Michigan Families Spend Nearly a Quarter of Their Income on Childcare

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This article is courtesy of DeMayo Law.

According to the Department of Health and Human Services, affordable childcare costs no more than 7% of household incomes.

For many families, however, this number is a pipe dream as costs soar and childcare becomes more and more unaffordable, particularly for those single-parent families.

With this in mind, a new study conducted by DeMayo Law, a personal injury law firm based in North Carolina, reveals the states where parents face the highest and lowest burdens of childcare costs.

Families in the most affected states reportedly spend over 28% of their annual income on center-based childcare. These findings underscore the heavy financial strain on families and come at a time of potential cuts to federal childcare support programs.

Michigan

Michigan ranks 19th across the nation, with parents spending an average of 23.32% of their annual income on center-based childcare. The state’s average annual cost for childcare is $10,947, while the median annual income is $46,940.

Infant care in Michigan costs the most in the state, with parents paying an average of $11,942 annually, which is 25.43% of the state’s median income. Preschool care in Michigan costs an average of $10,450 annually.

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Top 20 States with the Highest Childcare Costs

Rank	State	Median Annual Income (2023)	Average center-based price (2023)	Average Percentage of Income Spent on Childcare
1	Massachusetts	$60,690	$18,380	30.29%
2	New York	$56,840	$17,119	30.12%
3	Nevada	$44,810	$13,106	29.25%
4	Hawaii	$50,510	$14,584	28.87%
5	Minnesota	$50,880	$14,435	28.37%
6	California	$54,030	$15,112	27.97%
7	Wisconsin	$47,590	$12,990	27.30%
8	Connecticut	$56,130	$15,063	26.84%
9	Vermont	$49,630	$13,030	26.25%
10	Oregon	$50,010	$12,738	25.47%
11	New Hampshire	$49,980	$12,669	25.35%
12	Virginia	$49,920	$12,599	25.24%
13	Alaska	$56,140	$13,822	24.62%
14	Rhode Island	$50,970	$12,528	24.58%
15	Pennsylvania	$47,430	$11,649	24.56%
16	Illinois	$48,730	$11,931	24.48%
17	Missouri	$45,080	$10,971	24.34%
18	New Jersey	$54,860	$13,145	23.96%
19	Michigan	$46,940	$10,947	23.32%
20	Nebraska	$46,440	$10,829	23.32%

Massachusetts leads the nation with parents spending an average of 30.29% of their annual income on center-based childcare. The state’s average annual cost for childcare is $18,380, while the median annual income is $60,690. Infants in Massachusetts cost the most in the country, too, with parents paying an average of $23,191 annually, which is 38.21% of the state’s median income. If you’re raising a family in Massachusetts, you can expect to be spending over 4 times as much as you would somewhere like Mississippi.

In New York, families allocate an average of 30.12% of their annual income to childcare, with an average annual cost of $17,119. The median annual income stands at $56,840. Notably, New York ranks first in the US for preschool and school-age childcare costs, with parents spending 28.39% and 25.34% of their income on these services, respectively.

Nevadans rank third, with parents spending 29.25% of their income on childcare. The average annual cost is $13,106, against a median income of $44,810. Nevada is ranked second for preschool and school-age childcare costs, consuming 27.91% and 23.39% of annual income, respectively.

Families in Hawaii spend an average of 28.87% of their income on childcare services, with an average annual cost of $14,584. The median income in Hawaii is $50,510. The cost for infant and toddler care is particularly high, both at 41.95% of median income, the highest percentages nationwide.

Meanwhile, Minnesota parents spend 28.37% of their annual income on childcare, with an average cost of $14,435. The state’s median income is $50,880. Infant care requires 34.90% of the median income, while toddler care consumes 30.28%.

Rounding out the top 10 most expensive states for childcare are:

California (27.97%), Wisconsin (27.30%), Connecticut (26.84%), Vermont (26.25%), and Oregon (25.47%).

Top 10 States with the Lowest Childcare Costs

Rank	State	Median Annual Income (2023)	Average center-based price (2023)	Average Percentage of Income Spent on Childcare
47	Mississippi	$37,500	$4,636	12.36%
46	Kansas	$45,250	$7,256	16.03%
45	South Dakota	$43,680	$7,115	16.29%
44	Kentucky	$43,730	$7,414	16.95%
43	Arkansas	$39,060	$6,704	17.16%
42	Wyoming	$47,250	$8,198	17.35%
41	Idaho	$44,240	$7,688	17.38%
40	Tennessee	$43,820	$7,625	17.40%
39	Alabama	$41,350	$7,392	17.88%
38	North Dakota	$48,830	$8,782	17.98%

Mississippi ranks as the most affordable state for childcare, with families spending only 12.36% of their income on average. The average annual cost is $4,636, and the median income is $37,500. Infant care costs are 12.97% of income, placing Mississippi last in childcare expense rankings.

In Kansas, the average percentage of income spent on childcare is 16.03%, with an average cost of $7,256. The median income is $45,250. Preschool care is particularly affordable, consuming 15.44% of income, ranking the state 46th for preschool childcare costs.

Families in South Dakota spend an average of 16.29% of their income on childcare, with costs averaging $7,115 annually. School-age childcare is the most affordable, at 14.28% of income.

Kentucky parents allocate 16.95% of their income to childcare, with an average annual cost of $7,414. The median income is $43,730. Infant care expenses are 19.06% of income, ranking the state 45th in this category.

In Arkansas, families spend an average of 17.16% of their annual income on childcare, with an average cost of $6,704. The median income is $39,060. Infant care costs 19.12% of income, while preschool care is 16.58%.

Rounding out the 10 cheapest states for childcare are Wyoming (17.35%), Idaho (17.38%), Tennessee(17.40%), Alabama (17.88%), and North Dakota (17.98%).

Michael DeMayo, founder of DeMayo Law, commented on the study’s findings:

“The high cost of childcare is a significant burden for many families, impacting their financial stability and overall well-being. Parents in states like Massachusetts and New York are dedicating nearly a third of their income to childcare expenses, which can limit their ability to save for the future or cover other essential needs.

It’s crucial for families to explore all available resources, such as state assistance programs or employer-sponsored childcare benefits. Additionally, policymakers should consider steps to make childcare more affordable and accessible, ensuring that parents don’t have to choose between their careers and quality care for their children.”

Methodology

The annual cost of center-based childcare across different age ranges for each state was obtained from the National Database of Childcare Prices (NDCP). Median annual income data per state was collected from the Bureau of Labor Statistics (BLS) for the year 2023.

The percentage of income spent on center-based childcare was calculated by dividing the average cost by the median annual income for each state. Five different rankings were created for the following categories:

Infant center-based childcare
Toddler center-based childcare
Preschool center-based childcare
School-age center-based childcare
Average center-based childcare

Average center-based childcare costs were calculated by averaging the costs of the four different categories of childcare. Due to insufficient childcare cost data, the following states were excluded from the analysis: Colorado, Indiana, New Mexico, and the District of Columbia.