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Hello and welcome to Business Daily on the BBC World Service with me, Monica Miller. In today's program... It's just astronomical to send your child to daycare. Paying for childcare can be expensive. The U.S. is the world's largest economy, yet it costs American families much more than other industrialized countries. You need to pay for childcare.
You need a lot of adult humans who are well-trained and well-compensated to care for smaller humans. American child care providers are facing a tough economy and high staff turnover rates due to burnout and low pay. I feel like there's a lot of people who can't even deal with one kid at a time sometimes, and we have to deal with like 20. And for parents, it can be a key issue in the juggle between having a family and working. Both Republicans and Democrats say it needs to be addressed.
Why is it so expensive? How do other parts of the world compare? And will families get financial relief from leaders in Washington? That's the cost of child care in America, all coming up on today's Business Daily.
It's dinner time at the Harrisons' house in Pennsylvania in the northeast region of the U.S. Allison and her husband have three baby high chairs lined up in a row. One-year-old triplets, Paige, Claire, and Leah, are trying broccoli and potato pierogies, a type of dumpling, for the first time. Now that they eat food, it's easier because we just put a little on this plate. But when they were on bottles, that was a whole other story.
Allison distributes food like an assembly line and wipes crumbs off their bibs and matching onesies.
You know, someone asked me yesterday if we eat dinner as a family. I'm like, no, because by the time one finishes the food, the next one needs food. You know, by the time I give one food, the next needs it. They now have their routine down pat. Allison is a primary school teacher at a government-funded school, but says she was initially intimidated by raising her own children. Even before they were born, it felt like a struggle physically and financially.
Well, unfortunately, in the state of Pennsylvania where I live, there is no leave or anything before. Like nearby states in New Jersey, you can get four weeks before off. I worked up until the Wednesday and I had the girls Friday. I was not able to take leave before I would have had to take my sick time.
So that was a lot. Unlike most countries, the U.S. does not offer national paid parental coverage. There's the Family and Medical Leave Act, which allows 12 weeks off unpaid after the birth of a child or an adoption. But some states like California and New York have gone further and put into effect mandatory paid parental leave programs. And some companies also offer their own programs for new parents. Paige has pierced ears. Paige is pierced. That's how we remember.
Grandma's had a hard time, so next makes it easier for them. Allison and her husband work full-time and rely on grandparents and a babysitter to get them through the week. With the school summer recess, Allison got a few extra months off before returning to work, but she wishes she had more time.
would have loved to have considered more staying home again. However, just with the cost of child care, it just wasn't in the cards. It just wasn't in the cards with the cost of the benefits because I carry the benefits for the family and
We had to pay that gap coverage insurance for the summer. Healthcare is one of the biggest financial pain points for many American families. Unlike the UK, Australia and several other European countries, the U.S. doesn't offer universal healthcare. According to the Peterson Foundation, spending on medical care in the U.S. is almost twice the average of other countries. Most Americans get private health insurance through work and share the cost with their employer.
Those without coverage purchase plans through a health insurance marketplace. Coverage for a family of five with three infants isn't cheap. Everyone has, you know, different employers and different health care. So my husband's job has health care, but the coverage and everything, it does not cover enough for a family of five with three little girls. So I have better benefits, so I need to go back to work in order to have that coverage for all of us because there's no universal health care here. Yeah, are you going to show them? Are you going to say that now?
A few towns away is Sydney Gleckler. She has a four-and-a-half-year-old daughter, eight-month-old twin girls, and a dog named Brooklyn. Her job in the pharmaceutical industry is hybrid. She and her husband work from home a few days a week. We knew we didn't really want to send them to daycare when they were really little. We're really lucky that we had the amount of leave that we do because I know, you know, I have a good friend who owns her own business, and she had to put her baby in daycare at eight weeks old. So that's really hard.
Both of their employers offer paternal leave, which helped when the babies were little. They have a lot of support from grandparents and a nanny. They considered putting them in full-day child care, but it would have cost roughly $4,000 per month, a large chunk of their income. It's so frustrating with the cost. We have decent, we have good jobs, and it's a lot of money.
