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Yanagisawa spends eight hours a day caring for her two young children, while her husband works between 60 and 65 hours a week.
© Noriko Hayashi/Bloomberg
Inflation is driving up the cost of childcare around the world.
The economy has to pay a high price for this - as do women.
(Bloomberg) -- Rising inflation around the world is driving child care costs to unprecedented levels.
According to mobility company ECA International, average child care costs rose six percent in 2023 compared to the previous year, while they increased nine percent in the United States.
Reversing this trend is key to pulling the economy out of recession, boosting growth and creating a fairer society, but so far many governments have done little to ease the financial burden on parents of young children.
“The economy as a whole pays a high price for women not working”
The burden is disproportionately high on women, who generally have to take on the majority of child care.
Given the choice of working solely to afford child care, many women choose to reduce their working hours, forego promotions, or leave the workforce altogether.
Others choose to have fewer children or no children at all.
The pressure to return to the office has not helped many mothers only be able to enter or stay in the workforce under flexible arrangements.
“The economy as a whole is paying a heavy price for women not working,” said Adriana Dupita, an analyst at Bloomberg Economics.
“Global GDP could be about 10 percent higher if women's labor force participation equaled that of men.
In the United States, an estimated $237 billion is lost each year because women reduce their workload to care for children.
In the EU, this figure is around 242 billion euros ($255 billion).
Study after study has shown that higher female labor force participation increases production and reduces inequality and extreme poverty.
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Given these benefits, governments and companies are experimenting with ways to accommodate working parents.
In Japan, some companies offer subsidized child care and family-friendly housing as part of employee benefits.
In the UK, where many employers are offering “enhanced maternity pay” to retain new mothers, the government plans to expand subsidized childcare rates.
However, as long as costs remain high, everyone loses out.
When it comes to how women choose to live, work and raise their families, child care costs are the deciding factor,” said Joeli Brearley, founder of the British charity Pregnant Then Screwed.
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Bloomberg examined five countries to examine the impact of higher child care costs and the ways in which mothers are forced to make compromises between their families and their jobs.
USA: Child care costs $321 a week
Four and a half years ago, Amy Funes was making $38,000 as an administrative assistant at a nonprofit in New York City when she found out she was pregnant.
She looked for childcare options and learned that she earned too much to receive the government subsidy she would need for full-time care.
According to the latest OECD figures, Americans are currently paying the most for child care as a percentage of income - a ratio that has only worsened as costs have risen.
In 2023, the average weekly child care fee for a child in the U.S. was $321, up from $284 the year before.
In New York City, fees are around 16 percent higher.
This is partly because the U.S. has one of the lowest percentages of working women among developed countries.
The last time there was a universal child care system for preschool children in the United States was during World War II, when women supported their families while men fought overseas.
Since this system ended in 1946, nothing has replaced it.
Today, parents often rely on a patchwork of expensive private caregivers, part-time care for children too young for kindergarten, help from grandparents or other family members who live nearby, and babysitters and nannies to fill the gaps.
After her son was born, Funes, now 44, concluded that New York's welfare system was structured in a way that made it impossible for her to both work and receive subsidized day care.
Quitting their jobs was the only way to receive short-term benefits.
Eventually she and her son Leo moved into a home.
“I can’t believe it’s so difficult for a single parent to take care of a child,” she said.
Many New Yorkers feel the same way.
According to a study by the Economic Development Corporation, the city lost about $23 billion in 2022 because parents reduced their work hours or moved for childcare.
As child care becomes increasingly unaffordable, some states are exploring creative solutions.
Kentucky enacted a rule that would entitle all employees who work in child care to receive free child care.
In New Mexico, one of the poorest states in the country, voters approved a measure that would allow the state to fund universal preschool care using oil revenues.
When local governments offer free childcare services, parents will use them - if they fit their schedule.
In 2014, Vermont introduced 10 hours per week of universal preschool care for children ages three to five.
A follow-up analysis for the 2018/2019 school year showed that such free partial programs were less likely to be used to capacity than private full-day programs, indicating that for many parents a full-day childcare place is more important than worrying about costs.
UNITED ARAB EMIRATES: Nanny or crèche
In the United Arab Emirates, a seven-city federation with a disproportionate share of high earners who come from abroad, wealthy parents typically have a choice of two options: nannies or daycare.
Most expatriates live or work in Dubai, which is known as a regional business and leisure hub.
