As child care costs soar, more parents may have to exit the workforce
Families spend an average of more $700 a month on child care, with costs surging 32% since 2019, a new analysis finds.
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At the same time, many families laying out for child care are having to tap their savings while down on spending, potentially weighing on economic growth, BofA noted.
"While our data only captures payrolls deposited into Bank of America accounts and might not paint the full picture, we think the [spending] decline still points to the possibility of some working parents leaving the workforce as child care prices rise rapidly," the report states.
The U.S. economy loses an estimated $122 billion a year when parents leave work or reduce their hours in order to stay home with young children, a February study from ReadyNation found.
The 2021 American Rescue Plan Act (ARPA) directed nearly $40 billion to child care centers nationwide to help them stabilize their business during the pandemic while keeping prices lower for parents.
Democratic lawmakers in Washington are hoping to restore some of the lost ARPA funds under new legislation introduced last month called the Child Care Stabilization Act (CCSA).
Democrats behind the bill point to a June study from The Century Foundation, a progressive public policy group, that estimated households could lose $9 billion every year in earnings because they would have to leave work or reduce their hours in order to look after their children.
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