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Childcare Expenditures Soar Amid Substantial Inflation Rate, Reveals a KPMG Report
An audit firm report has found that childcare costs have been surging beyond the considerable rate of inflation since the 1990s.
KPMG, a leading accountancy firm, published a report on Tuesday showing a vertiginous 263% escalation in childcare costs from 1990 to April 2024. The consumer price index, a critical gauge for inflation, only ascended by 133% during the identical period.
“Childcare Crisis” Intensifies Amid Pandemic
The findings of the report highlight a pressing childcare crisis that has significantly worsened owing to the pandemic.
In an interaction with Marketplace, Diane Swank, Chief Economist at KPMG, emphasized, “Parents, particularly those in their thirties constituting the largest generation, are firmly caught in this crisis.” Around 12,000 millennials celebrate their 35th birthday daily, grappling with escalating childcare expenses. Swank added that the government’s recommended childcare expense should ideally be about 7% of a citizen’s income.
Women’s Labor Force Participation Impacted
The KPMG study also found a lower work participation rate among women, especially those with younger children, compared to their male counterparts.
For instance, in the last year, the labor force participation rate for mothers with children under six was 69%. In contrast, fathers in a similar situation showed a participation rate of 95%. Furthermore, women with children between 6 to 17 participated at a 78% rate, while men demonstrated a 92% participation rate, as reported by The Hill.
The consumer price index published in February indicated a 3% rise in childcare costs from December 2022 to December 2023. Concurrently, the cost of preschool and daycare services escalated by 4.5%.
KPMG’s Deep Dive into the Childcare Crisis
The report by KPMG offers an in-depth analysis of the childcare predicament, shedding light on its broad impact, its hardest-hit victims, and its adverse effect on potential business growth and overall economic development. According to KPMG, recent economic advances are merely window dressing for a much more profound issue. However, solutions are emerging as multiple companies and states are rising to meet the challenge.
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