Childcare costs are ‘untenable’ in Philadelphia, according to U.S. Department of Labor

Philadelphia families are forced to spend a larger chunk of their pay on childcare than in any other Pennsylvania county, new federal data show, and it’s likely affecting the number of women in the workforce.

A new database from the U.S. Department of Labor shows the cost of childcare as a proportion of median income in every Pennsylvania county, as well as all counties in most U.S. states.

In Philadelphia, infant care costs about 22.5% of the median household income, and that’s for just one child.

That’s higher than the suburbs by a wide margin, largely due to Philadelphia’s low median income compared with the surrounding counties in Pennsylvania and New Jersey. In those suburban counties, the ratio of childcare to median income hovers between 10% and 15.5%.

Another stat that shows a wide gap between Philadelphia and its suburbs is the labor participation rate for women. In Philadelphia, it’s just above 70%, while in the surrounding counties, between 76% and 80% of women are either employed or looking for work.

Data collected in 2018 showed an average of $11,960 spent per year on infant care in Philadelphia. Adjusted for 2022 dollars, that comes out to about $13,320 annually, the Department of Labor estimates.

“What all this information and these maps show us is that childcare prices vary throughout the country, and the prices are untenable for families,” said Nicole Neri, Mid-Atlantic regional director for the Labor Department.

Three other lessons from the study:

The data show that generally, care is less expensive at a home-based business — operated out of the care provider’s home — than at a center. Also, cost of care decreases as children get older.

However, Neri added, the cost adds up quickly for families with more than one child. She noted that 29% of families with a child under age 6 have more than one child under age 6. Childcare costs for multiple children can easily surpass the women’s median earnings. In Philadelphia, that’s about $30,000.

The solution is not for childcare providers to lower their prices, the department noted. The vast majority of childcare costs go toward paying staff, who often do not make a living wage — their median wage is $13.22 per hour.

Neri suggested two ways to address the problem: government action to assist with childcare costs and getting more women into higher-paying jobs.

“It’s important for employers to take a look at this information and understand what some of these burdens are,” Neri added. Providing paid family leave and allowing flexibility for family-friendly hours and remote work when that’s possible would help keep more women in the labor force, she said.

In addition to cost, availability is a challenge as well. The number of childcare providers in the country decreased sharply with the onset of the COVID-19 pandemic and has not fully recovered, according to a recent report from the U.S. Department of Health and Human Services.

In Pennsylvania, the number of childcare employees decreased by 52% from February 2020 to April 2020. Many of those employees are back in the industry, but the total number of childcare employees was still down 7% from pre-pandemic levels, as of June.

The Philadelphia Inquirer is one of more than 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push toward economic justice. See all of our reporting at brokeinphilly.org.