Monday, November 24, 2008

Day Care Price Increase

Last week we received notice that the price of our child care was about to increase from $1,132 per child per month to $1211, a 7% increase starting January 1. Since we have three kids going to this day care center (our oldest participates in the after school program), we are about to take a $300 a month hit to our budget, with the total monthly cost of day care going well above $3,000. Our rent has also increased recently from $2,000 to $2,100. Not a dramatic rise, but together with the day care, our non-discretionary spending has just increased by $400 a month or almost $5,000 in after tax spending...

While I make very decent money as a VP in my small technology company, my wife is currently contracting part time after quitting her previous position. It goes without saying that in this economic environment, the chances of either my wife or I getting a raise are practically non-existent. This means that the proposed increases are going to come directly out of the amount we were planning to save.

The day care price increase is not yet finalized. Our day care is city owned (one of only a few such facilities in our area), and the city council must approve the increase in a council session scheduled for tomorrow. Many parents are planning to show up at the session to plead our case that in such bad economic times raising prices is really unacceptable. Based on research conducted by one of the parents we believe that the price increase is meant to allow for raises to the day care staff, and while we would certainly like to see this dedicated team make more money, we don't think that this year such raises are legitimate.


Mr. ToughMoneyLove said...

You didn't ask for comments to this post but I thought I would chime in anyway. The government should not be involved in child care, period. Child care is the parents' responsibility, not the government's. It is particularly problematic when the taxpayers end up subsidizing child care. In your case, that is what will happen if your protests are successul. The alternative is that the childcare workers will not receive the anticipated raises. If the latter, do you really want unhappy government employees - already among the lowest paid workers - caring for your children?

Shadox said...

First, I am always asking for comments. That's why I have a comments section. :-)

Second, you raise some excellent points, and I must say that I agree with ALL of them. In this specific case I feel like a complete hypocrite. I am with you on government involvement, but the increase in cost is extremely painful, especially in this economy.

I will say this - the day care providers in our school are extremely well paid compared to private day cares. They also enjoy very good social benefits, including retirement benefits which are not typical in the private sector.

I am really torn about this one.

SuburbanWife said...

I feel your pain. While not in exactly the same situation, we, too, are facing a potential tuition increase next year and the possibility leaves me feeling conflicted.

As much as I support the teachers and staff and understand that they'll be struggling as much or more than our family, a tuition increase would be most unwelcome.

We really wouldn't have a choice, though, since next year will be our daughter's senior year and pulling her out before graduation would be an incredibly drastic, traumatic, and unpopular decision.

Mr. ToughMoneyLove said...

Have you run the numbers and weighed the cost/human benefits of caring for your children at home? We tried full time child care for a short while and for what little extra net income it allowed, the human costs did not justify it. It is a very difficult problem for all two career families but remember this: It was your choice to have children. In that case, the interests of the children must trump yours. Good luck to you in this very important decision. I've been there.