The Rising Cost of Child Care in Michigan

Michigan ranks as one of the least affordable states for child care in the country, and Washtenaw County has the highest average cost of child care in the state.

This is probably not news to many local parents, who struggle to find adequate care that will fit within the family budget.

A recent report was issued by that analyzed data from the U.S. Census and Child Care Aware data center. They found that nationally, families can expect to see 13 percent of their income going to child care centers. In the state of Michigan, families will spend 15.7 percent of their income annually.

Impact on the local economy

Single parent households in the area often find it difficult to cover the average cost of full-time child care, which can exceed $900 per month. If that single parent is earning a minimum wage, that would require 53 percent of their income.

Dual income families also struggle to cover the costs. Oftentimes, one parent will choose to put their career on hold and stay home with young children as a cost-saving measure.

“We live in one of the highest cost of living areas in the state, so high child care costs make it even harder for families to make ends meet,” said Phil Santer, senior vice president and chief of staff at Ann Arbor SPARK, a regional organization focused on economic development. “With the high cost of child care in the area, many families are faced with the challenge of having to pick between their career, or leaving the workforce to care for their children.”

Limited child care is not just a parental problem, but an economic problem as well. It impacts the workforce, which in turn impacts businesses and services within the community.

“With many individuals choosing to leave the workforce to provide care, that impacts the number of workers in the area,” Santer said. “A study that came out last year suggested that lack of childcare cost Michigan’s economy nearly $3 billion. A recent survey showed that 59 percent of area employers surveyed said that challenges due to child care was having a negative impact on their business, as it limits their ability to recruit and retain talent.”

Helping those who help our children

Desperate parents often turn to social media, seeking information on daycare centers with openings and shorter waiting lists. 

“Washtenaw County has more children than licensed child care slots. For every eight children under the age of five, there is only one licensed slot available to them in the county,” Santer said.

Santer noted that child care providers, both center-based and home-based, are not to blame for the lack of availability and rising costs.

“There are a complex mix of factors for this, but historically there has been an underinvestment in the child care sector,” he said. “Also, Michigan has a challenging business and regulatory environment that can make it hard for child care providers to thrive as businesses and open up additional slots. Providers struggle with paying competitive wages for their staff while also keeping costs reasonable for families to pay, which is a difficult line to walk.”

“It’s important to recognize that while families are having to pay a lot, providers are struggling to stay afloat, and child care workers make well below what is considered a living wage,” Santer said. “So it’s not a case of ‘How can we get child care providers to charge less?’ The question is ‘How can we support the child care field as a whole to allow providers to thrive and workers to be able to make this a career, all while making sure care is affordable and accessible?’”

Solutions for the future

Santer is currently working with the Regional Child Care Coalition to come up with an action plan to address these issues. They hope to work with child care providers and parents to develop solutions.

“In the coming weeks, our Regional Child Care Coalition will be releasing an action plan that identifies actions that can happen on the state and local level to improve the situation for child care providers and the families they serve.”

Parents looking for help are encouraged to connect with Child Care Network, an area organization that offers assistance to families with placement and tuition costs.