Childcare is so expensive that educated women are dropping out of the workforce because they refuse to put more than 25% of their paycheck toward the cost

With a degree in microbiology, Parks worked in pharmaceutical manufacturing until the birth of her oldest seven years ago. And she loved it. But now as a mom of three—her youngest is only 21 months—Parks is a reluctant stay-at-home mom with no real sense of when—or if—she’ll be able to rejoin the workforce. 

“They’re right around the corner, why am I not working?” Parks recalls remarking as she drove past the companies late last year. “I loved working. I loved my job. I’ve never felt a greater sense of self worth and pride than when I worked,” Parks tells Coins2Day. “I love my kids too, but I’m so tired of having them cry about the oatmeal that they asked for.”

The biggest reason this well-qualified woman isn’t in the workforce? Parks can’t find affordable childcare coverage. “When we started running the numbers, there was basically no way that we could really cut childcare that made it cost under $100,000.” And realistically, Parks doesn’t think she could ask for a salary that high. 

With her husband’s job as an investment banker covering the family’s considerable living expenses in Maplewood, N.J., Parks says to take a job outside the home, she’d need to earn enough to pay for full-time childcare. “I have to cover the cost,” she says. “My ideal goal would be enough to pay for childcare and max out retirement, and I feel like that’s even like—why don’t I just wish for a pony, too?

“I loved working and want to have a professional life again, but the costs, logistics, and the high likelihood of needing to be in-person [working] at pretty set hours, makes it all feel unrealistic,” Parks says. 

Like Parks, millions of Americans—mostly women—grapple with the financial breaking point of childcare. Around 4.5 million Americans remained unemployed in January because they were caring for children not in school or daycare. 

“It’s not like I’m looking for fancy programs or something,” Parks says. “It’s either stay home and wait until all my children are in school—which given the number of half days and vacation days and summer camps, there are still very considerable costs and inconveniences. Or go back to work, make no profit, and still be juggling drop-offs, pick-ups, and probably the need to work after I put all three kids to bed.”

Nearly nine in 10 Americans believe that more parents would continue to work if more affordable childcare was accessible, according to a nationally representative survey of 2,091 U.S. Adults The Harris Poll recently conducted on behalf of Coins2Day.

But how much are most Americans willing to pay? What percentage of their paycheck are most parents willing to devote to childcare costs before they consider leaving the workforce? 

Not much, the survey results show. If childcare costs eat away a quarter of their paychecks, nearly half of parents with young children under the age of 5 would consider being a stay-at-home parent. 

Americans want affordable childcare that just doesn't exist

Parks is actually an outlier in her willingness to spend almost 100% of her paycheck on childcare in order to work. Fewer than one in five (16%) of parents with young children would be willing to even spend more than 75% of their paycheck on childcare, Harris found. 

On average, U.S. Families spend an average of 17.8% of their income on childcare, according to recent analysis of U.S. Census Bureau spending data. But that’s an average, and it varies fairly dramatically by where families live. Parents in Nevada, for example, spend about 28% of their income on childcare—the highest percent nationwide. It’s not surprising considering that 72% of Nevada residents lived in a childcare desert pre-pandemic. 

There's a generational divide when it comes to spending on childcare in order to maintain one's career. Younger Americans—those who are part of Gen Z and millennial generations—are much more likely to think it’s reasonable to spend much more on childcare than older generations. 

When asked what they considered a reasonable dollar amount for childcare, Americans said an average of $617 a month was fair game, according to Harris. Again, younger workers were more willing than older Americans to pay more for childcare. And fathers were willing to spend about $100 more per month than mothers ($668 versus $568), echoing research released last year that found, in general, men are more willing to pay for household help than women. 

Of course, even at $617 per month, that’s far below what the average American family pays. The national average price of childcare was around $10,600 annually—or about $883 per month—in 2021, the most recent data available from Child Care Aware of America. 

The Woman’s Bureau of the Department of Labor recently calculated childcare costs to be between $5,357 and $17,171 annually. But that range is based on 2018 data that was inflation-adjusted to 2022 dollars. So while it takes into account the effect of rising consumer prices overall, it doesn’t address the substantial industry shifts experienced since the onset of the COVID-19 pandemic—meaning it’s likely a lowball range. 

The financial burden of childcare is not just relegated to the “top line, big number” of what the tuition fee is either, says Molly Weston Williamson, a senior fellow at the Center for American Progress. There are a plethora of related costs that go hand-in-hand with children’s care—from babysitting fees to extra costs related to school and summer vacation days to time off needed when a child inevitably gets sick. 

“Are you able to get care that meets the timing, structure, and location of your work needs at a price that you can fit into your budget, even at a stretch—that's the first and foremost piece,” Williamson tells Coins2Day. But even among parents who are able to secure childcare that meets their needs, there are still gaps that exist—school closures and child sick days—that will require additional coverage and funds. 

