Child Care Challenges Cost $359 Million in Lost Wages Weekly for Americans

Finding child care is often a difficult and costly hurdle for working families with children. Parents increasingly report that child care costs strain their monthly budget. Even after making arrangements, plans may fall through and emergencies may spring up, forcing parents to leave early, take part or all of a week off or not work at all.

These challenges have had a sizable impact on worker earnings. According to the newest MagnifyMoney study, child care challenges cost U.S. workers hundreds of millions in weekly wages.

Analysts calculated how many paid work hours Americans lose weekly and how much they subsequently lose in wages. In addition to ranking the states with the most lost wages, we’ll go over the states that lose the most wages per 1,000 households with children.

Key findings

• Americans lose 17.9 million paid work hours weekly to child care challenges, coming to $358.9 million in lost wages. Workers lose $9,545 per 1,000 households with at least one child younger than 18.
• The states that lose the most wages are the three largest in the U.S. California tops the list, with workers losing $57 million in wages a week. Following that, New York workers lose $33 million and Texas workers lose $31 million. On the other end, Americans in Wyoming, Delaware and North Dakota lose the least in wages overall.
• When focusing solely on households with minor children, New Hampshire tops the list. Workers in New Hampshire lose $22,687 per 1,000 households with children every week. The District of Columbia and Washington state follow at distant rates of $17,110 and $16,291, respectively, per 1,000 households with minors.
• Wyoming households with children lose the least in wages. In the Equality State, the rate of wages lost is $2,966 per 1,000 households with children. That’s followed by Louisiana ($3,308) and Missouri ($3,568).
• Lost hours are the main driver of lost wages rather than lower wages. The states with the highest rates of lost wages per household with children are among the states with the highest rate of lost paid hours, leading with New Hampshire and the District of Columbia. Similarly, Wyoming and Louisiana have the lowest rate of lost paid hours.

Americans lose $359 million in wages a week

MagnifyMoney estimates Americans lose 17.9 million paid work hours weekly to child care challenges, which we put at $358.9 million in lost wages.

We tracked lost paid hours based on four self-reported scenarios:

• Took off the previous week because of child care problems
• Work part time because child care problems prevent them from having full-time hours
• Work full-time hours but had to do part time last week because of child care problems
• Haven’t looked for work in the past four weeks because of child care problems

There are 37.6 million households with children in the U.S., meaning working families with child care problems lose 476.4 hours per 1,000 households with children — or $9,545 a week in wages per 1,000 households with kids.

MagnifyMoney executive editor Ismat Mangla says parents are often forced to choose between their work and their children, which impacts lost hours and wages.

Largest states lose the most in wages

Before breaking down the states by households with children, let’s look at the states that lose the most wages overall because of child care problems.

On a broader level, states with the largest populations lose the most working hours — and, subsequently, the most wages — weekly. California, the state with the largest population (39.2 million), ranks highest for total wages lost weekly because of child care problems. Texas, Florida and New York, the three largest states behind California, all rank among the 10 that lose the most weekly wages.

Similarly, the smallest U.S. states lose the least weekly wages. Wyoming, which has the smallest population, ranks last. The next four states with the smallest populations — namely, Vermont, the District of Columbia, Alaska and North Dakota — all rank among the 10 that lose the least weekly wages.

There may be a few reasons why the largest states lose more wages than smaller states, but it’s likely because more people risk losing working hours. In fact, seven of the top 10 states are among the top 10 states with the largest working populations, with California, New York and Texas ranking in the top three. Similarly, seven of the 10 lowest-ranking states are among the 10 states with the smallest working populations, with Wyoming at the bottom of both lists.

New Hampshire loses the most in wages per 1,000 households with children

While the largest U.S. states lose the most wages, an analysis of working parents and guardians paints a different picture. When looking at the rate of weekly wages lost per 1,000 households with children because of child care problems, New Hampshire ranks highest by a wide margin.

Here’s a breakdown of the top five:

• New Hampshire: $22,687 lost wages weekly
• District of Columbia: $17,110
• Washington state: $16,291
• New Jersey: $15,896
• Hawaii: $15,404

The District of Columbia notably shoots to second place, up from 46th in overall lost wages. This is largely due to the district’s relatively small population. There are just under 662,000 working residents in D.C. — the 13th-lowest of any state — so overall losses are much smaller than the total wages lost in larger states.

