New Jersey is one of 38 states where the annual cost of childcare is more expensive than in-state tuition at a public college, according to recently released data from the Economic Policy Institute that compared childcare costs in all 50 states.
According to EPI, a nonprofit think tank in Washington, D.C., the cost of infant childcare ranks 13th in the nation at $18,155 – or $1,315 per month. The cost of childcare for a 4-year-old costs $17,534, or $1,461 each month in New Jersey. Both are more expensive than annual in-state tuition at a public college or university, which averages $15,528.
“Our rankings highlight the true challenge before the state to meaningfully investigate and implement reforms to tackle affordability issues,” Althea D. Ford, NJBIA Vice President of Government Affairs, said Tuesday.
Early childcare and education for infants, toddlers and preschoolers is crucial not only for the benefits is brings to children in terms of socialization, cognitive development and school readiness, but also because it allows their parents to participate in the workforce, the EPI said. However, the data shows that childcare costs are one of the biggest expenses in a New Jersey family’s budget, making it unaffordable for too many families.
Infant care for one child ($18,155) takes up 13% of a median family’s income ($139,703) in New Jersey. For a family with two children – an infant and a 4-year-old – the cost of childcare ($35,689) eats up 25.5% of their annual income. That’s more than the median cost of housing ($20,702) in New Jersey.
For a minimum wage worker, the cost of infant care for 1 child ($18,155) devours 56% of their annual earnings of $32,219.
Despite the Murphy administration’s investment of more than $1 billion over the last eight years in expanding access to access to more affordable childcare, the childcare economy remains an unsustainable model, Ford said.
“New Jersey has affordability issues, and childcare costs are one that hurts not only working families, but also the state’s economy because it keeps some parents from being able to go back to work,” Ford said. “A workforce needs consistent, reliable, accessible and affordable childcare options.”
In testimony last fall before the Assembly Children, Families and Food Security Committee, Ford said the business community has a “vested interest in ensuring a robust and diverse childcare system,” because childcare is vital service to working parents and because childcare providers are also businesses.
Ford recommended strategic investments in a childcare ecosystem that utilizes the existing infrastructure of licensed and community-based childcare providers and the rejection of costly and unnecessary regulatory requirements.
For example, NJBIA also supports providing tax credits for certain employer-provided childcare expenses and for certain childcare staff and registered family daycare providers, she said. Read Ford’s complete testimony here.