Many hire nannies there, who typically cost as much or more than a daycare center - which averaged 64,275 dirhams ($17,500) per year in 2023 - with fees increasing depending on the person's experience, language skills and nationality.
Almost all nannies come from abroad and must be hired under the UAE's kafala, or "sponsorship," system, through a government process that can take up to two years and requires employers to pay for visas and related fees with insurance and travel.
Around the world, rising inflation is driving child care costs to unprecedented heights.
© Maira Erlich/Bloomberg
Amber Dale took these factors into consideration when she began looking for child care.
Ultimately, she decided to send her son to daycare — partly to save costs and partly because she wanted him to be around other children after years of pandemic isolation.
But this decision forced Dale to reorganize her life around childcare.
In order to be able to afford a daycare center, the 46-year-old had to use up her savings.
To ensure that someone was home when her son left the house at 2 p.m., she had to significantly reduce her working hours at her marketing consultancy.
The emirate is the 18th most expensive city in the world, and Dale says about two-thirds of her income goes to supporting her son.
Now that he's in school, she and her partner spend $23,958 a year on school, compared to $17,424 when he was in day care.
Because she works fewer hours, she has fewer clients, and rising costs require budget planning.
The price of her son's favorite cookies has increased by a third since the beginning of 2023.
Two hours in a covered play area - a necessity in the sweltering city-state - costs $44.
For people like Dale, who is neither Emirati nor particularly wealthy, it is becoming increasingly difficult to live in Dubai, a place the Indian woman has called home for more than two decades.
Some 4,500 millionaires were expected to move to the UAE last year, and while Emiratis can offset the higher costs through perks such as cheaper tuition fees and medical care, there are no such protections for foreigners.
As a result, many of them have to save or consider other options, such as Saudi Arabia.
“As expats, we also have to factor in visa costs and unexpected expenses,” says Dale about herself and her husband.
“We’re lucky we live in Dubai, we love it here, but it’s definitely difficult to plan for kids.”
BRAZIL: Expensive daycare centers - boom among private individuals
Cirlea Paulichi runs a daycare center with around 100 children in the city of São Paulo.
Paulichi is a trained lawyer, but after losing her job nine years ago, the 51-year-old switched to childcare.
The children who attend Paulichi's center are between four months and five years old.
Most people arrive at 7 a.m. and stay until 7 p.m. five days a week.
For this, families pay about 2,000 reais ($406) per child per month, in a country where the minimum wage is $268 per month.
While the government technically provides free public daycare, long waiting lists and a lack of places mean only a lucky few are able to take advantage of these services.
As a result, only 30 percent of children under three years old in Brazil attend daycare.
This access gap has widened in recent years.
More than 2,500 of Brazil's roughly 74,400 daycare centers have been permanently closed during the pandemic, and reopenings of private facilities have been three times higher than public ones.
In the nine years Paulichi has been running the daycare, her biggest challenge has been covering the facility's expenses while remaining competitive - especially as inflation and higher energy prices have driven up operating costs.
“What I spend today on feeding 100 children, I spent on 140 children before the pandemic,” she says.
When families are struggling to make ends meet, she sometimes offers flexible arrangements to allow children to remain at her center.
While Paulichi fears that many parents see day care as dispensable, Brazil has shown what a difference it can make.
In 2007, the legislature in Rio de Janeiro began allocating places in free public daycare centers through a lottery system, replacing the first-come, first-served model.
A decade later, households that had secured a place had higher average incomes, largely because grandparents and older siblings were able to enter the workforce and parents were able to keep their jobs rather than give them up to pursue a career to look after the children.
UNITED KINGDOM: Generous government benefits
Monthly crèche costs for Fawn Hudgens' two-year-old daughter rose from £1,200 to £1,335 ($1,459 to $1,698) last April.
Hudgens, who works as vice president of marketing at a London software company, also spent $182 a week on a nanny who worked Fridays.
When she and her partner crunched the numbers, they discovered that childcare was costing them more than $19,000 a year - about 15 percent of their salary.
Although the couple had considered having another baby, they saw no way to afford the additional care that is most expensive for small children.
Instead, Hudgens' best option was to either quit her job to take care of both children or wait until her older daughter was three years old before having another child;
They would then be entitled to up to 30 hours of free child care per week.
But that was still a year and a half away.
“It’s very stressful,” says the 39-year-old about her situation.
