Source: Morning Brew
The childcare costs in the States are not affordable for families anymore. Most US families, who make the median income, cannot send their infant or toddler to daycare. It’s not because they don’t want to. It’s because they’re helpless in the face of inflation.
Of parents surveyed in the 2022 Cost of Care Survey, 72% say center-based care for their infant costs 10% of their family’s income. 51% of respondents spend more than 20%. Ironically, the US Department of Health and Human Services (HHS) considers daycare affordable when it costs no more than 7% of their household income.
These competitive expenses allow new daycares and preschools to deliver quality care at reduced prices. Here’s a roundup of childcare costs by state for daycare owners to take as a benchmark for setting their pricing.
In most US states, childcare costs exceed the cost of university tuition. The 2022 survey by Care.com throws up some interesting insights from parents:
- 80% wish that childcare was cheaper
- 44% quit their job to look after their infant
- 65% say they would return back to their career if childcare becomes affordable
- 59% struggle to pay for childcare
- 35% said childcare costs prevent them from expanding their family
- 79% wish employers were more supportive of working parents
- 72% believe that daycare has become more expensive post-pandemic
The average cost of childcare in the USA is $14760 annually. But hardly any state meets this threshold. Unbelievable, isn’t it? Scroll down to see the average annual cost of daycare where you live.
|State||Annual Childcare Cost|
Source: World Population Review
In Alabama, childcare for an infant comes in at an average annual cost of $6001. For a preschooler, the average cost is a little less – $5001 annually.
Because of a poverty rate of 16.9%, families in Alabama struggled with using tech to set up virtual classes during COVID-19, resulting in learning losses for 11% of children.
The Alabama government supports families with child care subsidies to assist with tuition payments. The mission of the program is to provide Alabama’s low and moderate-income families with equal access to affordable and quality child care services as they participate in work, educational, or training activities. Check out their website for eligibility information and how to apply.
On average, a family spends $12120 on infant care and $10000 on toddler care, making its childcare services one of the costliest in America.
Although Alaska is the largest US state, it is the least populated state in the Union. The average population density in Alaska is 1.2 people per square mile. The median income in nuclear households is $51,651 annually, with families spending 20% on childcare. The Child Care Assistance Program provides assistance with child care expenses for eligible families who are working or participating in an education or training program. For more information check the government website
The residents of Arizona pay $10948 annually for infant care, while preschool for a 4 or 5-year child costs nearly $8900.
Although Arizona is the sixth largest US state by area, the average family earnings are low, with households making around $40,039 annually. However, parents expect childcare bills to lower as the fastest-growing state by population is attracting childcare service providers in hordes.
The Arizona Division of Child Support Services (DCSS) provides services to parents and caretakers who receive child support as well as parents who pay child support. Check their website for more information
Yearly, parents in Arkansas spend $6890 on infant care and $5000 on a preschooler. The numbers may seem lower than the rest of the US states, but Arkansas has the 7th highest poverty rate, making childcare unaffordable for nearly 80% of its residents.
Childcare spending accounts for 15-20% of their earnings, which isn’t surprising, seeing that a proportion of the population lives on the poverty threshold.
The Government Division of Child Care and Early Childhood Education ensures that Arkansas children and families have access to a safe, high-quality, developmentally appropriate early-learning environment.
The Golden State ranks number 4 for childcare costs in the US, according to a 2022 survey. Families in California typically spend a whopping amount of $16945 annually on infant care.
Half of Hollywood resides in California, which justifies the skyrocketing childcare prices. Families spend nearly 20-30% of their annual earnings on care for a single child. For details regarding childcare licensing and programs you can check the government website
Full-time infant care in Colorado costs $15325 annually on average. The residents spend about $15000 on care for 4 and 5 years olds/year.
A 2022 report by the US Congress Joint Economic Committee says that Colorado has the third highest average infant care costs. Since minimum wage workers earn nearly $25000 annually, they spend 50% of it on childcare, which burns a hole in their pocket.
Colardo Childcare Program
Colorado’s child care quality rating program, Colorado Shines, works to connect parents and caregivers with quality early learning programs — programs that can have a big impact on a child’s development and future success. You can read the details on this Government website
While infant care in Connecticut sets parents back by $15591 yearly, parents of 4 and 5-year-olds have a slightly more affordable option.
On average, nuclear family households make about $45359 annually, making childcare bills stressful for them.
