The Parent Tax: Preschools Must Do More to Help Working Families

By Ben Newton, Co Founder and COO

It is no surprise that New York City’s young middle class family population is shrinking. Rising costs for housing and child care coupled with high taxes make even as much as $300K in household income seem insufficient to raise a family of four. For me to say $300K is insufficient feels as ridiculous to say it as it is to type it, but the reality is that a family of four that lives in a 2 bedroom apartment in Manhattan ($6K a month in many neighborhoods) that pays for full time child care for their children ($2.5K per month per child under 5 on the low end) will spend close to 70% of their post tax dollars on these two expenses alone. The decline of quality of life of New York’s middle class families is growing exponentially and the negative impact extends well beyond the household. New York City’s traditional child cares and preschools must do more to alleviate the “Parent Tax," which is the cost of living burden that only NYC parents of young children face.

The exorbitant cost of child care in NYC is significantly exacerbated by an unnecessary deficit of coverage hours. While the number of dual income households has grown significantly since the 1960s, the parents of today say they spend about 10 more hours a week on child care related issues. Why is this the case? Most child child cares and preschools do not run during hours aligned to working schedules. Child cares for children under two generally operate eight hours a day and the highest performing preschool programs offer even fewer hours (typically six hours daily for the 3s and 4s) for only 160 days a year. As a result, parents that need to accommodate commutes and their careers are strapped not only with the cost of programming ($40 to $50K per year), but also after hours and summer care, which can add another $10K to $20K in annual costs. These realities have put tremendous strain on New York’s workforce. Today, close to 50% of women leave their job after having a child (not always a choice of their own), the average employee misses 24 full or partial days due to the daily realities of child care, and 83% of working families would take a job with better family benefits that offers equal or less pay.

NYC’s most highly regarded child care and preschools must do more to align their operating hours to the daily schedule of working families. Modifying structural offerings to a 7:00 AM to 7:00 PM day for as many as 250 days a year is as salient a solution as it is achievable. First, on the importance, the benefit of children having access to high performing programming extends well beyond the early years and has been shown to have positive long term impacts on an individual’s ability to learn and pursue their passions. In addition, parents who are supported with not only coverage, but also robust adult education and community (the hallmark of top tier programs in NYC) are happier with their children. On the structural side, this does not mean that children are tucked away in centers for 12 hours a day. Quite the opposite, longer hours of coverage should be presented to parents as available if needed and the ability to keep a child in a single place with a familiar group of adults can limit the over scheduling that many young children in NYC encounter. Finally, from a cost perspective, extending the hours of the day does not have to necessarily impact the cost of operating or the tuition to parents. On the former, if the most experienced early childhood educators are present during the main portion of the day and apprenticing co- teachers provide early morning and after hours care, staff numbers do not need to materially change. Limiting the extra 2 to 3 hours of coverage a family may need on a daily basis will save parents money and can even go to marginal increases in tuition. Many private preschools that are facing enrollment issues due to changing demographics may find that such measures will improve enrollment when they offer programs that parents actually need.

Child cares and preschools aligning their offerings to the needs of today’s working families could have positive impacts well beyond incremental enrollments. For the NYC ecosystem on the whole, programs that are aligned to working schedules could open up opportunities for improved work life balance, cost sustainability, employee happiness, employer subsidies, and perhaps, most importantly, improved pay for women.