“The idea that I would have to stay at home instead of working if we wanted to have a bigger family is not nice.
Government benefits in the UK are relatively generous: they provide up to six months of paid maternity leave and subsidies towards childcare costs for children over the age of three, regardless of income.
Low-income families are eligible for additional subsidies under a program called Universal Credit, which provides up to 15 hours a week of free child care for two-year-olds, a small monthly allowance from the state and reimbursement of up to 85 percent of child care costs.
Yet data from the OECD shows that parents in the UK spend an average of 29 percent of their household income - about $17,000 a year - on child care, one of the highest rates in the world.
This puts many women in the UK in the position Hudgens found himself in - earning too much to qualify for government low-income grants, but not enough to afford full-time childcare.
Almost 40 percent of women in the UK have reduced their working hours by March 2023 to care for their children, according to a survey conducted by Deltapoll on behalf of Bloomberg News.
The survey also found that one in five Brits have left the workforce for the same reason.
The economic impact of child care costs - that is, the underperformance of women who have reduced their working hours due to a lack of good childcare options - is estimated to be at least $32.7 billion, according to the British think tank Center for Progressive Policy.
Efforts are being made to resolve this dynamic.
Nearly three-quarters of companies now offer “extended maternity leave,” which gives new mothers full pay for at least six weeks, and last March the ruling Conservative party unveiled a plan to increase funding for childcare facilities and phase in benefits the next two years.
All working parents with children under five should have access to 30 hours of subsidized childcare per week until September 2025, when the measures are fully implemented.
Hudgens estimates that her child care expenses would then be cut in half.
It wouldn't fix everything, she said, but it would still be "a godsend."
JAPAN: Women juggle the household, children and career
In Japan, women do not have the option to opt out of the workforce - instead, they are typically expected to hold down a job, care for children, and manage the household.
Rie Yanagisawa, 35, does it all. In addition to her daily five-hour shifts at a semiconductor company in central Japan, Yanagisawa takes care of her two small children eight hours a day, while her husband works between 60 and 65 hours a week, often before Comes home at 10 p.m.
“On weekdays, I’m basically a single parent,” says Yanagisawa, who worked full-time until the birth of her first child five years ago.
Such arrangements are common in Japan, where women with young children do about seven hours a day of unpaid housework and childcare, about five times as much as men, and often also work a job.
Female employment rates have skyrocketed over the past decade, and as of last August, nearly three-quarters of working-age women were in some form of employment.
While Japan's roughly 40,000 government-funded daycare centers are far more affordable than their counterparts in the United States and United Kingdom, averaging 29,500 yen ($200) per month, the system lacks flexibility - Yanagisawa has to pick up her children as soon as one of them She has a mild fever and no childcare is available when she is not working.
The other options are also limited.
Hiring nannies is socially frowned upon and expensive, and as young people flock to cities from rural areas, grandparents are far less available to care for children.
These challenges, combined with continued wage stagnation, contribute to Japan's falling birth rate, already among the lowest in the world.
Prime Minister Fumio Kishida has promised about $23.5 billion to reverse that decline, but earlier efforts to incentivize childbearing - including free childcare for three- to five-year-olds, providing cash to households with children and the Subsidizing medical costs for children - have failed.
At the moment, some of the most promising initiatives are coming from the private sector.
The cosmetics giant Shiseido, for example, offers up to five years of maternity leave, reduced working hours until the child is nine years old, subsidies for breast pumps and pumping breaks twice a day.
The trading company Itochu Corp.
has set its core working hours in the morning, allows employees with small children to leave after 3 p.m. and prohibits work after 8 p.m.
These family-friendly measures have had an impact: Shiseido tops the local ranking of Japanese companies with the most female employees, and for the year ending March 2022, the birth rate among Itochu's employees rose to 1.97, well above the national one Average.
For Yanagisawa, the flexibility of working part-time means she will likely stay with her current employer for a while, despite earning less than she would like.
“Right now I’d rather focus on taking care of my kids,” she said.
“I will probably make full use of my company's short-time work program until my youngest is seven years old.
By Alice Kantor, Yuko Takeo, Ella Ceron, Catarina Saraiva, Leonardo Lara and Abeer Abu Omar
We are currently testing machine translations. This article was automatically translated from English into German.
This article was first published in English on February 3, 2024 at the “Washingtonpost.com” - as part of a cooperation, it is now also available in translation to readers of the IPPEN.MEDIA portals.