Connecticut childcare program
Care 4 Kids helps pay for child care costs for low to moderate-income families in Connecticut. You can quickly check if your family may be eligible for care of 4 kids and submit an application online.
For a single infant, a family has to shell out $11021/year to place them in daycare. On the other hand, childcare for a preschooler sets them back by nearly $10000/year.
Delaware workers make around $28000 annually. The minimum wages in the US state have been stagnant even though inflation has been on the rise. Latest statistics conclude that the parents end up spending 55% of their annual earnings on daycare services.
Delarware childcare program
This service provides support for families with children to enable the caretaker to hold a job, obtain training or meet special needs of the parent or child. For eligibility, you can check here.
The average cost of center-based care for a toddler in Florida is pegged at $8000/year. The infant care costs have gone through the roof, with parents setting aside $9238 annually to pay for daycare.
The cost of raising a child has gone up exponentially in Florida. However, daycare providers argue that a sizable part of their budget has to be allocated to tech – live-streaming classes, bus tracking, and a parent-teacher communication app. More parents prefer tech-friendly childcares now, a trend that picked up in Florida and has spread throughout the US.
Florida childcare program
Florida’s School Readiness Program offers financial assistance to low-income families for early child education and care so families can become financially self-sufficient and their young children can be successful in school in the future.
Infant care in Georgia costs an average of $8520 annually, while placing a five-year old in a preschool is likely to cost a family roughly $7000/year.
Georgia’s median earnings are $40000 annually, due to which childcare becomes inaccessible to the minimum age worker who earns $20000/year.
Georgia childcare program
The state of beautiful beaches also has the highest cost of living in the US. Infant care in Hawai sets parents back by $13731 annually. Care for a preschooler, on the other hand, costs approximately $12000/year.
The average earnings of married families in Hawaii is $108893 yearly and of nuclear families comes in at $49031/annum. The latter group struggle with affording childcare, spending 15% of their income on childcare management services.
Hawai childcare program
The Child Care Connection Hawaii (CCCH) subsidy program helps low-income families to sustain their employment, educational efforts, and job training by paying a subsidy for their children who are in the care of DHS-approved childcare providers
The high infant care costs in Idaho – coming in at $7474/year – and challenges while hiring teachers are concerning because they affect the quality of care the majority of children in Idaho receive.
The current Idaho state minimum wage is $23000/annum an hour. Many families who make the median income in this US state can’t afford childcare costs as it takes up 18% of their earnings.
Idaho childcare program
The Idaho Child Care Program (ICCP) serves families with children under the age of 13 or over 13 if a child has a disability, providing child care assistance to working families by paying for a portion of child care. The parent’s share is based on the size of the family and the amount of their income.
The yearly cost of center-based care for an infant in Illinois is $13802. The daycare cost for a 3-5 year old child is nearly $12000/annum.
Childcare services take away an astounding 52% of the median yearly income of families based there.
Illinois childcare program
The Illinois Child Care Assistance Program (CCAP) makes it possible for families and guardians who qualify to receive financial help.
On an average, families pay $12612 for care for a single infant annually and the price of paying for a preschooler is nearly $10000/year.
Indiana has a diverse population. The most prominent races are Blacks and Hispanics, with 27% below the poverty level. In contrast, only 10% of Whites are below the poverty line. The median income of $30000-$50000 makes it difficult for parents to provide a developmentally appropriate education to their kids.
Indiana Childcare program
The Child Care and Development Fund is a federal program that helps low-income families obtain child care so that they may work, attend training or continue their education. The purpose of CCDF is to increase the availability, affordability and quality of child care. For eligibility click here.
A childcare facility in Iowa charges $10379 annually for caring for an infant and an average of $8000 per annum for care for a toddler.
Situated in the midwest, Iowa’s population comprises farmers who work the farmlands and tend to the livestock. With 11.11% of people in Iowa below the poverty line and earning a median income of $35000-$60000, childcare providers struggle to market their childcare to mothers, the majority of whom stay at home to look after the children.
Iowa Childcare program
Child Care Assistance (CCA) is available to the children of income-eligible parents who are absent for a portion of the day due to employment or participation in academic or vocational training or PROMISE JOBS activities. Assistance may also be available for a limited period of time to the children of a parent looking for employment. For eligibility click here.
On average, childcare centers in Kansas charge $11222/year for routine infant care. For toddlers, the cost comes around to $10000 annually.
