Skyrocketing U.S. childcare payments are already weighing on spending and the labor market, according to Bank of America Institute, and that’s even before the expiry of a national program that could make things worse.
The average household spends more than $700 a month on childcare across the country, 32% higher than 2019, and the largest increase was for those making $100,000 to $250,000 a year, the data show. That’s already hit spending: Families with childcare payments have been spending at a slower pace than the rest of households since May and are dipping into savings at a faster rate.
There are also fewer dual-income households this year, with an average 1.34 payrolls a month versus 1.39 in 2019, indicating that some workers likely dropped out of the labor market to care for their kids, according to the institute’s report published Friday. Women are more likely to leave their jobs to take on that role, and experts warn it could increasingly happen as about 70,000 child-care programs are at risk of closing.
The report is based on analysis of anonymized Bank of America customer accounts, and was gathered even before the expiry of the Child Care Stabilization program. The end to that $24 billion program, which subsidized a portion of care and made it accessible for many “could have a meaningful impact on consumers,” economist Anna Zhou wrote in the report.
©2023 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.