Paying to work - When childcare costs exceeds the paycheck

[Liberal_in_LA]

:wow:

With rising child-care cost, many parents are paying to work

By Petula Dvorak
Tuesday, January 26, 2010


Because right now, most weeks, I actually pay to work.

And I'm not the only one.

This is embarrassing and stupid and I didn't want to talk about it for a while. Only recently did I begin quietly commiserating with others on the playground and learn that this is a common rite of passage for many parents of young children, when child-care costs are at their highest.

"Glad to know I'm not the only one out there. I was starting to think I'm crazy for still working," one D.C. mom who works at a university told me.

It's a situation among middle-class and professional women that is becoming increasingly commonplace, according to a report released Tuesday by the Center for American Progress and the Center for WorkLife Law at the UC Hastings College of the Law in San Francisco.

-----------------

When you step off a work path, you lose seniority, experience, benefits -- workforce capital that is difficult to regain once the kids are in school (assuming they go to a free public school, of course).

Boushey calls taking time off to care for kids a "lifetime pay penalty" for some parents.

That's what Julia Christian, executive director of the Capitol Hill Chamber of Commerce, wants to avoid. She, too, doesn't make enough to cover the cost of day care for her daughter.

"I think there are more people in this boat than people are aware of," Christian said. "It's really sad.


http://www.washingtonpost.com/wp-dyn/content/article/2010/01/25/AR2010012503553.html

[Fumesucker]

1. And yet day care workers are seldom well compensated..

It kind of makes you wonder where the money goes.

[exboyfil]

4. Every salary economic transaction has a big

tax drag. For examples S.S./Medicare is taxing at approximately 30% (15% for the parent which is either a direct payment or reflected in reduced compensation for the parent and 15% for the day care worker which gets paid by the parent). Throw on top of it state and federal income taxes (even with some child care credits).

Add to this meeting state standards for child care (in an institutional setting) and liability insurance (we checked on this when my wife was thinking on doing daycare in the home and it was high).

Consider aspects which depress wages (availability of undocumented workers willing to work for less because it is better than the alternative), and the fact that this is income which can be gained in a somewhat more flexible manner (you can watch your kids the same time you watch others for dollars).

A ratio greater than 3 to 1 for infants is not recommended making them especially expensive. In many settings you have to pay for two more hours than you work (transport time from the sitter to your employer and back). Add in additional cost for transportation (taking the kid to the sitter as well as your own commute). Needing a more reliable car when you are employed. Add also the additional clothes and food expense related to working outside the home.

I would guess that, unless you need the health care from an employer, anything less than $15/hr. would be a losing proposition under these conditions. We did the math when my wife had our first child and came to this conclusion. I am still trying to convince my wife to go back to work now that our youngest is in 6th grade.

Your pay $15/hr ($120/day) Taxes - $5/hr ($40/day) Childcare ($4/hr for 10 hrs) ($40/day)
Transportation (40 miles at $.40/mi) ($16/day) Clothes and Food ($5/day)

Net income $19/day

Sitter of an infant $4/hr*3 infants=$12/hr of that 15% will have to come out for S.S. and TBD for State/Federal taxes

From the parents perspective $200/wk seems like a lot for childcare, but the childcare provider really is not making very much either. The numbers get better when the kids get older, but still we are talking about pretty thin margins.

[hfojvt]

22. those darn taxes and regulations

if only we had more Reaganomics.

Also, if a childcare worker is making $18 (in wages, benefits and overhead) an hour for taking care of six kids, then each parent is only paying $3 an hour, taxes included. The 15% of FICA taxes on that $2.70 per hour is not equal to 15% of the parent's wage.

