Comment by AnthonyMouse
5 months ago
> That either means that childcare is too expensive or teachers don't get paid enough (probably both tbh)
It's not necessarily either one. If you do it yourself, you reuse the existing home instead of needing a separate building with its own rent, maintenance and security, the children and the adult watching them wake up in the same place instead of both having to commute to the childcare building, you have no administrative costs in terms of hiring, HR, accounting, background checks, etc. By the time you add up all the additional costs, you can easily end up underwater against doing it yourself even if each adult in the central facility is watching more kids -- and that itself is a cost because then each kid gets less attention.
Yip. Oddly enough, this has a lot of economic parallels with cooking at home vs eating out. For a silly example, you can make an Egg McMuffin for a tiny fraction of what you'd pay at McDonalds for one. Yet McDonalds (franchise, not corporate) operate on single digit profit margins. Why?
Because when you buy that Egg McMuffin you're not just paying for it. You're paying for an entire building of workers, the rent on that building, their licensing fees, their advertising costs, their electric costs, and much more. When you make it at home you're paying for nothing but the ingredients.
So it creates a paradoxical scenario - you're getting charged way more for stuff than if you made it yourself, but yet somehow you're not getting ripped off.
Poorer people use home-based daycares, which has the same cost advantages.
It doesn't. You still need someone to commute to where the daycare is because they don't live there, transaction costs related to payment processing, and that's often illegal if you do it for money because of zoning ordinances etc.
Those facilities also often don't qualify for subsidies like this because it allows all the people doing it themselves to claim the subsidy. Either you take care of your own kids as before but sign up as a daycare that only your own kids attend to get the subsidy yourself, or you find someone else who takes care of their own kids and then each sign up to watch the other's kids when you each actually watch your own. And you rightfully should be able to get the subsidy if you're doing it yourself, except that then it gets a lot more attractive to actually stay at home, which the government doesn't like because it makes the program more expensive and corporations hate because it reduces supply in the labor market.