Due to skyrocketing inflation, parents can now expect childcare cost to be at $310,605 for an average of $18,271 per year over 17 years...
Due to skyrocketing inflation, parents can now expect childcare cost to be at $310,605 for an average of $18,271 per year over 17 years.
According to the Brookings Institution, the multi-year total is now up to $26,011 or more than nine percent from a calculation based on the inflation rate two years ago, before rapid price increases hit the economy.
Contributing to the increase in costs are soaring food prices. The Bureau of Labor Statistics Producer Price Index recently showed that consumer food prices are up by 13.1 percent from the last month, and by a whopping 15.8 percent since last year.
Using 2017 data from the United States Department of Agriculture and adjusting it for the current inflation, the Brookings Institution analysis looked at how other expenses contributed to soaring child-raising costs, including housing, clothing, health care and child care, among other expenses.
Families that wish to have children but are starting at a lower income may be the ones most affected by the rising costs, especially those who are only earning $20,000 to $30,000 per year.
The overall consumer price index also rose from 8.1 percent in July compared to last year, according to an analysis from the Department of Labor.
Polls conducted at the end of June also showed that the rising inflation, gas prices and the economy are among the biggest concerns that American families say they are facing. Of the respondents, as much as 33 percent said that inflation is their top concern.
Parents who are currently doing their back-to-school shopping may also be feeling the full effects of the rising costs of raising a child as families are expected to spend an average of $864 on school supplies this month.
Inflation could lead to a dip in population
Children have always been considered an added family expense, but inflation has significantly increased the cost of raising them, especially for families that are living paycheck to paycheck. This could mean a dip in the population later on as people think twice about raising kids.
“A lot of people are going to think twice before they have either a first child or a subsequent child because everything is costing more,” said Isabel Sawhill, a senior fellow at Brookings. “You also may feel like you have to work more.”
Young families may also worry about where inflation goes from here. To account for the Fed’s actions of raising interest rates to combat the price hikes, Brookings also looked back at trends from the last time inflation was this high – in the 1980s. Their estimates assume average inflation of four percent going forward for children born in 2015.
Sawhill also said it is important to note that the analysis conducted only accounted for the cost of raising a child through the age of 17.
Parents of many adult children also attest that spending doesn’t always stop when their children reach age 17, especially if they seek a college degree. NRF said total back-to-college spending is expected to reach nearly $74 billion, up from last year’s record of $71 billion.
In June, President Joe Biden said tackling inflation is the highest priority for his administration as “too many families are struggling to keep up with their bills.”
Separately, a White House statement said the president plans on tackling inflation “by lowering costs that families face and lowering the federal deficit by asking the large corporations and the wealthiest Americans to pay their fair share.”
Congressional Republicans led by Florida Sen. Rick Scott have also called for a new minimum tax on the middle class such as firefighters and teachers – which could lead to an average of almost $1,500 less in families’ pockets each year.
Whether or not the U.S. will face a full technical recession will be determined in the coming months by the National Bureau of Economic Research when more data becomes available.
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