The Bank of America has found that the average family's child care costs are more than a third greater than 2019. That's due to inflation, the expiration of pandemic-era funding, and staffing shortages. Given that the responsibilities traditionally fall disproportionately on mothers, many of them are torn between spending a large portion of their salary on care, cutting back their hours,
or leaving their careers altogether. People, when I found out I had twins, their first reaction was, oh, you're going to quit your job, right? I like to work, number one. I really like my job. But I also were in a household that I think relies on two incomes. As a woman in the workforce, what would have life looked like for you in your career if you had left, say, for five, seven years? Yeah, it's tough because I do work
around technology. That's my job. So I have to stay on top of what's new and what's being implemented for clinical trials globally. And because that's such a fast-paced environment, I would
I would be doing myself a disservice by taking myself out of the game for so long because I wouldn't, I'd have to be doing my own independent like research on the side just to know what's going on to then five years later, be able to dive back into it and be helpful. Yeah.
The COVID pandemic took a toll on the child care sector, especially for those who serve middle and lower income families. We opened a regional enrichment center during that time for all the health care workers, children and first responders, children. And it was for me, I was just like, if they can save lives.
The least I can do is let them know that they're in a safe space, their children are in a safe space and they're in a healthy space. Mary Cheng is the director for the Childhood Development Services for the Chinese American Planning Council, an organization that helps immigrant and low-income communities in New York City. We saw such fear of people coming back to work after that.
She says the biggest challenge to stay in business is retaining qualified workers. I lost two out of six directors all of a sudden. And, you know, and it was really because of burnout. During the pandemic, Congress offered more than $52 billion to help low-income families and child care providers.
But most of the funding expired in 2023. Today, low pay is driving early education teachers out of the field. Staff are like, I want to do this work in this setting because it's a community setting and it's
where we can really talk to the families and have that connection and support. But at the same time, I have to think about my living. Like, how is my future going to look? If I need to raise a family, is this going to be sustainable for me? And a lot of times it's not. Lucy Lee has been working with pre-kindergarten students for six years. When she started out, her salary was in the mid-$30,000 range, which is below the average single income in New York of $50,000.
Lucy's salary doubled when she received a graduate degree in certifications. And so after all that, I definitely got my pay bump. And it feels good, like, thinking about it. I started at 35, but it's like, even then, it was just like...
It's nothing. It's really nothing at the end of the day. Like, you're working so hard. Lucy says she loves the staffing community, but she's had thoughts about leaving the field for a career with less stress and less responsibility. It was really rough for me as, like, someone new in the field dealing with someone, like, certain children who are just really difficult. Like, they are children. Like, I can't blame them, but it just took a toll on me.
And I was like, maybe this is not what I want to do. Like, you know, you look at other people, they have a job, they clock out and they're like done. They don't have to think about it as much or like...
Gregory Brinder is the chief policy and innovation officer at the Day Care Council of New York.
In the U.S., local taxpayers and governments pay the costs of public education for children roughly 5 to 18 years of age, which includes the salaries of their teachers. Early childhood educators tend to make less than teachers in elementary and secondary education. So you may have similar qualifications, but if you're teaching two-year-olds in a community-based organization,
you're earning a lot less than someone teaching five-year-olds or ten-year-olds in a public school. And so a lot of people who are really good at providing early childhood education, who are excellent teachers, excellent directors, support staff providers...
They are, for understandable reasons, leaving the jobs they love because they can't support their own families on salaries that they're earning. Like any business, overhead costs like utilities and rent can be high. Guidelines from the Departments of Health and Education also limit some more affordable options. And making payroll can be a challenge. This is a really precarious moment for a lot of early childhood education providers.
We hear constantly from people who are having trouble making payroll, people who are having issues ensuring that their staff get paid. New York City offers free to low-cost subsidized care based on the family's income. Gregory says these businesses run on tight budgets that don't have a cushion to cover payroll.
There's also threats coming from the government budget cuts, including federal programs, which offer support for low-income families with young children. You know, we're hearing a lot about potential eliminations to Head Start.
will be beyond devastating for not just the sector, but the families that they're supporting. Both Republican and Democratic voters agree more needs to be done to support families to care for young children. How do other countries manage? And what do American lawmakers propose will help the problem? You're listening to Business Daily on the BBC World Service.
I'm Zing Singh. And I'm Simon Jack. And together we host Good Bad Billionaire. The podcast exploring the lives of some of the world's richest people. In the new season, we're setting our sights on some big names. Yep, LeBron James and Martha Stewart, to name just a few. And as always, Simon and I are trying to decide whether we think they're good, bad or just another billionaire. That's Good Bad Billionaire from the BBC World Service. Listen now wherever you get your BBC podcasts.
