Moneybox

Who Elizabeth Warren’s Child Care Plan Really Helps

A mother picks up her child from a Head Start program in Massachusetts.
A mother picks up her child from a Head Start program in Massachusetts.
Brian Snyder/Reuters

This week, Elizabeth Warren formally introduced her bill to create a universal child care program, one of the centerpieces of her policy-focused presidential campaign. Conveniently, the Center for American Progress has produced a short analysis showing that the people who stand to benefit most from such a program tend to be poor and lower-middle-class parents who don’t necessarily have much choice about whether to work or stay home.

When think tanks track the cost of child care, they often do it based on the cost of full-time day care centers, which are the most expensive option for families. This produces some eye-popping numbers—$22,631 to care for an infant in D.C., for instance—that tell us that high-quality, professionalized day care is totally out of reach for a lot of families, and a serious financial strain for others. But they don’t really show us much about what families who need child care actually spend. After all, you can save money by sending your toddler to a Happy Faces Learning Center a few days a week, and relying on family on others.

The CAP brief is useful because it gives us an updated glance at what Americans actually spend. It looks specifically at families with working mothers and children age 5 or younger, since they’re the ones most likely to need paid care (so, a wealthy stay-at-home mom who also pays for a part-time nanny isn’t reflected in these results; nor is a poor, unmarried mom who lives with relatives and stays at home with her kids). It then grabs data from the Census Bureau’s Survey of Income and Program Participation, or SIPP, to calculate how many of them actually paid for child care as of mid-2016, and how much they spent. The basic pattern CAP finds is that married and higher-income parents are more likely to spend on child care, but for lower-income and single parents, it’s a much more debilitating cost.

Here’s one way to break down the results. Among families that earn more than 600 percent of the poverty line—$150,000 for a family of four—76 percent pay for some kind of child care. On average, they spend $362 a week, or $18,824 annually, which makes day care (or a nanny, or babysitting) a college tuition–like expense for these dual earner households. But because they earn a lot, the cost only comes out to about 7 percent of their income. (The government considers child care affordable if it eats up 7 percent or less of a family’s income.)

Child care costs in the U.S.
Jordan Weissmann/Slate

And lower-income families? Among those earning less than 200 percent of the poverty line—or $50,000 for a family of four—just 40 percent pay for child care. Those that do, though, devote 35 percent of their income to it, on average. Federal programs like Head Start and the Child Care and Development Fund may help many poor families find care. But they aren’t nearly big or broad enough to meet the needs of America’s cash-strapped working class.

Single parents are stuck in a similar problem. About 41 percent of never-married mothers with kids go to work. (Some of them may be truly single, while others might be living with an unwed partner.) Those who do spend nearly a quarter of their income on child care. There are simply a large number of solo moms out there who need to work in order to support themselves and don’t have a good, affordable option to care for their kids.1

These CAP numbers show that Warren’s bill is pretty well targeted. The legislation would create a network of child care centers that would be available free of charge to households earning below 200 percent of the poverty line, where there is very obviously a great deal of need. Families that earn more would pay on a sliding scale but would owe no more than 7 percent of their income, which is just about what higher-earners are already paying. Upper-middle-class families would probably be able to use more child care under Warren’s bill; they could send their child to the nursery five days a week instead of three, for instance. But while the plan is technically universal, it really does seem geared toward alleviating the current burdens of the poor and lower-middle class.

1One caveat here is that families that participate in SIPP have a habit of understating their incomes, which could make the burden of child care look more severe. But this is the survey the census has traditionally used to track the cost of child care, and the poor also tend to underreport their incomes on other government surveys that you might use as an alternative. So we can work with what we’ve got.