Child care costs have been steadily rising, and families today are spending 30% more on their average child care payments than they did in 2019, according to new data from Bank of America. Costs reaching new heights also coincides with a pandemic-era program subsidizing child care ending last month. 

Child care prices will likely increase, as providers adjust to cuts to federal funding that covered staffing and other expenses, according to University of South Carolina economist Jessica Brown.

“They’re going to have to make some adjustments, likely charging parents more or perhaps decreasing wages,” she said.

Child care facilities are already having a hard time staffing up, said Chris Herbst with Arizona State University. “There’s pretty fierce competition for these low-wage, low-skilled workers.” 

If child care prices do go up, low-wage working parents would feel the hit more than others.

“Low income families allocate about 22% of their annual income to their child care expenses,” Herbst said. “They are now spending substantially more now than than they were spending about 15 years ago.” 

Normally, increased child care costs would result in more women leaving the workforce to take care of kids. But Jessica Brown said that the rise in work-from-home opportunities has changed the equation. 

“Previous estimates would say, ‘a 10% increase in child care costs — that’s going to reduce female employment by 0.5% to 2.5% for mothers.’ But I don’t think that’s what we’re gonna see necessarily due to the change in the way people work,” she said.

But parents who can’t work from home — like lower-wage workers — still may have to leave the workforce as child care costs go up.