Daycare or Christmas gifts?: How the rising cost of childcare is affecting Utah parents

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FILE: Amy McCoy serves lunch to preschoolers at her Forever Young Daycare facility, Monday, Oct. 25, 2021, in Mountlake Terrace, Wash. Child care centers once operated under the promise that it would always be there when parents have to work. Now, each teacher resignation, coronavirus exposure, and day care center closure reveals an industry on the brink, with wide-reaching implications for an entire economy’s workforce. (AP Photo/Elaine Thompson)

UTAH (ABC4) – As costs of childcare continue to increase, parents are being forced to make some tough choices.

A recent nationwide survey revealed that 1 in 3 parents have had to choose between paying for childcare and buying holiday gifts for their children. The same survey showed that 44% of families pay over $1,000 per month for daycare and related services. With costs of kid-related care increasing by 210% from 1990 to 2019, how will tuition requirements for childcare facilities affect parents in our increasingly expensive state?

“It’s very difficult for the parents,” says Jessie Fan, professor and department chair of the University of Utah’s department of family and consumer studies. “If there’s no reliable, quality childcare, even if you go to work, obviously you can’t focus because you’re worried about these things.”

Factors like negative impact on job performance and the inability for many families to afford childcare without aid are playing a role in the fact that lower-income parents might be priced out of childcare.

But why are costs increasing so dramatically?

In simple terms, childcare costs are going up because workers’ pay is being raised. Lit’l Scholars Daycare, which has locations in Salt Lake City and Taylorsville, raises tuition each year, usually somewhere between 1% and 3%. Brittany Greenwood, who owns Lit’l Scholars – in addition to three Davis County preschools – says paying workers is the biggest expense associated with the childcare industry. All of the increased revenue gleaned from tuition raises at Lit’l Scholars goes to paying workers more, she says.

And now, with the pandemic-associated labor shortage ever-looming, daycare centers must pay workers even more to keep them in their roles.

“Without subsidy, if you have a labor shortage, you have to pay childcare workers more in order to keep them employed in those centers,” Fan says. “And where does that money come from? It has to come from tuition.”

Greenwood adds that general inflation has caused an increase in costs for other necessary supplies like food, cleaning materials, and pandemic-related PPE.

“The cost, due to inflation has gone up for us as providers, as well,” she says. “And then also, maintaining and attracting quality staff to take care of the children. So that’s where the cost is coming from.”

In addition, Fan says these days, parents are demanding more direct involvement with their children’s daycare experiences, which takes time, money, and often, even more workers. Locally, she has seen childcare centers having to hire more administrative staff to keep up with the demand for parent involvement.

“If teachers need to interact with parents a lot during daycare time, or if administrators need to interact with the parents more, then of course, that takes time and that time gets translated into cost,” Fan says. “From a child development perspective, that’s great, but unfortunately, that also means that there’s higher costs associated with that because of the time involved.”

And since daycare centers are now operating with a greater degree of hands-on involvement from parents, families that can no longer afford these centers may end up getting subpar care for their children. Without some sort of third-party subsidy, some lower-income populations can be priced out of quality childcare. Though Greenwood says they haven’t seen much student turnover at Lit’l Scholars, some parents have gone from booking full-time daycare to only bringing children in part-time.

“If there’s more involvement, it’s higher cost, and there would have to be some inequality in terms of care quality associated with income and pricing,” Fan says.  

Rising housing costs in Utah are also playing a role in parents’ ability to pay for care. Greenwood says that she’s seen parents move out of the area to find affordable housing, but says this could lead to limited childcare options for these families relocating to rural areas. The lack of affordable housing is also affecting daycare workers, noting that two of her staff members had to move back to their respective family homes in southern Utah.

“Even if your income increases, the real value of the income, with the current inflation, is probably decreasing a little bit,” Fan says. “I wouldn’t be surprised if lower-income families with children are going to have to make some trade-off choices.”

Luckily, there are several programs in place that aim to help parents struggling to pay for childcare. Utah Community Action’s Head Start program is a free preschool that services over 2,000 children annually. Lower-income families can also apply for childcare assistance through DWS.

Greenwood says that 65% of the clients at the Lit’l Scholars Taylorsville location are currently receiving childcare assistance.

But still, the existing programs might not be enough, especially with child tax credit payments expiring in January. Fan says that an increase in government subsidy could allow childcare centers to pay workers more, while still keeping costs down for families.  

She also points to a new community-based practice called ‘childcare pods’ as a possible answer. In this type of arrangement, multiple families join forces to share childcare responsibilities.

“You could have 4 or 5 families get together and they could hire somebody or take turns watching these 4 or 5 children. It’s almost like Rover for dog care,” Fan says.

While details for safety and regulations would inevitably need to be ironed out to make this practice feasible on a large scale, parents are certainly getting creative to make things work. But still, Fan and Greenwood both acknowledge that fixing this problem is a complex amalgamation of a variety of factors.

“Society has to balance between living wage for childcare workers and affordability for parents and also quality of childcare, and that’s a very difficult balance,” Fan says. “You can’t really say this is the most important goal or that is the most important goal. All three are very important and in the end, there needs to be a compromise somewhere.”  

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