WASHINGTON — It’s not the cost of diapers or even future college tuition that’s rattling Amber Sparks.
“We basically had to remake our entire budget around day care,” said Sparks, 37, whose 3-month-old daughter began attending child care this month when Sparks returned to work for a labor union in Washington. “We’ll eat out a lot less and have a lot less discretionary spending. We live in an apartment building, and I don’t think there’s any way we’d be able to afford a home and pay for day care and pay for student loans.”
With the job market improving and the millennial generation born after 1980 reaching its prime child-bearing years, demand for day care probably will continue to outstrip supply, driving costs up faster than overall inflation.
That could have wide-ranging economic repercussions, including limiting consumers’ ability to spend on other goods and services and, in the extreme, preventing some parents from joining the workforce.
About 29 percent of births last year were to 25- to 29- year-old mothers, according to National Center for Health Statistics data released in June. The figures also showed the fertility rate, or the total number of births per 1,000 women ages 15 to 44 years, increased for the first time since 2007.
Child-care providers are finding it difficult to keep up as scant public funding and more expensive food and rent propel costs. That crimps their ability to hire staffers, with payrolls in the industry rising 3.7 percent since the start of the expansion in June 2009, compared with an 8.5 percent gain for all employers, according to the Bureau of Labor Statistics.
There’s been a growing push for child-care workers to be trained and educated better. The costs associated with those efforts make it tougher for managers to scrape up pay increases for existing workers, said Anna Carter, president of the Chapel Hill, N.C.-based Child Care Services Association.
The mismatch in supply and demand has made child care a “broken market,” said Marcy Whitebook, director and founder of the Center for the Study of Child Care Employment at the University of California.
“We now have sort of 21st-century expectations, and we still have, in some ways, a 20th-century system,” where “everybody’s doing everything on a shoestring,” Whitebook said. “It’s probably a safer bet to open up a restaurant than a child-care center.”
Sparks said she and her husband are paying about $2,100 a month for child care.
To keep costs down, more parents are turning to informal arrangements, including asking for help from the army of retiring baby-boomer grandparents — what Herbst calls “stiffing Grandma and Grandpa.” Child care by relatives climbed to about 27 percent of the total in 2011 from 21 percent in 1990. Weekly expenses for that type of care declined by 13 percent over the same period, according to Herbst’s analysis.
