Even most affordable US childcare costs surged 50%: Survey

NEW YORK – The cost of what was once one of the most affordable options for childcare soared in 2024, putting it out of reach of many working families, according to a new survey.

Fees at childcare centres based in people’s homes – long embraced by some parents as a more affordable option than formal daycare centres – soared by almost 50 per cent in 2024 to US$344 (S$464) a week, the survey by online caregiving marketplace Care.com found. Now, prices of the two options are nearly identical.

A decline in federal aid and a shortage of workers has left the childcare industry on the brink, with more than half of providers in a separate survey aware of at least one programme recently shutting down in their communities.

During the election, President Donald Trump’s campaign said he prioritised expanded access to childcare and paid family leave during his first presidency, though details on how it will be tackled in this administration are yet to be seen.

Some 90 per cent of parents lost sleep over caregiving stress, while 80 per cent reported crying, the survey found. The stress has also been linked to health issues, and almost a third of respondents said they have considered suicide or self-harm, said Care.com. 

The cost for a nanny for an infant is now about US$43,000 annually, 8 per cent higher than a year earlier, while for a toddler it jumped about 14 per cent for a roughly US$44,600 annual price tag. Daycare centre costs also rose between 7 per cent and 8 per cent on the year. 

“Unfortunately, the trends have worsened, particularly with family-care centres,” said Care.com chief executive Brad Wilson in an interview. “You’re really in an environment where a lot of centres have shut down. In addition, you’ve had the pool of caregivers decrease and federal funding dried up.”

Childcare prices, which in many cases outpace housing costs, are increasingly squeezing American parents. The end of US$24 billion in Covid-19 era aid in late 2023 was yet another blow to the industry that had already faced an exodus of workers during the pandemic, and been plagued by decades of underfunding. 

Nearly half of the providers surveyed by the National Association for the Education of Young Children in January 2024 said they had increased tuition, blaming staff shortages and higher costs for necessities like rent and insurance. Many operators face stiff competition for workers from other industries like retail or fast food that pay better.

The financial reality is forcing some families to make tough choices, including causing one parent – typically the mother – to drop out of the workforce.

Care.com, which surveyed 3,000 adults in November 2024, also found that a third of parents are dipping into their savings to cover costs. 

“Everybody knows how broken it is,” Mr Wilson said of the childcare industry. “It’s going to be unsustainable.” BLOOMBERG