[exboyfil]

29. I was not making a judgment about the taxes

only showing how thin the margins become because of their presence. Infants are 3 per worker (per my post). I only considered a one kid family. How about two kids - now you are up to $6/hr under your scenario, and you have more hours of child care than you have work hours because of the transit times. From that you got to pay your own FICA and taxes.
You
$18*8=$144/day

Expenses
Childcare (1 older child) = $30/day ($3/hr * 10 hrs)
Your FICA = $16/day (both halves per your assumption about the child care worker)
Transportation = $5/day
Extra Food = $5/day - perhaps Brown bag but what about food for the kid
Clothes = $1/day (Washing your work clothes, needing to spend more for clothes)
TOTAL TAKE HOME = $87/day

Throw in a second kid and you are down to $57/day. Three kids you are down to $27/day. I have not included Federal or State taxes which, depending on income, would be mitigated by the Child Care tax credits (I am not too familiar with that). If you have a earner spouse, then most of these tax benefits would not be available and you would see another $30-$40/day come out of your check (20% state/federal marginal rate). In my state you don't have to make very much money to be at a 20% marginal rate.

[raccoon]

19. Day care workers are elder care workers, both poorly paid, and yet

everyone wants the BEST of care for their older relatives and their kids. :shrug:

[Atman]

2. This is so sad...and it can get more sad...

One of my co-workers was thrilled to announce, over a year ago, that he and his spouse were expecting their first child.

Whoops...turned out to be TWINS.

Whoops...she was "downsized" about two weeks after announcing her pregnancy.

Whoops...twins were preemies. Serious stress on the finances. Her unemployment has run out. They're selling off possessions, including a car.

This is America? This is what people voted Republican for? These are good people, they did NOTHING WRONG. But they're fucked. We're both fortunate to work for a Democratic employer, who kept the guy on for no other reason than that they couldn't let him go with preemie twins at home with an unemployed wife.

Republicans are fucking hateful, selfish assholes if this is what they think their constituents want or deserve. My co-worker and his wife are hard-working, honest, tax-paying Americans. But they've essentially been told to fuck off. I just can't fathom why anyone would think this is the proper way to treat people. I just don't get it.

.

[Pithlet]

3. But yet I hear all the time about how child centric society is

and how good we parents have it. Total bullshit, of course.

[Name removed]

5. Deleted message

Sub-thread removed by moderator. Click here to review the message board rules.

[MicaelS]

21. Contraception and abortion are legal,

So unless someone put a gun to your heard to force you to get and stay pregnant, your getting pregnant and having a child or children, falls under the category of "choice". Don't whine when the choice YOU made negatively impacts your life. As much as you might think otherwise, your little urchin(s) are only the center of your universe, not the rest of society.

[SoCalDem]

6. It's been that way for a while now.. When my three were small

and we had recently moved, I looked for work, and when all the figures were tallied, I would have cleared about $85 a month.....and had to schlepp 3 little boys under 5, out of bed at 6 AM, bundle them up in winter gear, and do that every stinking day...all winter long..

It was well-worth $85 to NOT work:) Once they were all in school, I did go back to work (a union job), but until they were in school all day, it made NO sense to our family to have me gone all day at work, just to pay daycare..

and no matter how well it all "works" on paper, it always ends up costing more and gaining less that the "plan".

[EFerrari]

14. Ditto only it was two and $60.

[vadawg]

7. one of the reasons why we decided my wife could step of the mill and become a stay at home mom

i dont think she will go back to work even after the kids are older, i think the phrase is she will find hobbies...

[seabeyond]

8. had a sit down with niece. daycare, clothes, gas, car maintenince, take out food

lunches, often higher tax out of paycheck ....

when both are working expense increase in a lot fo areas not even thought of. since pay is so low as it is, do some thinking with two parent working family if it really benefits the family.

this is right on

[Mass]

9. What about the poor mother who has to leave her kid with a neighbour not qualified for this because

she cant afford to stop working in order to feed her kid.

I am tired about sob stories like the one in the OP. There are two salaries in this home. She has a choice between working and not working. I support her choice to work, but dont tell me that she is the person we need to be sorry about.

