problem

Editor's note: This column was authored by Kelly R. Lester.

A few weeks ago, Ivanka Trump sat down with Sen. Marco Rubio to discuss implementation of a federally mandated paid child leave program. However, Ivanka is ignoring one of the larger issues facing American families: the cost of raising a child. Ivanka should be focused on reducing the growing cost of child care while maintaining quality by encouraging states to lift regulations on child care.

In President Obama's 2015 State of the Union address, he said that child care affordability was the key to making middle class families feel secure in times of uncertainty and change. Currently, the US offers federal subsidy programs—such as the child care tax credit, the Child Care Development Block Grant, Temporary Assistance for Needy Families, and Head Start—as ways to reduce the cost of child care. However, most of these programs do little to alleviate the financial burden of child care––especially for middle class families who don’t qualify.  

 Child care costs vary heavily depending on the state they are in. Studies conducted by Economic Policy Institute have measured that the average monthly cost of child care for a family with one four-year-old ranges from $344 in rural South Carolina to $1,472 in Washington, D.C. That number is even higher for families with infants or with more than one child. The study also found that “in 33 states and D.C., infant care is more expensive than the average cost of in-state college tuition at a public four-year university.

For part-time workers, it is even more difficult to afford childcare. A part-time employee earning minimum wage and working the maximum number of hours possible will have to pay 102 percent of their earnings in DC, 81.4 percent in New York, 90.3 percent in Massachusetts, and 82.1 percent in Maryland for infant child care.

The reason many of these states have unaffordable dependent care is because of regulations. Many state regulations that are meant to certify quality of care actually increase the cost of care while quality remains the same. Though the regulations differ state to state, minimum regulations usually include requiring immunization records, setting maximum group sizes, limiting child-to-staff ratios, and imposing education minimums and/or specialized training requirements for the provider. All states require licensing for day cares, and all states except Louisiana require licenses for home run daycares. In 11 states, somebody being paid to care for just one child in their home must apply for a license.

These regulations often do more harm than good. For example, a study by the Mercatus Center at George Mason University found that structural measures of child care quality, such as group size limits or child-to-staff ratios, do not actually enhance child care outcomes or safety consistently. These regulations generally just increase the cost of childcare while decreasing the salaries of childcare providers.

Early, non-parental childhood care has been proven to be an extremely important part of childhood development and the high cost should be a concern for working parents everywhere. Many regulations are put in place to improve the quality of childcare, but if they do not improve care and they are increasing the cost of business then it is in the state's best interest to lift these regulations. So before looking towards a federally-funded paid leave program, Ivanka, Congress, and state leaders should take a close look at the unintended consequences of well-meaning regulations on child care.

Kelly Lester studies economics & mathematics at Pace University. She enjoys researching labor economics, and her policy interest include welfare, minimum wage law, and education. 

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