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Michigan ranks among highest for cost of childcare due to pandemic

Posted at 6:34 AM, Feb 04, 2021
and last updated 2021-02-04 06:56:57-05

GRAND RAPIDS, Mich. — The pandemic has of course impacted a number of different things and that includes the cost of childcare.

If you're a working parent, you know how hard it can be to find good childcare in a price range you can afford, and a new study shows that you are not alone.

"The last thing that people need right now, with all the economic uncertainty, is for something as basic and fundamental as childcare costs to skyrocket," said Matt Schulz, chief credit analyst with LendingTree.

The company analyzed data from the Center for American Progress and Child Care Aware of America and found child care costs have increased by 61% in Michigan during the pandemic.

"There could be a few different reasons," Schulz said. "One of them is simply that it's costing a lot more for these facilities to get up to standards that people now want out of these facilities, whether it's just cleanliness, or whether it's keeping up with government regulations, or just the demands of parents who are scared and want their kids to be as safe as they possibly can."

Schulz says it costs more money for childcare facilities to make sure they meet state standards.

"A lot of times these facilities have had to reduce their capacity, and sometimes when you reduce capacity, in order to make up for some of that lost revenue you end up making the folks who are still there, pay a little bit more," he said. "So, between the cost of keeping up with regulations and keeping cleanliness as high as you possibly can, and reduced capacity, it's kind of this perfect storm for a lot of these childcare facilities."

In Michigan, households allocate about 16% of their income towards childcare.

Schulz says that the 60% increase in childcare costs in Michigan is one of the largest increases in the nation. "It's bad everywhere, but in Michigan it's particularly acute, and that's difficult, because Michigan, as you know, has seen high unemployment and is a fairly low-income state compared to some of the rest of the country. So when you add all of that up, it's a really, really hard time to have these costs appear on your on your budget."

So let's break down the cost of childcare according to care.com:

  • For a family with two children in the Grand Rapids zip code of 49504 at 40 hours a week, the average cost for a nanny is about $15 an hour, or $600 a week, which means it would cost you nearly $30,000 a year.
  • A daycare center is about $370 a week, and rates can change depending on what city you live in and of course changes due to the pandemic.

It's a tough reality a lot of families are facing, making these times even more challenging for parents to navigate.

"It's incredibly important for childcare to be accessible to everyone who needs it," Schulz said. "Anybody who is a parent can tell you that the safety of their child, the well being of their child is the most important thing."

If a parent can't afford good childcare, they can't get a better career or make more money.

"It's led to a bunch of difficult decisions that parents have had to make."