Child Care Becoming More Affordable in Some Major U.S. Cities – BNN Bloomberg

(Bloomberg) — Major U.S. cities like Boston, Atlanta and Chicago have seen child care costs fall; It’s a sign that state-level policies are helping lower the rising price tag for a necessary service for parents.

As of September, average child care payments in those places fell the most year over year, according to a recent report from the Bank of America Institute that looked at two dozen major cities. Researchers analyzed the costs for U.S. parents who were customers of the bank.

Price declines in these cities may have multiple causes, according to interviews with experts from three think tanks and research organizations. But states that have invested money or redirected federal dollars to child care have seen price reductions and fewer staffing shortages, said Julie Kashen, director of women’s economic justice at the Century Foundation, a progressive think tank.

“It feels like we’re seeing evidence of what a difference it really makes when there’s money in the system,” he said.

Child care prices across the country continue to rise: The average weekly cost of a caregiver for an infant in 2023 was $766, up 4% from the previous year. The average weekly spend on daycare was $321, up 13% from 2022 levels, according to online care platform Care.com. As these costs outpace inflation, there is increasing pressure on the finances of working women and their families, according to a Bank of America report.

In September 2023, $24 billion in federal Covid-era funding that kept child care providers afloat ran out, but some states stepped in to keep those programs in place.

Take Massachusetts, whose capital, Boston, saw a 13.5% drop in average child care prices, according to Bank of America Institute data. The state has allocated $475 million in new government funding for Commonwealth Cares for Children grants in 2023; these grants helped child care providers cover operating costs and increase employee wages. In January, Massachusetts also announced it would invest $65 million to increase payments to providers who accept reimbursements to low-income families who use their services.

In a 2023 survey of Massachusetts providers, 21% said they were able to reduce parents’ fees due to stabilization grants. The state has since made the grants permanent.

Chicago, Illinois’ largest city, also saw a decline in parental spending. In May, the state allocated $250 million in new funding to expand existing child care, preschool and other early childhood services.

In some cases, parents may decide to reduce the hours they seek care or switch to lower-quality, cheaper providers because of rising costs, experts say.

“In places across the country where families continue to struggle with these barriers and tuition costs are so high, surcharges are rising to untenable levels,” said Hailey Gibbs, deputy director of early childhood policy at the Center for American Progress. A liberal research and advocacy group.

“They’re making incredibly difficult decisions to provide for their family, but they may not want to make those decisions in the best way for their children or their professional lives,” he said.

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