Why Is There A Shortage Of Daycare And Why Is It So Expensive?
The answer, not surprisingly, is government -- government regulation. Jeffrey A. Tucker writes at the Foundation for Economic Education:
Child care is one of the most regulated industries in the country. The regulatory structures began in 1962 with legislation that required child care facilities to be state-licensed in order to get federal funding grants. As one might expect, 40 percent of the money allocated toward this purpose was spent on establishing licensing procedures rather than funding the actual care, with the result that child care services actually declined after the legislation.This was an early but obvious case study in how regulation actually reduces access. But the lesson wasn't learned and regulation intensified as the welfare state grew. Today it is difficult to get over the regulatory barriers to become a provider in the first place. You can't do it from your home unless you are willing to enter into the gray/black market and accept only cash for your business. Zoning laws prevent residential areas from serving as business locations. Babysitting one or two kids, sure, you can do that and not get caught. But expanding into a public business puts your own life and liberty in danger.
Too many regulations
Beyond that, the piles of regulations extend from the central government to state governments to local governments, coast to coast. It's a wonder any day cares stay in business at all. As a matter of fact, these regulations have cartelized the industry in ways that would be otherwise unattainable through purely market means. In effect, the child care industry is not competitive; it increasingly tends toward monopoly due to the low numbers of entrants who can scale the regulatory barriers.
There is a book-length set of regulations at the federal level. All workers are required to receive health and safety training in specific areas. The feds mandate adherence to all building, fire, and health codes. All workers have to get comprehensive background checks, including fingerprinting. There are strict and complex rules about the ratio of workers per child, in effect preventing economies of scale from driving down the price. Child labor laws limit the labor pool. And everyone has to agree to constant and random monitoring by bureaucrats from many agencies. Finally, there are all the rules concerning immigration, tax withholding, minimum wages, maximum working hours, health benefits, and vacation times.
All of these regulations have become far worse under the Obama administration -- all in the name of helping children. The newest proposal would require college degrees from every day care provider.
Here's an example from Pennsylvania of the hoops providers have to jump through:
A couple of years ago, I saw some workers digging around a playground at a local day care and I made an inquiry. It turned out that the day care, just to stay in business, was forced by state regulations to completely reformat its drains, dig new ones, reshape the yard, change the kind of mulch it used, spread out the climbing toys, and add some more foam here and there. I can't even imagine how much the contractors were paid to do all this, and how much the changes cost overall.And this was for a well-established, large day care in a commercial district that was already in compliance. Imagine how daunting it would be for anyone who had a perfectly reasonable idea of providing a quality day care service from home or renting out some space to make a happy place to care for kids during the day. It's nearly unattainable. You set out to serve kids and families but you quickly find that you are serving bureaucrats and law-enforcement agencies.
Mothers have taken care of other mothers' children throughout human history, usually without death or horrible things happening. There should be no reason why a mother cannot be the judge of whether the person she wishes to leave her child with is a safe bet, rather than having the state intervene.
This regulation also keeps poor women who are mothers from having an income by taking in children and caring for them. Again, women have done this throughout human history. Yes, there's always a chance a child will be injured -- maybe in the parent's own home. But a child can still be injured in that *perfectly regulated* hothouse of government regulation. Regulation is mostly keeping the childcare "industry" safe from those who'd like to enter without going to college and jumping through 26 hoops.
"The newest proposal would require college degrees from every day care provider."
Have to make those degrees in gender studies and basket weaving useful somewhere, especially when pushing everyone to get a degree.
Joe J at February 15, 2015 5:46 AM
You set out to serve (any customer base) but you quickly find that you are serving bureaucrats and law-enforcement agencies.
Canvasback at February 15, 2015 8:01 AM
Oh well, the world could use fewer people.
Pirate Jo at February 15, 2015 11:37 AM
Amy, you're right. This is the government stepping in where it not needed. I spent a good part of my childhood with a black market child care provider. She was a wonderful woman who loved the kids she took care of. No, her place probably didn't meet all the regs but she was a wonderful person who filled my life with memories of joy. I miss her. She was like family to my siblings and me. She has been gone for 35 years but she lives to this day in my dreams.
causticf at February 15, 2015 12:37 PM
I was an illegal daycare provider for several years before and during nursing school. It wasn't so much that I couldn't get liscensed-in Texas it isn't THAT onerous to do-but that it was simply non of the government's damn business. Therefor, I did not tell them. One way to stop this idiocy is for people to simply stop Doing all this nonsense the government requires. Probably not possible for large daycare centers, but for home care it is.
