Soaring US childcare costs are weighing on spending and the labor market
According to the Bank of America Institute, rising childcare costs in the United States are already putting a strain on spending and the labor market, and that’s before a national program that could exacerbate the situation expires.
According to the data, the average household in the United States spends more than $700 per month on childcare, a 32% increase from 2019. Those earning $100,000 to $250,000 per year saw the greatest increase. This has already had an impact on spending: Since May, families with childcare payments have been spending less than the rest of the population and dipping into savings at a faster rate.
According to the institute’s report, there are also fewer dual-income households this year, with an average of 1.34 payrolls per month versus 1.39 in 2019, indicating that some workers have likely dropped out of the labor market to care for their children. Women are more likely to leave their jobs to take on that role, and experts warn that this will become more common as approximately 70,000 child-care programs face closure.
The report is based on an analysis of anonymized Bank of America customer accounts and was compiled before the Child Care Stabilization program expired. The end of that $24 billion program, which subsidized a portion of care and made it available to many, “could have a meaningful impact on consumers,” according to economist Anna Zhou in the report.