I'm Monica Miller, and today I'm looking at the cost of child care in the U.S. Raising a child is expensive. In America, the cost of outpaced inflation. Families can pay more than their rent for full-time care for a child under the age of five. To find out why, I turned to Elliot Haspel, a senior fellow at the Family Policy Lab of the think tank Capita.
He says there are two pieces to the equation. You need a lot of adult humans who are well-trained and well-compensated to care for smaller humans. And, you know, in a country where, you know, the labor is not cheap, that means that personnel costs take up a huge amount of child care program budgets. So it's expensive everywhere because of that hook.
However, what's different in the U.S. than most other countries is there's very little public subsidy, very little public funding that comes in to defray those costs. In the U.S., education is free for children in kindergarten through the 12th grade. That's about 5 to 18 years of age. But from the time they're born until they reach kindergarten, there is nothing in place for them.
The Organization for Economic Cooperation and Development is an international agency of 38 member countries. It found that the U.S. spends 0.3% of its GDP on child care and pre-kindergarten education. The average in this group is 0.7%. And Nordic countries like Iceland and Sweden spend as much as 1.8%. The answer to all of this is public money, by the way. There's no...
The special sauce is no secret innovation that some other country has figured out. It's truly all about public funding. But in the Nordic countries, you know, you have very, you know, years worth of or more of nearly fully paid parental leave. And then you have deeply subsidized child care where you're paying, you know, a couple hundred bucks a month at.
most, and that's for higher income families. In some places it's just free. But there have been reforms in countries similar to the U.S., like Germany. Coming out of reunification, Germany did not have a good child care system at all. But what they've done is they've poured a lot of public money into it, and actually in 2013 they passed a law
enshrining a legal right to a slot in child care between the end, basically, of paid leave, which is about a year, till the time the child enters school. And in places like Berlin, again, the fees are either zero for most families or very, very low.
So they've managed to make child care almost free in big cities like Berlin and across the country you have a legal right to a slot. The Canadian government is rolling out a universal $10 a day program. Last year, Northern Ireland implemented a child care subsidy scheme. Part of the package includes a 15% child care subsidy on top of the 20% granted by the UK government. In all these places it looks a little different, but the core story is
is they went from having very little public funding and treating child care as a market good that parents need to deal with themselves to a more public system where it's not government run, but it's government funded. And parents have the ability to choose the type of care that they prefer and that they want. Both Republican and Democratic voters in the 2024 election stressed the need for relief when it comes to early child care expenses.
But how likely is it that public funding will be passed on the issue? There's still great agreement across the political spectrum about why and why we need to do something about this and provide some relief to families.
And that's whether you live in a house that voted for President Trump or one that voted for President Biden. Sarah Rittling is the executive director of the First Five Years Fund, a Washington-based group that focuses on early child care funding. She says there are bipartisan bills in both chambers of Congress.
including the Child Care Availability and Affordability Act. It addresses tax credits to offset the increased cost of care for parents, employers, and child care providers. We're talking about the cost of care and how important the providers and the educators are in these centers or homes or wherever you're receiving your care. It really is trying to emphasize the need that exists to try to
It's part of a much bigger package that addresses tax cuts that are about to expire at the end of the year. There are also subsidies called the Child Care and Development Block Grant, offering a couple thousand dollars to families with children, depending on their income. In the prior Trump administration, we saw one of the biggest increases to that program to date.
Republican Senator Katie Britt and Democrat Senator Tim Kaine are co-sponsors of the legislation making its way through Congress. They say child care costs more than $122 billion in losses to the U.S. economy and is holding back families, child care workers and businesses. While both sides don't agree on much these days, both elected officials say it's a crisis America can't afford.
Thanks to Alison Harrison and Sydney Gleckler for letting the BBC into their homes. Mary Chang and Gregory Brender in New York and Elliot Haspel and Sarah Rittling for their insights. You have been listening to Business Daily, produced and presented by me, Monica Miller. You can hear more episodes by searching for Business Daily wherever you get your podcasts. And we would love to know what you think about the cost of childcare where you live.
To get in touch, you can email us at businessdaily at bbc.co.uk. ♪
I'm Zing Singh. And I'm Simon Jack. And together we host Good Bad Billionaire. The podcast exploring the lives of some of the world's richest people. In the new season, we're setting our sights on some big names. Yep, LeBron James and Martha Stewart, to name just a few. And as always, Simon and I are trying to decide whether we think they're good, bad or just another billionaire. That's Good Bad Billionaire from the BBC World Service. Listen now wherever you get your BBC podcasts.