INDIANAPOLIS  — Parenting is full of memorable experiences: Your child’s first step, your child’s first words, the first time your child says, “I love you.” These are the moments that make all the hardships worth it, the things you dream about when you decide to become a parent. But another glorious parenting experience, one that you won’t see in any Hallmark-type show but one that many parents know too well, is the day you make your last childcare payment. 

For many families in Indiana, childcare rivals housing for the top budget drainer. According to the Indiana Early Learning Advisory Committee dashboard, the parents of a preschooler in Indiana can expect to pay over $8,000 per year for high-quality childcare. Parents of infants pay even more, close to $12,000! 

The U.S. Department of Health and Human Services considers affordable childcare to be care that consumes no more than 7% of a household’s income. By that definition, the parents of an infant in Indiana would need to bring in $171,429 to “afford” high-quality care. Few households in Indiana meet that bar (around 8%, if we want to be more precise), especially early in their working lives, when, of course, they are more likely to have young children. 

It is noteworthy that these costs put childcare on a par with in-state college tuition, which many parents aspire to help their children afford. A good number will tuck away savings in 529s or child savings accounts over the course of a decade or two to be able to do so. But even if they can’t, there are a variety of options – grants, subsidized loans, work study programs, tax incentives, and the like – to support college access. This array of supports doesn’t exist for childcare.  
 
Even families who receive assistance through the Child Care and Development Fund (CCDF) tend to have out-of-pocket costs that still eat up a substantial share of their income. According to the June 2019 CCDF Fact Sheet published by the Indiana Family and Social Services Administration, nearly half of families receiving a voucher had overages – meaning the cost of care was more than the assistance they received – that equaled an average of 3.5% of their income. In addition, 29% of families had copayments that consumed, on average, nine percent of their income. So even with support, what these families pay falls outside the HHS definition of affordable. 

Meanwhile, over 1,600 families and 2,656 children that qualify for aid aren’t receiving any assistance at all, but are on the CCDF waiting list.

At the same time, the devoted staff who patiently guide our children through their most formative years of development are financially strained as well. 

In Indiana, the median hourly wage for Indiana’s preschool teachers is $12.13/hour, while childcare workers typically see about $9.75/hour in their paychecks. So at a time when a strong, stable relationship is perhaps one of the most important features of a quality educational program, staff can be expected to endure financial distress or to strike out for more family-sustaining careers on a regular basis. Some estimates put staff turnover at 30% per year in childcare centers.

It must be recognized, of course, that a child’s entrance into schooling doesn’t wholly obviate the need for care; in many cases, it just reduces the size and frequency of the payments. Before- and after-school care, holidays and summers, second or third shift coverage, sick and snow days – all of these are worthy of our attention and investment, especially if we are live up to our reputation as “A State that Works.” Lack of affordable, reliable childcare can be blamed for absenteeism and turnover that cost Indiana an estimated $1.1 billion per year in economic activity, according to IU Public Policy Institute. 

The push and pull of parents struggling to pay for quality care and centers struggling to maintain the staff necessary to provide it suggests that the only way to balance this equation is to look for funding streams elsewhere.

Until we do, three predictable things will happen: There will be individuals who want to work but will remain on the sidelines because it costs too much; the quality of childcare and of the wages and benefits to childcare workers will remain low, to the detriment of both young children and of workers in this industry; and a broad swath of Hoosier families will continue to be crippled by costly childcare bills. Perhaps we as a society should focus more attention on removing “last childcare payment day” from the list of memorable parenting moments. 

Erin Macey, PhD, is a senior policy analyst for Indiana Institute for Working Families and Indiana Community Action Association.