The financial burden of childcare frequently falls on the mother—and that's keeping them home

While finances aren’t the only reason that parents, particularly women, exit the workforce, it is a big factor. More than a third of stay-at-home parents ​​said they left their jobs to care for their children because of financial difficulties in affording childcare (19%) or limited childcare availability (17%), according to the recent Harris survey. Among former and current stay-at-home parents, 36% say they felt forced into leaving the workforce to care for their children. 

Moreover, researchers who analyzed the recent DOL childcare data found that a 10% increase in median childcare prices was associated with 1 percentage point lower county-level maternal employment rates. 

With parents facing increased scarcity of availability and rising prices—childcare costs have jumped 25% in the last decade alone—not to mention stricter health policies by providers and outbreaks of COVID, RSV, and regular seasonal illnesses equating to more sick days, it's no wonder that many parents are contemplating putting their careers on hold. 

Even for parents who can find and afford childcare, the current environment is still a challenge, Williamson says. Many working parents have been forced to keep their sick children home and still pay for childcare they couldn’t use.

Since the pandemic, women’s jobs have disproportionately been affected. Women make up 100% of net labor force leavers since February 2020, according to analysis by the National Women’s Law Center. As of January 2023, there were 217,000 fewer women in the labor force than in February 2020.

And the current childcare crisis may get worse before it gets better. During the pandemic, Congress allocated more than $50 billion in funds to help the childcare industry. Those typically trickled down to individual daycares, in-home providers, and childcare centers in the form of stabilization grants that reportedly helped approximately 200,000 providers stay open. But this temporary support is set to phase out later this year, which may spark another round of permanent childcare center closures. 

There are long-term consequences when parents can’t work 

Staying at home and caring for children may help American parents weather the short-term costs of child-rearing, but there’s still a price to be paid. More than half (52%) of stay-at-home parents with children under the age of 5 believe their careers have been negatively affected by that choice, according to the Harris survey. And 68% of both men and women believe mothers get penalized more in the workforce after staying home to care for children. 

That career hit lingers. About half (51%) believe that stay-at-home parents rarely recover professionally—even after they return to the workplace. And when it comes down to it, eight in 10 Americans believe that keeping both parents in the workforce ensures a more stable financial future for families, Harris finds. 

“When women leave—or really, are pushed out of the workforce—because they don't have the care support they need, it's not just a short-term economic effect of not earning an income during whatever that period of months or years, that has an impact on your earning for your title rest of your life,” Williamson says. 

The lifetime estimated losses associated with the so-called “motherhood penalty” can range from $161,000 to $600,000, according to the Women’s Institute for a Secure Retirement. Moreover, the Institute for Women's Policy research finds that 43% of women experience at least one year with no income—nearly twice the rate of men. That can leave many women financially vulnerable, be it in a divorce, or later in their lives because they haven’t been able to save as much for retirement. 

It’s a risk that’s not lost on mothers like Parks. “I gave up my career so that my husband could really pursue his. Not only has it put me behind professionally, I think my skills are somewhat rusty.” So even when the time comes when Parks can get back into the workforce, it may not be at the level or even the field that she was before becoming a mother. 

When parents step out of the workforce to care for children, it has broader, negative effects on the overall U.S. Economy. Recent research finds that the childcare crisis costs the U.S. Economy $122 billion a year in the form of lost earnings, productivity, and revenue. When a parent, typically a mother, passes on a promotion, drops down to part-time or leaves the workforce, it has a cumulative effect on their personal financial security, their family, the workforce and even the overall GDP. 

Eliminating childcare costs from the budget of a family with two children would boost a mother’s lifetime earnings by $97,000, on average, according to research from the Columbia Center on Poverty and Social Policy. It would also decrease the rate of children living in poverty from 11% to 7.4%.

Access and scheduling is another big issue facing working parents

But costs, of course, are not the only barrier. Access plays just as much of a role. Even in areas of the country where childcare options are more plentiful, finding care outside of traditional working hours or providers that offer flexible, part-time schedules remains extremely challenging for parents. 

“There's this lie that you get sold about how daycares can be really expensive, but once your kids are in school, it gets better. And I think everyone kind of buys into this. Short-term pain, but it won't be forever,” Parks says. 

What nobody really talks about, says Parks, is that the coordination and planning needed to juggle children’s schedules—it doesn’t get easier, Parks says. In some cases, it gets harder. Parks’ school district, for example, schedules 14 half-days throughout the year—and that’s not including actual full vacation days or summer break. For a parent trying to cobble together coverage, it makes it incredibly challenging. The half days alone would eat up any paid time off Parks might accrue—and part-time work is not always a solution. 

“The options are grim and all distasteful,” Parks says. “Nobody is crying a river for an investment banker’s stay-at-home wife. But I often think, if it’s this hard for us, how the hell are other people swinging it?”