Childcare costs grew by 60% in Minnesota during the pandemic
Already facing some of the highest childcare costs before the pandemic, Minnesota's center-based care cost per child grew about 60% amid COVID-19. This is the 13th highest rate of growth…
Only a few things are as expensive for Minnesota parents as child care. According to data from Child Care Aware, the average family in Minnesota spent over $16,000 to send their infant to daycare for the whole year in 2019. Families with two kids — one infant and one 4-year-old — paid over $28,000 for both kids.
Compared to other states, only parents in Washington, D.C., Massachusetts, California, New Jersey, and Connecticut paid more to send their infant to a daycare center, making Minnesota the sixth-most expensive state for infant daycare in 2019. And after controlling for income levels, Minnesota was the fourth-most-expensive state for infant daycare in the country in 2019.
It is easy to see why a lot of effort has been focused on making child care more affordable. Minnesota parents have their budgets squeezed every year trying to afford child care — that is, if they do not end up out of the workforce altogether. And businesses all over Minnesota cannot find workers due to issues with child care.
Clearly, something should be done about these high prices. But to enact the right remedies, lawmakers need to first understand the root cause of the problem.
Sure, providing child care is naturally expensive because it is labor intensive, and there is little to no avenue for increasing productivity. But this does not explain why Minnesota households earning a median income pay over 20% of their income for infant daycare while households with a median income in Utah only pay 12% of their income. The nature of the child care industry is the same in Minnesota as it is in less-expensive states like Utah.
Moreover, compared to the rest of the country, Minnesota is not a highly expensive state. According to the Bureau of Economic Analysis, as of 2019, the cost of living in Minnesota was below the national average. So, cost of living — another common scapegoat — also fails to explain why child care is more expensive here compared to most states.
The fact of the matter is that, like most of our woes, the child care crisis is government-made. When compared to other states, Minnesota has more stringent requirements that raise child care costs.
Our state, for example, requires teachers at daycare centers to look after a smaller number of children compared to other states. Our state also requires daycare-center teachers to have more education and longer training experience compared to other states. All these rules do not come at zero cost. When teachers must look at a smaller number of children, the cost of providing care per number of kids goes up. Similarly, when centers must hire highly educated teachers, they have to offer them higher wages. All these additional costs are passed on to parents.
Currently, Minnesota rules require that for every four infants present at a daycare center facility, there must be one caregiver. In a newly published report, American Experiment estimates that if this rule was changed to allow centers to place five infants per one worker instead of four, parents would pay $2,800 less for infant daycare. Likewise, infant daycare centers would be $3,800 less expensive if the state did not require teachers to have a high school diploma and college credits.
The child care crisis is government-made. And no amount of money will fix it if nothing is done about Minnesota’s burdensome rules.
This op-ed piece appeared in the Duluth News Tribune on July 28, 2022.