On a per-household basis, however, a higher percentage of D.C. workers with kids are affected than those in larger states. It’s also worth noting that residents in the district have higher median wages than the largest U.S. states, at around $91,000 annually. Comparatively, the median wages in the three largest states range from $63,800 to $78,700 — meaning residents in the District of Columbia generally lose more wages when they lose paid work hours.

Meanwhile, many of the bottom 25 states sink further down the list, with Wyoming ranking lowest again. Among the states that lose the least weekly wages per 1,000 households with children, the bottom five are:

• Wyoming: $2,966 lost wages weekly
• Louisiana: $3,308
• Missouri: $3,568
• Minnesota: $4,583
• Maryland: $4,952

Lost hours are the culprit behind lost wages

While it may be easy to assume that consumers are losing wages because they’re making less overall, the discrepancy between the state and per-household rankings likely boils down to one key factor: lost hours.

There are significant similarities between the states that rank highest for the rate of lost wages per 1,000 households with children and the states that rank highest for the rate of lost hours. New Hampshire and the District of Columbia rank highest here, too. While Hawaii slips into third, Washington state is just one rank below.

Here’s a look at the states that lose the most working hours per 1,000 households with children:

• New Hampshire: 1,095.5 lost hours weekly
• District of Columbia: 780.9
• Hawaii: 752.8
• Washington state: 730.2
• Kentucky: 700.5

Meanwhile, four of the five states that lose the least weekly wages on a per-household basis keep the same rankings. The states that lose the least working hours per 1,000 households with children are:

• Wyoming: 166.6 lost hours weekly
• Louisiana: 173.3
• Missouri: 189.4
• Minnesota: 228.2
• Delaware: 250.2

Mangla says rising costs in particular are likely a major child care challenge that could account for the number of paid work hours working households with children lose, as many consumers are increasingly unable to afford reliable care.

“The cost of child care has skyrocketed, putting many middle-class families in a tough situation,” Mangla says. “Often both parents have to work to make ends meet — but child care costs eat into those earnings.”

Expert tips for working parents

Although working full time and raising children may be difficult to balance, you don’t have to sacrifice one for the other. For working consumers who can’t necessarily afford child care but can’t risk working fewer hours either, Mangla offers the following advice:

• Make a budget. While child care is more expensive, salaries are rising at a faster rate — so if you can budget for child care, Mangla encourages it.
• Invest in your savings. It may be tough amid inflation (Americans are pulling from their savings at the highest rate so far in 2022, according to the MagnifyMoney July Savings Index). But if you can put aside any leftover cash you have at the end of the month, Mangla suggests putting money for last-minute care (when needed) in a high-yield savings account.
• Request child care from family and friends when they’re available. If your child’s plans fall through and you can’t afford last-minute care or risk losing wages, consider turning to those closest to you for support.
• Take advantage of government-funded assistance programs. Depending on your circumstances, you may be able to take advantage of state and federal financial assistance programs. Some states offer programs to support child care costs for low-income households. See the programs for which you may be able to qualify.

Methodology

For each state and the District of Columbia, MagnifyMoney analysts combined lost paid hours from those who reported they:

• Were jobless but hadn’t looked for work in the previous four weeks because of child care problems
• Normally work full-time hours but only worked part of the previous week because of child care problems
• Regularly work part time and are unable to work full time because of child care problems
• Had taken the previous week off of work because of child care problems

To calculate the number of normally full-time workers who were unpaid for their time off, we multiplied the number of qualifying workers by the rate of people absent from work in the previous week and were also unpaid for that time.

Lost paid hours were defined as:

• 35 hours for those not currently working
• 35 hours minus the number of hours typically worked for the qualifying part-time workers
• 35 hours minus the average number of hours worked for usually full-time workers
• 35 hours for those who were absent for the entire week

Lost hours were calculated with U.S. Census Bureau microdata from the March 2021 Annual Social and Economic Supplement (ASEC) of the Current Population Survey (CPS), as well as microdata average monthly results (July 2021 to June 2022) from the Basic Monthly CPS.

Average hourly wage data was calculated from the Basic Monthly CPS June 2022 microdata, while households with minor children are from the Census Bureau 2020 American Community Survey with five-year estimates.