What you probably already know: Child care costs are going up. In 2024, the average annual price of child care in the United States was $13,128, a 29% hike from just five years ago, according to a new analysis from the nonprofit think tank Child Care Aware of America. The increase outpaced the national inflation rate by 7%. A married couple needed to spend 10% of their median income to afford last year’s rate for child care centers, while a single parent had to spend a whopping 35%. Child care for two children exceeded annual mortgage payments by as much as 78% and cost as much or more, in some cases, as median annual rent payments and annual in-state university tuition. The price of daycare and preschool has also climbed since the pandemic, rising about 22% between January 2020 and September 2024, according to the Bureau of Labor Statistics’ Consumer Price Index for All Urban Consumers.
Why? The cost of child care ranges widely by state and region, with the average price of care for two children exceeding average household costs in every part of the country except the West. Care is most expensive in the Northeast, where it averages $34,656, far more than average housing costs of $28,681. The average cost of infant care (at a child care center) for a married couple in the state of Washington was $21,348, or 15% of their median income, but just $8,632 — or 8% of the median income — for a couple in Alabama. Child care centers face high operating costs, from insurance to payroll for trained, qualified staff (most of whom are women). They’re also subject to strict regulations on staff-to-child ratios, space requirements and safety standards. Unlike K-12 public education, the U.S. child care industry is largely private and not widely subsidized by the government, pushing more costs onto parents.
What it means: Current child care costs exceed national guidance for families receiving federal child care subsidies. Last year, the U.S. Department of Health and Human Services announced a rule to limit the amount these families pay to no more than 7% of their household income. Furthermore, despite the high cost of care, the average child care worker earns $33,140 (about the same as a janitor), meaning they’d have to spend anywhere from 44% to more than 100% of their average wage, depending on where they live, to afford center-based care for two children. Child care is simply too expensive for average families, and for care centers, but solving the problem is difficult because the market is private. The last time Congress stepped in to provide care support for young children was during World War II, when a large number of women entered the workforce. Thousands of federally funded centers supported these working mothers, who kept the American economy and war machine running, but the program stopped after the war ended. Today, most parents have two options: finance child care until their child enters kindergarten, or stay at home — options that are likely contributing to historically low birth rates, particularly among young adults. A 2024 Pew Research Center survey found 60% of U.S. adults believe more people would be encouraged to have kids if the federal government provided free child care.
What happens next: Many other developed countries offer federally funded child care. Nordic nations provide the most generous programs, including free care for low-income families. Denmark even helps parents who choose to stay at home or hire a nanny. While President Trump’s early budget draft proposed ending Head Start, it has since backtracked and no longer calls for changes to the $12.27 billion preschool program for low-income children. During last fall’s vice-presidential debate, JD Vance expressed support for federal subsidies for informal child care to make it easier for parents, especially mothers, to stay at home with their kids. Child Care Aware of America urges Congress and states to prioritize child care in their tax policies and budget decisions to fund grants for care centers, lower family copayments, and expand subsidy eligibility for families.