Around the world, rising inflation is pushing up childcare costs to unprecedented levels. Average day care fees went up 6 percent last year from a year earlier, according to mobility company ECA International, while in the US, costs jumped by 9 percent. Reversing this trend is key to pulling economies out of recession, promoting growth and creating more equitable societies, but so far, many governments have done little to relieve the financial burdens facing parents of young children.
The stress falls disproportionately on women, who are usually the ones to take on the bulk of childcare responsibilities. Given the choice of working just to afford daycare, women are opting to reduce their hours, forgo promotions or drop out entirely. Others are deciding to have fewer children, or none at all. Pressure to return to office has not helped, as many mothers are only able to join or stay in the workforce under flexible arrangements.
“The economy as a whole pays a high price for leaving women out of the workforce,” said Adriana Dupita, an analyst at Bloomberg Economics. “Global GDP could be some 10 percent higher if female labor participation matched that of men.”
Illustration: Mountain People
In the US, an estimated US$237 billion a year vanishes due to women paring back their workloads to care for kids. In the EU, that number is around 242 billion euros (US$262 billion). Study after study has shown that increasing female workforce participation, by contrast, increases output and reduces levels of inequality and extreme poverty.
Given the benefits, governments and companies are experimenting with ways to accommodate working parents. In Japan, some businesses provide subsidized childcare and family-friendly housing as part of employee benefit packages. In the UK, where many employers offer “enhanced maternity pay” to retain new mothers, the government is planning to expand subsidized rates for childcare.
Yet so long as costs stay high, everyone loses out. When it comes to how women choose to live, work and form their families, “childcare cost is the key driver,” said Joeli Brearley, founder of UK charity Pregnant Then Screwed.
Bloomberg looked at five countries to examine the effects of higher childcare costs, and the ways in which mothers are being forced to make tradeoffs between their families and jobs.
UNITED STATES
Four and a half years ago, Amy Funes was making US$38,000 in an administrative role at a New York City nonprofit when she found out she was pregnant. She began looking for childcare options, and was informed that she earned too much to qualify for the state subsidy that she would need to afford full-time daycare.
Americans currently pay among the most in the world for childcare in terms of share of income, according to the latest figures from the Organisation for Economic Co-operation and Development (OECD) — a ratio that has worsened as costs have risen. Last year, the average weekly daycare rate for one child in the US was US$321, up from US$284 a year earlier. In New York City, the rates are about 16 percent higher. Partly as a result, the US has one of the lowest percentages of women in the workforce among developed countries.
The last time the US had a universal childcare system for pre-elementary school-age kids was during World War II, when women supported their families while men fought overseas. Since that ended in 1946, nothing has replaced it. Parents now often rely on a patchwork of expensive private carers, part-time daycare for children too young to enroll in kindergarten, help from grandparents or other family members who live nearby, and babysitters and nannies to fill in the gaps.
Once her son was born, Funes, now 44, came to the conclusion that New York’s public assistance system was structured in a way that made it impossible for her to both work and access subsidized daycare. Leaving her job was the only way she was able to receive short-term benefits. Eventually, she and her son Leo moved into a shelter.
“I cannot believe it’s this difficult for a single parent to take care of one child,” she said.
Many New Yorkers feel the same way. In 2022, a study by the Economic Development Corp showed that the city lost about US$23 billion as a result of parents scaling back their working hours or relocating due to childcare issues.
With childcare becoming increasingly unaffordable, some states are testing creative solutions. Kentucky enacted a rule that made all childcare workers eligible to receive free childcare themselves. In New Mexico, one of the poorest states in the country, voters passed a measure that would allow it to fund universal preschool through oil revenue.
When local governments provide free daycare services, parents do use them — if they fit their schedules. In 2014, Vermont rolled out 10 hours per week of universal pre-K to children between the ages of three and five. A follow-up analysis of the 2018-2019 school year found that such free partial programs were less likely to be at capacity than full-day private ones, suggesting that for many parents, a complete day of care outweighed concerns over cost.
UNITED ARAB EMIRATES
In the United Arab Emirates (UAE), a federation consisting of seven cities with a disproportionate number of high-income earners who hail from abroad, well-off parents usually choose between two options: nanny or nursery.
Most of the expat community live or work in Dubai, known for being the regional hub for business and leisure. Many people there hire nannies, who tend to charge as much or more than daycare — which cost an annual average of 64,275 dirhams (US$17,500) last year — with fees going up depending on a person’s experience, language skills and nationality. Almost all nannies come from abroad, and under the UAE’s kafala, or “sponsorship,” system, must be hired through a government process that can take up to two years to complete and require employers to pay for visas and fees associated with insurance and travel.
Amber Dale considered these factors when she began looking for childcare. She ultimately opted to send her son to a nursery — partly to cut costs and partly because after years of COVID-19 pandemic isolation, she wanted him to be around other children.
