In a recent study by the Economic Policy Institute, researchers found that child care costs are so high that most moderate-and-low income working families cannot afford quality child care. We wanted to see how Montana stacks up and found that a significant amount of Montana families’ earnings go toward child care. As you can imagine, it is particularly difficult for low-income working parents to balance work and quality child care. We highlight a few comparisons to show just how unaffordable child care is for families in our state.
At the very least, child-care costs account for a quarter of total family earnings in middle income households. Among low-income families though, child care costs can comprise half of total earnings. See the table below.
As you can see, two working middle-income parents with two children spent an average of $15,792 a year on child care. That is almost one-fourth of the family’s total earnings! For that amount of money, this family would be able to send one of their kids to Montana State University-Billings for almost three years.
If this family lived in Great Falls, they likely spent twice as much on child care than they did on their total housing costs for the year.
While child care is an exorbitant expenditure for middle-class families, it has a greater impact on low-income families, making it nearly impossible for them to earn enough to cover basic family needs. Regardless of whether a household has two parents earning minimum wage or a single-worker earning minimum wage, child care costs comprise almost half of low-income families’ total annual earnings.
To put this into perspective, a single-working mother working full-time at minimum wage would have to dedicate nearly all of her salary for 6 months to pay child care costs for her 4-year old. This amount of money would cover tuition at Missoula College and enable her to complete her Associate Degree. Further, in 2014, this same individual could use the money she put toward child care to pay for 91% of her total housing expenses for the year.
In most circumstances, it is an economic necessity that both parents work in order to make ends meet for their families. However, with child care costs rising and consuming a larger proportion of families’ income, it is becoming harder and harder for families to cover basic household necessities. We need to keep working on policies that improve the quality of child care and make it affordable for all working parents, regardless of income.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.