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My husband and I never really go out to eat, we don’t spend money on stuff we don’t really need, and next spring break will be the first time in years that we will have an out of state vacation. I still can’t afford to work anything less than full-time, when factoring in our mortgage, rising property taxes and grocery bills, and putting aside money for savings/retirement. My husband makes more than what my dad made years ago and my parents were better off then than we are, not once has my mom ever worked anything other than part-time.
As for wanting all sorts of luxuries being more of a younger generation thing, I know of multiple older people taking out second mortgages, or pulling from their retirement savings to pay for their daughter's weddings. I remember one paralegal describing how every year at their office they have at least one couple near or at retirement age filing for bankruptcy because they overspent for a daughter’s wedding. Financial irresponsibility is definitely not limited to just the younger generation.
That is not hardly the same thing. Bad financial choices later in life vs being over your head from the starting line.
Obviously, it's not all younger people and I also understand the decrease in purchasing power. Just an observation I have made over the years.
The biggest expense by far for day care centers is insurance, especially in blue states. More recently, centers have had to invest in security, cameras, locks, intercoms. With the increase in security, comes the expense of training for providers-hours of it, per year. Costs are going up and there's not much parents can do about it. As a parent, safety should be your biggest priority.
The biggest expense by far for day care centers is insurance, especially in blue states. More recently, centers have had to invest in security, cameras, locks, intercoms. With the increase in security, comes the expense of training for providers-hours of it, per year. Costs are going up and there's not much parents can do about it. As a parent, safety should be your biggest priority.
That's going to be a problem everywhere because crime is everywhere. There is probably more overhead in some states than others, but some of that is probably beneficial. You don't want every Tom, Dick, and Harry opening up a childcare center for a quick buck with lax regulations and no oversight. The flip side of that is you don't want to make opening or operating a center so onerous with regulations or so expensive that it's not the worth time or it becomes a money-loser.
That's going to be a problem everywhere because crime is everywhere. There is probably more overhead in some states than others, but some of that is probably beneficial. You don't want every Tom, Dick, and Harry opening up a childcare center for a quick buck with lax regulations and no oversight. The flip side of that is you don't want to make opening or operating a center so onerous with regulations or so expensive that it's not the worth time or it becomes a money-loser
Even with regulations, stuff happens as you can see in the cited articles below. Incidents like this are just going to make insurance costs for daycare centers even higher. Potential lawsuits against failed playground equipment, decals on windows (NYS law), and other safety requirements all contribute to the high cost of daycare. Mats for older children, first aide equipment, furniture and their replacements have to meet state regulations. The "teachers" or caregivers who are not the owner of the center are usually paid minimum wage even in high COL areas and few receive any vacation, health insurance, 401K unless they are employed by a large chain. They are usually hourly employees and if you don't work that day, you don't get paid. Turnover is extremely high even in centers that are part of chains. These costs are all getting passed down to the parents. Independent childcare centers rarely are profitable for their owners. Even centers that are part of large chains come and go.
What sort of subsidies do you get for childcare? Are they paid by states, federal or what?
Ours are means tested and paid by the federal government , but they have recently lifted the cut-off point to a family income of around $US350,000. Which means most families get some subsidy.
But there are still a lot of issues, especially a shortage of degree qualified teachers.
What sort of subsidies do you get for childcare? Are they paid by states, federal or what?
Ours are means tested and paid by the federal government , but they have recently lifted the cut-off point to a family income of around $US350,000. Which means most families get some subsidy.
But there are still a lot of issues, especially a shortage of degree qualified teachers.
Depends on the state. If I recall correctly there are programs that will pay the cost of daycare for households below the poverty line. These are typically households headed by single mothers, whom wouldn't be able to work otherwise.
There are also daycare tax credits and deductions. These are also income dependent capping off at a certain threshold. They give a little back but stop far short of covering the cost.