[Liberal_in_LA]

18. I don't consider it a sob story. Just because the women in the article are better off

than a poorer mom doesn't mean they aren't experiencing hardship

[Berry Cool]

10. It's always the women who suffer in this system.

We still treat mothers in our society as if anatomy is destiny. We expect them to either stay home when they have children while their husbands work, or if they have to keep working or choose to keep working, to pay for child care--and then we compare the cost of child care to THEIR salary (not the father's) and say it's not worth it for them to work (forgetting about all the things they lose by quitting work to care for their children in terms of workforce capital).

We don't really expect the men to change this by doing their fair share. Nor do we really support working parents by giving them free or affordable child care. OMG, we can't even pass a HEALTH CARE plan. I can only imagine the nightmare we'd have trying to pass government subsidized child care. We had a tiny window of opportunity during the Nixon administration, but it closed then and that slammed the door forever.

[RadiationTherapy]

12. I am a man and my life has been affected by this.

FYI.

[Gormy Cuss]

24. How long did you step out of the workforce to take care of your children?

That is the point of the link in the OP, that women are choosing to work for little more than the cost of daycare in order to hold onto their jobs/careers. Women, not men. It's still pretty rare for men to step out of the workforce to care for their children. In fact, it's still pretty rare for couples to even discuss that option.

[Robb]

25. Well, I did.

No plans to return to the workforce until the child rearing is "finished." Whatever that means.

I think "rare" is an overstatement. There are fewer men doing it, for certain. But I'm not exactly a spotted owl out there.

[Gormy Cuss]

28. There are more now than ever but it's still rare -- maybe even rarer than a spotted owl.

I could probably find more recent data on this, but a Census report on children from 2002 estimated that there were about 42 million children under age 15 living in two parent households. Of them, about 28% were living with mothers whose stated reason for being out of the workforce was to care for children and the house. Only 0.8% of children (n=around 336,000) were in households with fathers who stated same. Even if all men who were out of the workforce in the past year were counted, only 3.6% of children lived in those households.*

I know there's the whole other level of parents who work from home in order to be able to be primary caregivers, but there's an awful lot of ground to make up before fathers as primary caregivers would be lifted out of the rare category compared to women in that role.

I'm glad that more couples are making this choice, but we've got a long way to go.

*link, Table 5
http://www.census.gov/prod/2003pubs/p20-547.pdf

And just cuz you or someone else reading this thread may be interested, here's a link to an earlier Census study on the characteristics of fathers who were primary care givers for their kids:
http://www.census.gov/prod/3/97pubs/p70-59.pdf

[exboyfil]

30. I would love to stay at home like my wife does

I love being with my kids.

[CBR]

15. When and if my husband and I have children and if we are unable

to afford child care, my husband will be staying home with the kiddies.

[NashVegas]

26. Only the Martyrs

Who somehow think that once that kid drops out, all the hard work is finished and are shocked to find out that's not so.

[izzybeans]

11. Nearly all day cares we found for our newborn son were $400 a week or more.

$400 fing dollars. A friend of mine had the good fortune to be transferred to Montreal by his work. He now pays $5 a week (or was it a day?) for infant care. And that's because he is a non-citizen.

[Lance_Boyle]

13. More people need to be more aware of the costs of raising children

before having them.

[Robb]

27. It's only expensive in time or money

...if you want to do it right.

[Number23]

16. Kicked and rec'd. This is a serious issue. Kudos to the President for trying to provide

some relief as this has been a terrible problem for a long time. And as has been noted in this thread, too often it's women who bear the brunt of this.

Child care should not be causing people to go bankrupt or put their careers on hold for x number of years because it's so expensive.

[Lydia Leftcoast]

17. I volunteer in a meal program for low-income youth

One of the young women, a single mother, has completed LPN training and has a job, but she still comes to our meal program with her son, because she is spending so much on daycare while working that she can't always make it to the end of the month.

[KittyWampus]

20. You lose seniority, but you gain a child who thrives with parental contact.

[alcibiades_mystery]

23. We pay $2000 a month for childcare

We're still well in the positive for both paychecks, though.

But, damn if I wouldn't like that $2000 in disposable income/tax deferred retirement.