The median household income in Kansas is $61091 in 2022, with parents spending nearly 15% of their earnings to cover childcare costs for a single child.
Parents in Kentucky expect to pay $6411 per year for center-based infant care and an average of $5000 per month for care for a preschooler. Kentucky has some of the lowest childcare costs by state for children aged 4-5 years old.
Kentucky’s low cost of living makes it a terrific location to start profitable childcare, which is inaccessible to most families because of its paucity. There’s not a lot of competition in the childcare industry, giving you an opportunity to free parents from joining work by leaving their kids behind with you.
Infant care costs $7724/year on average while care for a preschooler is likely to cost $6000 annually.
Louisiana’s childcare costs are low compared to other US states, yet at a median salary of $50,800 per household, childcare owners and directors observe centers running at low capacity because it’s not within an affordable range for families.
Childcare services in Maine are expensive to most families. While infant care costs $9449 per year, center-based care for preschoolers can cost $8000 yearly.
Maine is one of the least populated US states. The majority of the people live in and around Portland, making it an ideal location to start your preschool. The median salary of families is above industry standards in Maine, which will help you turn your preschool profitable.
Maryland families have to cough up $15335 annually for infant care while for the care of a 4-year-old, they end up paying nearly $14000.
The median wage of a household is $69110, which means families spend nearly 10% of their income on rearing children.
Infant care services in Massachusetts cost $20913 per year, which is an exorbitant sum. Center-based care, on the other hand, for a preschooler can cost nearly $18500.
The high female unemployment rate in Massachusetts i.e. 24.39% can be attributed to costly childcare services. With the median income of an average household being $84,385, families spend nearly 20% of their earnings on childcare for their infants.
Despite having a low cost of living, Michigan residents struggle to find high-quality, tech-friendly childcare options. Infant care for a single child in daycare costs $10861, while care for a preschooler is priced at $10000.
Contrary to regional patterns, Michigan’s population is dropping. Some economists are optimistic that Michigan can work to pass tax incentives to support childcare businesses. The state’s workforce continues to be primarily reliant on the declining US car sector.
Childcare in Minnesota is more expensive than university tuition and rent combined. Infant care costs $16087 annually in the state while care for preschoolers costs $15000 per year.
The Minnesota Department of Human Services helps connect parents with subsidy programs to cover the high charges of daycare reporting and other expenses as the family earnings are low in the state.
A facility in Mississippi charges $5436/annum for infant care and $5000 per year for toddler care, making childcare cheaper than the rest of the US states.
A minimum wage earner has to work for nearly 100 hours to cover the average cost of childcare in Mississippi.
Parents in Missouri pay $10041 yearly for infant care and an average of $9000 for care for a four-year-old.
Childcare centers in Montana charge $9518/year for infant care and $8000/year for toddler care, charging an average of $8350 across the state.
The average household income in Montana is $56539, meaning parents have to spend 15-30% of their earnings on their children’s care.
Parents are expected to pay $12571/annum for infant care in Nebraska and $10000 for toddler care, making it one of the most expensive US states for childcare.
On average, Nebraskans make $60000 yearly, spending 20% of their earnings on childcare for a single child in the household.
Infant care services cost $11408 yearly in Nevada, and toddler care is priced at $10000 annually.
The Silver State’s residents earn nearly $84000 annually, shelling out 7-15% of their income on childcare.
A year of infant care in New Hampshire costs $12791. Toddler care comes in close at $10000 annually.
The median household income in New Hampshire is $77923. 17-20% of their annual income goes towards childcare.
A year of infant care in New Jersey costs $12988. Toddler care, on the other hand, costs $11000.
New Jersey is an expensive state, with the mean household income coming to $85245. Families in New Jersey pay some of the lowest portions of their salary, 10%.
The cost of infant care yearly in New Mexico is $8617 and toddler care is priced at $7000/annum.
The lack of reliable childcare in New Mexico results in existing childcare facilities making $570 million/per annum. Opening a licensed childcare center in the state is profitable due to many unregulated services having cropped up.
The cost of infant care in New York is $15394/year and toddlers are cared for in facilities at the price of $14000 yearly.
Minimum wage workers earning under $50000 struggle to keep up with the rising infant care costs in New York, which takes away about 35% of their income.
The infant care costs in North Carolina are $9480/annum and for toddler care, it is set at approximately $8500/year.
Because of low earning potential and high living costs, families spend 20-30% of their incomes on childcare.