The daycare issue is going to need to be addressed if they want people to start having or having more kids. The cost of daycare for two kids in my area exceeds a mortgage + property tax + insurance.
Countries like Japan and South Korea are actually losing population because their younger people don't want (or can't afford) children. Wonder if the US will trend in that direction?
Countries like Japan and South Korea are actually losing population because their younger people don't want (or can't afford) children. Wonder if the US will trend in that direction?
The birth rate in the USA has been below replacement level for sometime. Our population is only increasing due to immigration. You might enjoy our thread on global population decline.
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That's going to be a problem everywhere because crime is everywhere. There is probably more overhead in some states than others, but some of that is probably beneficial. You don't want every Tom, Dick, and Harry opening up a childcare center for a quick buck with lax regulations and no oversight. The flip side of that is you don't want to make opening or operating a center so onerous with regulations or so expensive that it's not the worth time or it becomes a money-loser
Even with regulations, stuff happens as you can see in the cited articles below. Incidents like this are just going to make insurance costs for daycare centers even higher. Potential lawsuits against failed playground equipment, decals on windows (NYS law), and other safety requirements all contribute to the high cost of daycare. Mats for older children, first aide equipment, furniture and their replacements have to meet state regulations. The "teachers" or caregivers who are not the owner of the center are usually paid minimum wage even in high COL areas and few receive any vacation, health insurance, 401K unless they are employed by a large chain. They are usually hourly employees and if you don't work that day, you don't get paid. Turnover is extremely high even in centers that are part of chains. These costs are all getting passed down to the parents. Independent childcare centers rarely are profitable for their owners. Even centers that are part of large chains come and go.
Too low of a barrier to entry + too many independent operators who underprice = lots of unprofitable and/or failed small business and small margins for the larger operators too.
The unfortunate reality is low ratio childcare paid for out of post-tax dollars is not affordable without huge differences between the pay of the workers and the customers and most people will simply be priced out, so there is a huge demand that can't be economically met and people keep trying to meet that demand and it just doesn't work. You are using your post tax wages to hire another person to work on a pretax basis, + rent, insurance, and all the other overhead to run the daycare. Need to make daycare costs tax deductible and let the ratios go up so the numbers can pencil and wages that retain non bottom of the barrel workers can be viable -- avoiding these incidents needs higher quality workers which due to the heavy cash constraints also means less, and not having the tax wedge gobble up a huge amount of the wages enabled by and paying for the daycare would help a lot too.
In addition to the problems stated in post #1, a new danger has arisen: Private Equity. These Wall Street vultures aim to suck child care dry. Story in the Atlantic (paywall site).
Four of the top five for-profit child-care chains—KinderCare, Learning Care Group, the Goddard School, and Primrose Schools—are controlled by private-equity funds, and private-equity-backed centers represent 10 to 12 percent of the market.
Private investors are intrigued by child care for the same reasons they became interested in nursing homes and other health-care services: intense demand, government money, and relatively low start-up costs. “Their goal is not long-term sustainability; their goal is to try to turn a profit,” Haspel said.
When private equity bought up nursing home chains one of the first things they did was cut the nursing staff in half. In half. And nursing homes were never known for being all that well-staffed to start with. Read about it in a book called The Big Fail which has a whole chapter on the private equity debacle that is long term nursing home care. Some states are now adopting new laws to require at least a minimum ratio of patients to nurse staffing. Now that the horse has run off, some states are closing the barn door; always in reactionary mode, never proactive.
The Atlantic articles talks about how the legal structures of ownership shield the firms from liability; if anything bad happens to your child you will have little or no legal recourse available to you. Swell. The deck is stacked in the house's favor.
As various states and the federal government invest more funds into child care, there seems little or no thought on how the money is spent, performance metrics, value, and accountability. I expect the usual greed-fest followed by the usual "how could we know THAT would happen" deflection from legislatures. The beat goes on.
What will private equity due to child care?
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