Yet that decision forced Dale to reorganize her life around childcare. To afford nursery, the 46-year-old had to dip into her savings. To make sure somebody was home when her son got out at 2pm, she had to significantly reduce her hours at her marketing consultancy.
The emirate is the 18th-most expensive city in the world, and according to Dale, about two-thirds of her income goes toward her son. Now that he is in school, she and her partner spend US$23,958 a year on school, up from US$17,424 when he was in daycare. Working fewer hours has meant getting fewer clients and rising costs have made budgeting necessary. The price of her son’s favorite biscuits has gone up by a third since early last year. Two hours in an indoor play area — a necessity in the scorching city-state — sets her back US$44.
For people like Dale, who is neither Emirati nor extravagantly wealthy, it is getting harder to live in Dubai, a place the Indian national has called home for more than two decades. About 4,500 millionaires were expected to move to the UAE last year, and while Emiratis can defray higher costs through benefits, including cheaper tuition and medical care, there are no such protections for foreigners. As a result, many are downsizing or considering other options, like Saudi Arabia.
“As expats, we also have to factor in visa costs and unexpected expenses,” Dale said of herself and her husband. “We’re lucky to live in Dubai, we love it here, but it’s definitely hard to budget for kids.”
BRAZIL
Cirlea Paulichi manages a nursery that serves about 100 children in the city of Sao Paulo. Paulichi is a lawyer by training, but after losing her job nine years ago, the 51-year-old transitioned to childcare.
The children who attend Paulichi’s center are between the ages of four months and five years old. Most arrive at 7am and stay until 7pm five days a week. For this, families pay about 2,000 reais (US$404) per child per month, in a country where the minimum wage is US$268 a month. While the government technically provides free public daycare, long waiting lists and a shortage of spots mean that only a lucky few can access these services. As a result, only 30 percent of children in Brazil younger than three are enrolled in daycare.
This access gap has only widened in recent years. More than 2,500 of Brazil’s roughly 74,400 daycare centers permanently closed during the pandemic, and private centers have reopened at three times the rate as public ones.
In her nine years running the daycare, Paulichi said that her biggest challenge has been striking a balance between covering the center’s expenses and staying competitive — especially as inflation and higher energy prices have driven up operating costs.
“What I spend to feed 100 children today is what I spent on 140 children before the pandemic,” she said.
When families struggle to make ends meet, she sometimes offers flexible arrangements to keep children at her center.
While Paulichi worries that many parents see daycare as expendable, Brazil has demonstrated the difference it can make. In 2007, lawmakers in Rio de Janeiro began allocating spots in free public daycare through a lottery system, replacing a first-come, first-serve model. A decade later, households that had secured spots had higher average incomes, driven largely by the fact that grandparents and older siblings were able to join the workforce, and parents could keep their jobs, rather than quitting to take care of kids.
UNITED KINGDOM
Monthly nursery costs for Fawn Hudgens’ two-year-old daughter rose in April last year from ￡1,200 to ￡1,335 (US$1,523 to US$1,694). Hudgens, who worked as a vice president of marketing for a London-based software company, was also spending US$182 a week on a Friday nanny share. When she and her partner broke down the numbers, they realized that childcare was costing them more than US$19,000 a year — approximately 15 percent of her salary.
While the couple had been considering another baby, they could not see a way to afford the additional care, which is most expensive for infants. Instead, the best options were for Hudgens to either leave her job to watch both children or wait until her older daughter turned three before having another, at which point they would become eligible for up to 30 hours a week of free nursery care. But that was a year and a half away.
“It takes a toll,” the 39-year-old said of her situation. “The idea of my having to stay home instead of working if we wanted a bigger family is not great.”
Government benefits are relatively generous in the UK, granting up to six months of paid maternity leave and subsidies to offset nursery costs for children older than three, regardless of income. Low-income families are eligible for additional subsidies through a program called “universal credit,” which offers up to 15 hours a week of free childcare for two-year-olds, a small monthly revenue from the state and as much as 85 percent reimbursement for childcare costs.
Even so, OECD data showed that parents in the UK spend on average 29 percent of their household income — about US$17,000 a year — on childcare, one of the highest ratios in the world.
This puts many women in the UK in the position that Hudgens found herself in — earning too much to qualify for low-income government subsidies, yet not enough to comfortably afford full-time childcare. Close to 40 percent of women in the UK rolled back their hours in the year to March last year to look after their children, a poll conducted for Bloomberg News by Deltapoll showed. The survey also found that one in five Britons have left the workforce altogether for the same reason. The economic impact of childcare costs — that is, the missing output of women who have reduced working hours because of a lack of good care options — is estimated to be at least US$32.7 billion, the UK think tank Center for Progressive Policy said.