There are currently 4,000 childcare providers in North Dakota, including group homes and centers, charging $9091 for infant care.
An average household comprises 2-4 family members, with the median income being $49,475 annually. Families spend a staggering 35% on childcare.
At an average of $9697/year, childcare in Ohio costs more than the yearly college tuition.
Ohio is one of the most densely populated and expensive US states, with families spending 32% of their annual income on covering childcare costs.
Infant care in Oklahoma will cost families an average of $8576 per year for tuition at a daycare, while for four year olds, the centers charge an average of $7000 annually.
Since centers in Oklahoma have more amenities for working parents, such as bus tracking, it also causes the costs to go significantly higher.
Childcare for parents costs nearly $13616 annually if they opt for a group home or a center-based service as opposed to a private center in Oregon, which costs more.
1 out of every 33 adults in Oregon has a child dependent on them to meet their basic needs. It costs nearly 21% of their total cash flow to take care of their infant/toddler.
The financial impact childcare has on families in Pennsylvania is so severe that it keeps mothers out of work. They pay $11842 per annum for infant care and $10500 yearly for toddler care.
According to recent statistics, the parents end up spending 20% of their annual earnings on daycare services.
Infant care services charge $13696 and toddler care services charge $12000 yearly in Rhode Island.
The people of Rhode Island will enjoy improved communication with their children’s teachers if they weren’t struggling to pay the daycare fee, with 21% of their yearly cash flow allocated towards childcare services.
The average childcare charges $7007 for infant care and $6500 for toddler care yearly in South Carolina.
Although the US Human and Health Services advise that you shouldn’t pay more than 10% of a household’s budget, parents in South Carolina pay 20% of their annual cash flow to childcare services.
The financial burden on parents varies in South Dakota because the US state has different childcare models, with parents paying $6511 yearly for infant care and $5500 for toddler care.
The average earnings of a family in South Dakota are $37,574 annually. Women are paid much lesser, with their annual package being a paltry $30,772. They have to shell out 10-15% of their annual income for childcare services.
Tennessee families pay $8732 annually for infant care. The costs for caring for preschool students is $6500/annum. Although it is slightly cheaper, it still makes a dent.
The Tennessee Department for Children and Families helps connect parents with subsidy programs and daycare owners with assistance programs to streamline childcare budgets. Families typically pay through the nose, with childcare costing them 30% of their annual income.
Childcare services in Texas are expensive compared to other states in the US. Parents shell out $9324 yearly for infant care and $8000/annum for toddler care.
Texas is the second most populous state. With 20% of the population below the poverty line and households earning a median income of $63826 yearly, over 10% of earnings are directed towards childcare.
Childcare centers in Utah vary in cost depending on their staff experience and location, but on average, they charge $9945 yearly for infant care and $8200 annually for toddler care.
Center-based childcare in Utah increased their pricing by 27% during COVID-19, making them inaccessible for nearly 20% of their population.
Infant care services are priced at $12813 yearly and toddler care services cost $10400/year.
The average annual wages of a Vermont resident are $54,084, with childcare taking away 23.7% of their earnings.
The average yearly cost of childcare for infants is $14063 a year. On the other hand, the yearly cost of toddler care is $12780 a year.
According to the Economic Policy Institute, infant care takes up 18.2% of a median family’s earnings in Virginia.
The state average costs for childcare have risen from $14554 to $18237 annually after COVID-19.
Washington families spend 20% of their average mean income annually on childcare. Parents face fewer childcare choices as the costs continue to rise.
The average annual cost of childcare for infants in West Virginia is $8736. For toddlers, it is $7600.
The average annual rate for infant childcare is 4% above the average in West Virginia, with families making $48037 yearly.
Infant care in Wisconsin costs an average of $12567 yearly. Annual childcare for a four-year-old comes in at $10870.
Because of far few regulated childcare facilities in Wisconsin, people below the poverty line are left out. Residents spend 20% of their annual earnings on covering childcare costs.
Annual childcare for an infant comes with an annual price tag of $10647. For toddlers, it is $8756.
Households in Wyoming earn approximately $40000 annually and spend nearly 22% of their total income to place a child in a center.
Depending on the place where you live in the US, you may qualify for a variety of tax benefits and subsidies. To set up a profitable business and maximize the value provided to parents, sign up on Illumine.
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As a result, more parents will enroll their children with you because you offer them ease, convenience, and efficiency – all in one powerful platform.
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