With the minimum wage taking center stage in Sacramento and across California, a new analysis puts an interesting spin on the debate.
The left-leaning Economic Policy Institute took a look at the current minimum wage in each state, compared it to the average cost of child care and computed how much of the annual income those costs eat up.
It’s not a pretty picture.
While federal guidelines say child care should consume no more than 10 percent of a family’s income, the cost of infant care is more than half of a full-time minimum-wage worker’s total earnings in 37 states. The cost of care for a 4-year-old is more than half of total salary in 20 states, according to the study released this week.
“Child care is simply out of reach for workers who support their families on minimum-wage jobs,” the institute says.
Though the numbers don’t account for any government aid or other assistance in paying day care costs, it’s still rather startling.
In California, it takes 63 percent of a minimum-wage worker’s total pay to cover infant care costs, and 44 percent for a 4-year-old’s care. That percentage for infant care is higher than in most neighboring states, while the figure for 4-year-olds is roughly on par.
The study also takes a page out of anti-tax groups’ playbook of sending out alerts about how long you have to work to pay income taxes to Uncle Sam. By that measure, it takes the average minimum-wage worker in California until August to make enough to pay for infant care, and June for 4-year-old care.
The situation will improve, but only slightly, when the statewide minimum wage rises from $9 now to $10 on Jan. 1. It will still require 57 percent of total income to pay for infant care, and 40 percent to pay for a 4-year-old’s care.
There’s a campaign to put on the November 2016 ballot an initiative to further increase California’s minimum wage by $1 a year until it hits $15 in 2021. Later this month, the Sacramento City Council is to vote on a plan to gradually raise the local minimum to $12.50 by 2020.
As this study shows, however, merely raising the lowest wage isn’t enough if we want to improve the lives of working families. Some of them are also going to need more help paying for child care, one of the biggest expenses for families, as a previous institute study showed.
The Legislature and Gov. Jerry Brown have restored a good chunk of cuts made to state child care and preschool programs during the recession. The 2015-16 budget includes $265 million in additional funding. But the state is still offering 50,000 fewer day care slots than before the recession, and nearly 300,000 children are on waiting lists.
All politicians want people to work for a living, even if it’s a low-paid job. But not all, it seems, are willing to invest enough so Californians can go to work confident their young children are in a safe and nurturing place.
By the numbers
Annual minimum wage income and average annual child care costs for a 4-year-old in selected states:
- California: $18,720 salary, $8,270 child care cost
- Arizona: $16,744, $7,489
- Nevada: $17,160, $8,381
- Oregon: $19,240, $8,797
- Washington: $19,698, $9,502
- Florida: $16,744, $6,787
- New York: $18,200, $12,539
- Texas: $15,080, $6,783
Source: Economic Policy Institute