“KPMG, a well-known audit, tax and advisory firm, has brand-new research on how significant the cost of child care has become. ‘Marketplace Morning Report‘â€â€™ host David Brancaccio talked about it with Diane Swonk, chief economist at KPMG. The following is an edited transcript of their conversation.â€
Diane Swonk: It’s been going up. You know, they’ve been tracking it since 1990. And the index — if you benchmark it against overall inflation — it’s gone up 263% since 1990 to April 2024. Now the same index, the [consumer price index], the one we all look at for inflation: 133%. It really gets to the issue that parents are really stuck in right now — the largest generation, I might argue, of 30-somethings we’ve ever seen. We’ve got 12,000 millennials turning 35 every day. And they’re in the thick of this, trying to pay for child care costs, which are — affordability, the government has said you should pay maybe 7% of your income for child care costs. They’re running 10% to 20%.
David Brancaccio: So you and a colleague crunched some of the government numbers. You went a little bit deeper. And what were some of the surprising things that emerged?
Swonk: My colleague, Matt Nestler, just started working for us. And he’s just fabulous, but he’s in the thick of it, [along with] all my other colleagues: two children under 2; one is a newborn. Had to move across country, has been looking for hours and hours and days upon days to try to find affordable day care. And it’s very difficult — they can’t. And when we were looking at the numbers, what was stunning was not only how expensive and how fragmented the child care system is — over half of Americans live in what we call a child care desert, without even any access to child care beyond their immediate family and friends — but more importantly it also is so expensive, and it’s affecting the labor force.
— “Child care costs are a big part of why Americans feel inflation still stings,†by David Brancaccio and Alex Schroeder, Marketplace Morning Report, May 29, 2024