TKW Consulting

Minnesota / State ranks fifth in child care costs
Staff-child ratios, teacher pay add to price

Minnesota's child care centers are among the most expensive in the nation, according to a report released Tuesday ranking states by the percentage of income a family spends on child care.

That's bad news and good news for parents.

The bad news is that centers in Minnesota now charge an average of $12,000 per year for full-time infant care, more than tuition at the University of Minnesota.

The good news is that the higher costs reflect Minnesota's tighter licensing requirements, lower staff-to-child ratios and better pay - all indicators of better quality.

"Most people don't have a clue of what child care costs until they have their first child," said Anne McCully, executive director of the Minnesota Child Care Resource and Referral Network. "Then the sticker shock sets in."

The average infant fee at Minnesota centers accounts for 45 percent of the median annual income for a single parent in Minnesota and 15 percent of median income for a household with two parents. Only Wisconsin, Massachusetts, Washington and Pennsylvania are more expensive, according to "Parents and the High Price of Child Care: 2007 Update" from the National Association of Child Care Resource & Referral Agencies.

The average cost for a preschooler at one of the state's 1,600 licensed child care centers is only slightly lower, at $9,200 per year, which still represents 35 percent of the median single-parent income and 12 percent of a two-parent household income.

Affordable child care is considered to be about 10 percent of a family's income, said McCully.

"Yes it's expensive," said Sarah Youngerman, a St. Paul mother who got on the waiting list for one of the 84 slots at the University of St. Thomas Child Development Center before she was even pregnant with her first child. The center's annual fees range from $12,500 for preschoolers to $16,500 for infants.

Youngerman figures about two-thirds of her salary goes to day care for her 1-year-old son and her 2½-year-old daughter. "But we see this as an investment in early childhood education," said Youngerman, who noted that her daughter gets weekly music classes and will be going on a field trip to an apple orchard this month. "We love the staff-to-student ratios. We love the philosophy of how they treat children there and the relationships they develop with parents."

Staff salaries and benefits account for 60 percent of Minnesota child care center costs, according to a 2006 report from the state Department of Human Services that looked for ways to curb rising child care fees. And salaries in the field are notoriously low.

For example, the starting salary for teachers at the University of St. Thomas Child Development Center is $27,500, and teachers there consider themselves lucky to receive benefits such as health care, disability insurance, sick leave and vacation, said director Becca Swiler. Facilities claim about 20 percent of costs, with the remainder going to items such as food and programming. Profit margins are extremely low.

"It's not that child care providers are getting rich. They're not. It costs a lot to take care of children," said McNully.

About a third of Minnesota parents use center-based care as their primary arrangement, including child care centers, preschools, Head Start and before- and afterschool programs, according to a 2004 Wilder Research survey.

The child care cost update also noted that in Minnesota, the average fee for putting one infant and one preschooler in a center ($1,447 per month) was greater than the average mortgage payment ($1,351). And it noted that the cost of child care is increasing faster than inflation.