One startling metric may explain why so many millennials are opting to not have kids: The cost of child care is astronomical.
Apartment site HotPads.com recently analyzed data from both the U.S. Census Bureau and Care.com’s Care Index to compare how median rent and average child care costs measured up with one another in dozens of major U.S. cities. While costs can vary by region, HotPads found that, on average, one month of either at-home or in-center child care costs roughly $1,385/month. Median rent for all U.S. cities studied was $1,500/month, meaning the cost a parent can expect to pay to have a professional look after their child while they’re at work almost equals the cost of housing.
In fact, in 13 cities studied, renters who have children living with them can actually expect to pay more for child care than for rent. These cities are mostly in the South and the Midwest, like Charlotte, North Carolina and Detroit, Michigan. However, Northeastern and Mid-Atlantic cities like Buffalo, New York and Pittsburgh, Pennsylvania are also on that list. Rent and child care costs are roughly the same in Las Vegas, Nevada, Atlanta, Georgia, and San Antonio, Texas.
The skyrocketing costs of everyday necessities like providing shelter and caring for one’s children along with stagnant wages may be why the U.S. fertility rate has hit record lows in two consecutive years. In May, the New York Times reported that the birth rate fell to just 60.2 per 1,000 women of child-bearing age, which is the lowest recorded fertility rate since the peak of the Great Recession in 2010.
While the Times report primarily attributed the falling birth rate to societal changes, like women becoming more focused on building their professional careers before having children, economic issues are likely a primary contributor to the low birth rate for millennial women. As Grit Post reported last month, some primary differences between the millennial generation and the baby boomer generation are the cost of higher education (which is often seen as a prerequisite to getting a good-paying job) median debt levels, and median income levels.
Unsurprisingly, debt and the cost of college rose at approximately the same rate, while median income remained mostly flat. The percentage of people between the ages of 25 to 34 who owned homes dropped by nine percent between 1977 and 2016, meaning more young Americans today are renting than their parents’ generation.
This may be because median home prices have jumped from $45,500 in January of 1977 ($192,785 in today’s dollars) to $218,000 today, according to real estate site Zillow. The significance of median income remaining at $34,000/year between 1977 and 2016 can’t be understated. In 2016 dollars, $34,000/year becomes $137,694/year.
If a renter with children in the home is making the median national income of $34,000/year, they’re unable to simultaneously pay the national median $1,500/month in rent ($18,000/year) and the national average child care cost of $1,385/month ($16,620/year), as they’re already $620 in the red without even accounting for other basic necessities like food, utilities, transportation, and other obligations like student debt payments.
Given the ever-increasing costs of rent, student debt, and child care costs, it’s no wonder millennials aren’t having children.
Logan Espinoza is a freelance contributor specializing in economic issues. He lives in Phoenix, Arizona with his wife and daughter. Contact him at logan DOT espinoza AT yahoo DOT com.