Typical Michigan Families Can't Afford to Have Kids: Study

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If you’re part of a typical family in Michigan paying for child care, a new report from the Economic Policy Institute probably comes as no surprise.

The bottom line: You probably can’t afford child care.

The report looked at the average cost of care for an infant and a 4-year-old, and how child care fits into a typical family’s budget.

Child caretakes up 16.5 percent of a typical median family income of $59,940, and is unaffordable for typical families in Michigan, according to the study, which showed only 26 percent of Michigan families can afford infant care.

That’s according to the U.S. Department of Health and Human Services, which considers child care affordable if it costs no more than 10 percent of a family’s income.

Child care workers aren’t exactly getting rich, though. Nationally, their families are more than twice as likely to live in poverty as other workers’ families — 14.7 percent compared with 6.7 percent, according to the study.

In Michigan, child care workers struggle even more. In nine of 19 metropolitan areas in Michigan, more than 90 percent of child care workers don’t make enough to afford the basic cost of living in their areas.

The study said a typical child care worker in Michigan would have to spend 50.3%of her earnings to put her own child in infant care.

Here are some of the other findings:

• The average annual cost of infant care Michigan is $9,882, or $824 per month.
• For a 4-year-old, the annual cost is $6,764, or $564 each month.
• Infant care in Michigan costs just $1,413, or 12.5 percent, less than in-state tuition for a four-year public university, which has an annual cost of $11,29
• Infant care costs 6.1 percent more than average housing costs in Michigan, which are around $9,317.

Famlies an infant and a 4-year-old, child care costs $16,646 — 78.7 percent more than average rent in Michigan.

• Child care for an infant and a 4-year-old costs more than rent in all 20 metropolitan and rural areas in Michigan.
• A typical family in Michigan would have to spend 27.8 percent of their income on child care for an infant and a 4-year-old

The authors of the study said it is a clarion call for reform, which would benefit society in general in several ways:

• Meaningful child care reform that capped families’ child care expenses at 10 percent of their income would expand Michigan’s economy by 1.3 percent, creating $5.7 billion of new economic activity.
• A typical Michigan family with an infant could save $3,888 on child care costs if reform were implemented, freeing up 7.8 percent of their annual income to spend on other necessities.

Image credit: SkiStar via Flickr / Creative Commons