Efforts are being made to unwind these dynamics. Nearly three-quarters of all companies now offer “enhanced maternity leave,” which provides at least six weeks of full pay for new mothers, and in March last year, the ruling Conservative Party unveiled a plan to increase funding to care providers, and to gradually roll out benefits over the next two years. All working parents with children younger than five should be able to access 30 hours of subsidized childcare a week by September next year, when the full measures are to be implemented.
Under the plan, Hudgens estimates her childcare spending would be reduced by half. That would not fix everything, but it would still be “a godsend,” she said.
JAPAN
Women do not have the option of dropping out of the workforce in Japan — instead, they are typically expected to hold down a job, take care of kids and run a household.
Rie Yanagisawa, 35, does all of this. Alongside her daily five-hour shifts at a semiconductor-related firm in central Japan, Yanagisawa spends eight hours a day looking after her two young children while her husband works between 60 and 65 hours a week, often getting home at about 10pm.
“I’m basically a single parent on weekdays,” said Yanagisawa, who worked full-time until the birth of her first child five years ago.
Such arrangements are common in Japan, where women with small children shoulder about seven hours a day of unpaid housework and childcare, roughly five times as much as men, often while holding down a job. Female labor participation rates have shot up in the past decade, and as of August last year, nearly three-quarters of working-age women held some form of employment.
While Japan’s roughly 40,000 state-backed nurseries are far more affordable than their counterparts in the US and the UK, costing an average of ￥29,500 (US$200) a month, the system lacks flexibility — Yanagisawa has to pick up her children the moment one of them has a slight fever, and childcare is not on offer when she is not at work. Other options are also limited. Hiring nannies is socially frowned upon and expensive, and as young people from rural areas flock to cities, grandparents are far less available to look after children.
Such challenges, combined with persistent wage stagnation, are contributing to Japan’s falling birthrate, which is already among the world’s lowest.
Japanese Prime Minister Fumio Kishida has pledged about US$23.5 billion to reverse this decline, but previous efforts to incentivize having children — including making childcare free for three-to-five-year-olds, providing cash handouts to households with children, and subsidizing children’s medical fees — have fallen flat.
For now, some of the more promising initiatives are coming from the private sector.
Cosmetics giant Shiseido, for instance, offers up to five years of maternity leave, reduced working hours until a child turns nine, employee subsidies for breast pumps and pumping breaks twice a day. Trading firm Itochu Corp has adjusted its core work hours toward a morning-focused schedule, allowing employees with small children to leave after 3pm and prohibiting work after 8pm. These family-friendly policies have made an impact: Shiseido has topped local rankings of Japanese firms with the most empowered female employees, and for the year ending in March 2022, the fertility rate among Itochu’s employees rose to 1.97, far above the national average.
For Yanagisawa, having the flexibility to work part-time means that she will probably stay with her current employer for a while, despite being paid less than she would like.
“Right now I’d rather focus on looking after my kids,” she said. “I’ll probably use my company’s shorter-hour work program to the full, until my youngest turns seven.”
In an article published in Newsweek on Monday last week, President William Lai (賴清德) challenged China to retake territories it lost to Russia in the 19th century rather than invade Taiwan. “If it is really for the sake of territorial integrity, why doesn’t China take back Russia?” Lai asked, referring to territories lost in 1858 and 1860. The territories once made up the two flanks of northern Manchuria. Once ceded to Russia, they became part of the Russian far east. Claims since then have been made that China and Russia settled the disputes in the 1990s through the 2000s and that “China
China has successfully held its Forum on China-Africa Cooperation, with 53 of 55 countries from the African Union (AU) participating. The two countries that did not participate were Eswatini and the Sahrawi Arab Democratic Republic, which have no diplomatic relations with China. Twenty-four leaders were reported to have participated. Despite African countries complaining about summit fatigue, with recent summits held with Russia, Italy, South Korea, the US and Indonesia, as well as Japan next month, they still turned up in large numbers in Beijing. China’s ability to attract most of the African leaders to a summit demonstrates that it is still being
Trips to the Kenting Peninsula in Pingtung County have dredged up a lot of public debate and furor, with many complaints about how expensive and unreasonable lodging is. Some people even call it a tourist “butchering ground.” Many local business owners stake claims to beach areas by setting up parasols and driving away people who do not rent them. The managing authority for the area — Kenting National Park — has long ignored the issue. Ultimately, this has affected the willingness of domestic travelers to go there, causing tourist numbers to plummet. In 2008, Taiwan opened the door to Chinese tourists and in
Taiwan People’s Party (TPP) Chairman Ko Wen-je (柯文哲) on Thursday was handcuffed and escorted by police to the Taipei Detention Center, after the Taipei District Court ordered that he be detained and held incommunicado for suspected corruption during his tenure as Taipei mayor. The ruling reversed an earlier decision by the same court on Monday last week that ordered Ko’s release without bail. That decision was appealed by prosecutors on Wednesday, leading the High Court to conclude that Ko had been “actively involved” in the alleged corruption and it ordered the district court to hold a second detention hearing. Video clips
RSS