“In over half of American households, the single largest expense is child care, even exceeding the cost of housing.”
— Ivanka Trump, assistant to the president, in Berlin, April 25, 2017
Ivanka Trump, the president’s daughter, has said she wants to help craft a solution to a vexing problem for American families: the soaring cost of child care. In a forum in Berlin, speaking without notes, she made an interesting observation — that in “over half” of American households, the cost of child care exceeded the cost of housing.
Is this the case?
The problem with a sweeping statement such as this is that there are many types of households with children. Younger children, who (if a parent is working) often need a babysitter, day-care center, preschool or other option, will require more care than children who spend most of the day in school. Wealthier Americans are better able to handle the cost of child care, whereas it often is a burden for poorer families.
Moreover, the data does not include families in which one spouse simply stops working because child care has become too expensive. Those families would be recorded as having little or no child-care expenses, even though this option came at the cost of one person’s salary. A 2015 Washington Post poll found that more than three-quarters of mothers and half of fathers in the United States say they’ve passed up work opportunities, switched jobs or quit to tend to their kids. The Center for American Progress created a nifty calculator to show what the long-term impact is of such a decision.
“We know a lot of families opt out of child care due to cost, either by also opting out of work (it just doesn’t pay to work), using split-shift parenting schedules, relying on kin care, and using less than ideal care either in terms of quality or hours,” said Marybeth Mattingly, director of research on vulnerable families at the University of New Hampshire.
So, when viewed only through the prism of aggregate data, it is hard to see much support for Trump’s comment. But an examination of the 2015 consumer expenditure survey, compiled by the Bureau of Labor Statistics, finds that the costs of child care greatly increase when children are under age 6.
The BLS survey lists child care under the heading of “personal services,” of which about 92 percent are babysitting, day-care centers, preschools and the like. (Here’s a detailed breakdown of the data.) For married couples with children under age 6, the mean cost is $4,101, 10 times the average for all households. The mean cost drops to $972 when the oldest child is between 6 and 17.
Even so, mean housing costs for families with children under age 6 are $27,153 — much higher than child-care costs.
But the portion of family income devoted to child care begins to climb when you drill down and look at costs for families with two children or families who have lower incomes — or families in particular regions. Some of the most detailed work has been done by Child Care Aware of America, which assists families seeking help with child care.
According to Child Care Aware’s analysis of BLS data, the average annual day-care cost for two children is higher than the annual rate of rental costs in every state in the United States and the District of Columbia. It is also higher than annualized mortgage costs in 35 states and the District. Jessica Tercha, a researcher at the organization, noted the group uses the average cost of child care by state. “High-quality programs could conceivably be much higher in cost than the state averages,” she said.
The group also looked at regional differences. In both the Midwest and the Northeast, the child-care cost for two children exceeds the cost of housing — and it comes pretty close in the West and the South.
As we noted, this data does not reflect families in which one caregiver stopped work or cut back on hours to care for a child. The Pew Research Center found that there has been a rise in stay-at-home mothers in recent years.
Another survey, by the New America Foundation, found that the average cost of full-time care in child-care centers for all children ages 0-4 in the United States is $9,589 a year, higher than the average cost of in-state college tuition ($9,410). And a poll from National Public Radio, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health “found that nearly one-third of parents who have a fee for child care say the cost has caused a financial problem for their household — and of those, more than 70 percent said it is a somewhat or very serious problem.”
The University of New Hampshire, using a different data set than Child Care Aware, has separated out the impact on poorer families. About 1 in 4 families with young children are burdened by the cost of child care, spending more than 10 percent of family income on child care, according to a 2016 report. On average, poor families spend 19.8 percent of their income on child care — more than double the national average, the report said.
Update: A White House official said that Trump meant to refer to the child care costs for poor Americans, specifically a Census Bureau finding issued in 2013 that poorer families making less than $1,500 a month paid nearly 40 percent of their income for child care. The official also cited a 2015 report by the left-leaning Economic Policy Institute that in 500 of 618 select areas around the country, child care costs exceed rent. The report relies on EPI’s family budget calculator, which measures the income families need in order to attain a modest yet adequate standard of living. “Child care costs are particularly high for younger children,” the report said. “In 33 states and the District of Columbia, infant care costs exceed the average cost of in-state college tuition at public 4-year institutions.”
Update, April 28: The University of New Hampshire crunched the data for The Fact Checker and found there was little support for Trump’s statement when looking at average expenses. “At every income quintile measured in the American Community Survey [including the bottom 20 percent], average monthly housing expenses dramatically exceed average child care expenses measured in the Current Population Survey for families of young children who pay for child care,” Mattingly said. However, these are two different surveys, so not directly comparable, and the reported child care costs appear oddly low, she said.
The Pinocchio Test
Trump has highlighted a serious issue — that the high cost of child care is increasingly a burden on American families. In households with two or more children, the cost of day care exceeds the cost of housing in many states. The problem is especially acute for low-income families. The data also does not reflect the impact of parents leaving the workforce because the cost of child care is prohibitive.
As we suspected, Trump slightly flubbed her talking point, as she would have been on more solid ground if she had focused on low-income households or families with small children, not all households. We originally thought this comment would have been worthy of Two Pinocchios. But Trump was speaking off the cuff and we don’t play gotcha here at the Fact Checker, so we will leave this without a rating.
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