Are Minnesota's day-care costs really the highest in the nation?

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Sharon Carlson and her husband were faced with a tough decision after their two daughters were born. She'd spent 15 years working in cable TV sales. Her husband was a lumber salesman.

"We weren't living high on the hog, but we had good middle-class wages," she said.

After considering the cost of day care, Carlson decided to quit her job to care for the girls until they were school aged.

"I bowed out," she said. "But when kids were off on their own, it was hard for me to jump back into the workforce."

Carlson, of Andover, is 60. Her daughters are 26 and 23. A generation later, not much has changed, she said.

"Businesses say they can't find workers, but there's no flexibility and many people can't afford child care," she said.

Carlson wondered: Why are Minnesota's day-care costs among the highest in the nation? She posed the question to Curious Minnesota, our community-driven reporting project fueled by questions from readers.

Policy experts agree that child care is expensive here. But averages can be misleading, they say, and Minnesota may not be the outlier so often portrayed. Minnesota families paid an average of $16,120 for infant care in licensed child-care centers in 2019, the seventh highest in the nation, based on surveys mandated by the federal government.

Minnesota is one of 33 states plus the District of Columbia where infant care is more expensive than annual tuition at a four-year public college ($11,226) and average rent ($11,137), according to the Economic Policy Institute.

But these figures don't tell the full story, said Ann McCully, executive director of Child Care Aware Minnesota. Costs vary significantly depending on geography and whether care is done at a center or in a home.

"On the one hand, the ranking is great because it can motivate people to take action," McCully said. "But often what gets quoted is just the ranking for centers. We're much less expensive than other states when it comes to family child care, which also so happens to be our predominant market."

Minnesota is unusual in that just 20% of available child care options are at centers, which is the yardstick commonly used in national comparisons. The state licensed nearly 8,000 family child care homes last year, compared to 1,600 centers. The cost of a home-based program is about half that of a center — an average of $8,476 last year.

Using these costs, Minnesota ranks 39th compared with other states.

Not only do child-care centers make up a smaller proportion of the mix of programs in Minnesota, but they tend to be clustered around the Twin Cities metro area and Rochester, where the wages and other costs are higher. These factors can cloud the view of a complex problem: Child care costs families too much and educators earn too little. Meanwhile, evidence is mounting that the state is facing a "quiet crisis" with dwindling numbers of providers.

"You start adding it up," McCully said, "it's a broken market."

Several efforts are underway in Minnesota to try to address concerns of affordability and availability. At last week's start of the Legislative session, Democrats floated a $500 million proposal that includes increasing reimbursement rates paid to providers and providing early learning scholarships for up to 25,000 children.

Also: A legislative task force formed last fall aims to address concerns that excessive regulation may be driving out some day-care providers, in the wake of a Pulitzer Prize winning Star Tribune investigation in 2012 into deaths of toddlers at child care.

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