14% of families spend more on day care than housing. What’s the fix?

Brittany Dunbar and her husband pay about $3,100 a month for child care in suburban Baltimore — roughly $300 more than the mortgage on their $550,000 home. 

Before having a child, Dunbar expected to pay around $2,000 per month for child care. But when it came time to enroll her daughter, most centers in that range either had long waitlists or environments she wasn’t comfortable with, such as dirty, disorganized spaces or staff distracted on their phones.

Today, Dunbar describes the national branded day care her daughter attends as “pretty standard.”

Dunbar and her husband are relatively high earners, yet the mortgage and child care together consume about half of their monthly income.

“We’re not really going on vacation, except to visit family for the holidays,” she told Straight Arrow News. “And I’m not paying on my federal student loans.” And those loans are in deferment and accruing interest, she said.

Dunbar’s situation is far from unique. Across the United States, millions of families are navigating child care costs that are financially and logistically unsustainable.

A survey of more than 2,000 moms by BabyCenter found that 14% of families spend more on child care than housing. Similarly, a survey of 3,000 parents from Care.com estimates that, on average, families spend 27% of their household income on child care, with half saying it’s around $18,000 a year. 

A 2026 LendingTree study found that a two-child household would need to earn over $400,000 annually to meet the federal guideline that child care should not exceed 7% of household income.  

As child care costs climb, economists and other experts say the financial pressure will continue to reshape family formation, workforce participation, and economic growth nationwide. 

Like nearly half of the moms surveyed by BabyCenter, Dunbar said rising costs have made her reconsider having more children.

Dunbar, who is 36, is already considered to be in “advanced maternal age.” So, she said, I don’t have that luxury of time to wait. I feel like we are forced into choosing between growing our family and our careers…it’s definitely impacted every aspect of our life or budget.”

Child care costs are reshaping our economy  

Over the past few years, the United States labor force has seen a sharp decline in employment among women ages 25 to 44 whose youngest child is under 5 years old.

Matthew Nestler, a senior economist at KPMG, told SAN these women are leaving the workforce to care for their children. 

Reshma Saujani, founder of Moms First and a 2026 TIME Woman of the Year, told SAN these moms “didn’t leave because they stopped wanting careers. They left because child care costs outpaced their salaries. When you push that many women out of the workforce, it stops being a family budgeting problem and becomes a national economic crisis.” 

And that “crisis” has implications for the entire U.S. economy. In 2024, Nestler said industries lost 509. million work hours, with an estimated $8.9-$17.8 billion in lost wages.

Losing labor hours creates staff shortages, missed output and coworker burnout. “Over time, these dynamics erode productivity and margins and depress consumption and tax revenues,” he said, “acting as a drag on growth.”Declining birth rates also shrink a country’s future tax base, increasing reliance on informal labor markets, said Stephanie Fornaro, the founder and CEO of the concierge-nanny agency Hello Nanny.

As of 2024, the U.S. fertility rate was a historic low at 1.6 children per woman.

Why is child care so expensive?

Over half of American families live in areas with limited or no access to licensed caregivers, and about 40% are subject to waitlists of six months or more, according to the Center for American Progress.  

Some of this shortage can be attributed to low pay — early childhood educators earn less than 98% of the U.S. workforce. Some is due to other economic factors. It’s expensive to run a center, said Evelyn Knight, a multi-site child care operator with over two decades of experience. State rules regulating strict teacher-to-child ratios require providers to maintain a large staff even when enrollment fluctuates. 

“Quality requires staffing ratios, trained educators, compliance and physical infrastructure,” she said. “There are limited efficiency gains available.”

Providers must also cover benefits, facility costs and licensing fees, often on narrow margins. 

But experts note that the child care crisis is not wholly unsolvable. In Poughkeepsie, New York, for instance, the local nonprofit DAY ONE Learning Community launched a program that provides would-be educators with an 11-week hands-on apprenticeship, followed by direct entry into jobs. Since the program began in 2021, more than 100 educators have completed the apprenticeship, expanding the region’s child care capacity. 