Plus, for typical daycare centers who are open 6:30 to 7 pm, staffing is hard. No one wants to work 12 hour days (and they sure don't want to pay workers what that would cost), and no worker wants to work 4 hours,bake midday off, then come work 4 more hours. And if they split the day between 2 main teachers, then they all become part time jobs. They realky need to staff it like hospital nursing shifts: you work 3 12's a week, but there again in a 5 day a week center, someone's only getting part time hours. I don't know the solution, which is why I planned and still plan our lives around needing no daycare. Plus, I'd just rather raise my kids myself, thanks. Hubby works second shift, I work first shift. Kids covered.
momof4 at February 15, 2015 2:37 PM
It's not government. There are more laws for restaurants than there are for day cares, but restaurants somehow thrive. If there's a shortage of day cares, it's because people don't want to open them, because day care is drudgery. Otherwise the market would correct itself -- entrepreneurs would be opening day cars right and left.
And the article never defines what "expensive" might be. In my experience, when faced with paying $10 per hour to safeguard The Most Important Thing in the World, most parents say "He's just a baby! He's going to sleep for most of it!"
Kevin at February 15, 2015 7:02 PM
I found your comment very informative Kevin. The US median household income is $52k, i.e. $26/hr. So you think 40% of your pretax income per child is affordable? What if you have two or three kids? Talk about an argument for dropping out of the work force and going on welfare!
Ben at February 15, 2015 8:21 PM
Just to tag on, that is why I never went to daycare and my kids don't go to day care. It is cheaper for my wife to stay at home than for her to work and pay for daycare. My sister's kids go to day care because she is a feminist and women have to work because patriarchy or naked kitchens or some such. I generally tune her out after she gets on her soap box.
Ben at February 15, 2015 8:25 PM
I found your comment very informative Kevin. The US median household income is $52k, i.e. $26/hr. So you think 40% of your pretax income per child is affordable?
Probably not. I never said it was; I just said parents seem to resent paying anything over minimum wage (and often resent even that) when it comes to paying someone to mind a child.
Kevin at February 15, 2015 8:46 PM
Kevin is not wrong: there are crazy regulations for restaurants, but remember that these also apply to every child care center as well, because they also serve food. Anyway, the fact that the government has overregulated one branch of the economy is no excuse for overregulating another.
To go a step further: there is by now ample evidence that "dangerous" playgrounds are better for kids. Letting children collect minor injuries teaches them valuable lessons that prevent major injuries. Yet we continue to pave playgrounds with rubber instead of gravel, while ripping out swings, monkey bars, and anything else that might actually be fun to play on.
a_random_guy at February 15, 2015 11:38 PM
"In my experience, when faced with paying $10 per hour to safeguard The Most Important Thing in the World..."
You've got to be kidding. Where do you find day care for $10 per hour? Around here it's $25-30 per hour. A lot of middle-class married women have quit working because, after they pay for day care, their net income is close to zero.
Cousin Dave at February 16, 2015 7:34 AM
This way, the government can get women to work at day care centers, after dropping off their own kids at day care centers, and everyone will be happy because the State will have more workers, and those workers will rejoice in their jobs for life with the State. All kids will grow up, knowing that the State will take care of all their needs, and can look forward to their State jobs. Whee.No stress, no self employment, no risk, no competition, no worries.
KateC at February 16, 2015 9:08 AM
You've got to be kidding. Where do you find day care for $10 per hour? Around here it's $25-30 per hour.
"Like Uber, but for day care."
Kevin at February 16, 2015 9:24 AM
"because patriarchy or naked kitchens or some such"
I'll take Naked Kitchens for ... well, for whatever they want to charge, Alex.
Gog_Magog_Carpet_Reclaimers at February 17, 2015 2:40 PM
Gog,
She fears something like being chained naked to a stove all day. Which really makes no sense. After all, her husband doesn't like her being unsupervised in his kitchen. She screws up his knives and pans and leaves a mess. But the public schools really pounded this idea into her head.
Back on topic, it is often better to look at per classroom costs rather than per person. A quick googling came up with 6 kids max per licensed adult. A parent works 8 hrs plus 1 hr commute and 1 hr lunch. Total of 10 hrs per day. So at $10/hr/child you get 10*10*6 = $600/day or $156k/year revenue.
Ben at February 18, 2015 8:57 PM
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