Private companies have also taken up the mantle. Child care platforms like Upwards, which works with employers including Choban and the Baltimore Police Department, help businesses offer benefits such as backup child care and child care stipends. Upwards also provides weekend child care options for Army Reserve and National Guard families during drill training. 

“Employer-sponsored child care benefits can reach families right now, before broader policy solutions are passed, funded, and implemented,” said Upwards CEO Jessica Chang.

According to Upwards’ data, 34% of parents report they would have to cut their working hours without access to care; 90% of parents said they were able to retain or regain employment because of it. 

Providing child care benefits has proven to be a company benefit, too. Moms First and the Boston Consulting Group released a 2024 report showing that child care benefits can yield returns on investment of 90-425% for companies.   

“Employers have both an economic incentive and a real opportunity to act now, and the infrastructure being built through employer benefits actually strengthens the case for public investment,” Chang told SAN. 

Countries that offer generous child care benefits have seen results 

Jessica Cuevas and her husband struggled to make ends meet in Chicago, Illinois. After having her second child, Cuevas resigned from her full-time job as a college counselor to work a remote, part-time job for a nonprofit due to child care costs. When her second child turned 2, she started hunting for full-time work again. 

As the primary breadwinner, she said, “I was aiming at $80,000.” After a luckless eight-month search, Cuevas and her husband decided to initiate their “Plan D” — moving to Mexico, where they are dual citizens and mandatory, free public preschool is available for 3- to 5-year-olds. 

Cuevas didn’t want to take spots from families in need, so she opted for a private school instead. Now, her children attend a Montessori school in their new hometown of León, Guanajuato, for $185 per child per month. 

“Now that we’re here we’re able to kind of be creative and think big and I think it’s allowing us to not have that scarcity mindset,” Cuevas told SAN.

She is now starting her own business and said it feels good to be able to afford a gym membership. 

A move to Mexico can’t solve every family’s financial problems. But other nations have also built frameworks to ease the load. 

In France, the local government sends a letter to all new parents detailing their full range of benefits: comprehensive child care, full health coverage and paid leave for both parents. 

Although France’s birth rate is also declining, employment among people ages 15 to 64 reached a recorded high of 69% in December 2024, following the expansion of family benefits.

A 2021 UNICEF report ranked wealthier nations based on their child care offerings: The United States ranked 40th of 41 nations, barely above Slovakia. 

Some cities and states are trying to do more

Some American cities and states are experimenting with solutions. In San Francisco, Mayor Daniel Lurie recently launched the Family Opportunity Agenda, a plan to reduce child care costs by expanding access to free and subsidized care. 

Under the program, a family of four earning less than $230,000 per year will qualify for free child care for children under 5 years old at more than 500 licensed providers citywide. Families of four earning up to $310,000 annually can receive subsidies covering half the cost of care. 

New Mexico became the first state to offer all residents no-cost universal child care last November, and Maine passed legislation this month to allocate $15 million to help working families pay a portion of child care costs if they earn less than 125% of the state’s median income.

Other states, including California, Vermont, and Minnesota, are working toward solutions that reflect a growing awareness among policymakers of what’s at stake. 

What would it cost for the United States to offer universal child care?

When a federal child care program was introduced as part of the Build Back Better plan in 2021, it was projected to cost about $273 billion over 10 years. But some independent economists estimate that number even higher, around $400 billion, said Carol Joyner, executive director at Family Values @ Work.

“We fund roads because businesses depend on them. We fund schools because our future depends on them,” Saujani said. “Child care is no different, except we’ve never treated it that way.”

But child care operators like Knight caution that expanding public funding alone will not solve the crisis. 

Policymakers must consider the operational realities of running child care centers on thin margins. If the government becomes the primary payer, Knight said, providers could face additional regulatory requirements, administrative costs and potential payment delays — risks that small and mid-sized centers struggle to absorb. 

“If reform proceeds without fiscal discipline and operational realism, we risk building a system providers cannot survive inside,” said Knight. 

Whether the answer comes from Washington, state governments, employers or nonprofits, one thing’s clear: Families like Dunbar are fighting to make ends meet.

“I feel like we’re kind of stuck,” Dunbar said. “No economic growth [is] coming out of our household.”

Ella Rae Greene, Editor In Chief