Former Daycare Worker Asks: If Daycare Is so Pricy, Why Are the Workers Making Minimum Wage?

Allison DeGrushe - Author

Dec. 14 2023, Published 11:20 a.m. ET

A former daycare employee questioned the reason behind her low wages, especially considering that the daycare facility was generating thousands of dollars monthly.
Source: TikTok / @awalmartparkinglot / @user8848817318678

Why is it that the most important and highly demanded jobs are the most undervalued and underpaid? A prime example is the case of daycare workers, aka unsung heroes, who are busy molding young minds during a crucial phase of learning that heavily relies on meaningful interactions with nurturing adults.

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In November 2023, TikTok creator @awalmartparkinglot shared that she used to work as a teacher in daycare β€” and she barely made minimum wage. What's the deal with that? The daycare joint brought in a decent amount of money each month, so where did it all vanish? Keep scrolling for all the known details.

A teacher and three toddlers in daycare.
Source: Getty Images

Stock photo

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Daycare prices vs. worker wages: Woman sparks debate online.

In the now-viral video, posted on Nov. 18, 2023, the TikTok creator emphasized the outrageous cost of daycare. She pointed out that childcare can be incredibly costly for some parents, sometimes amounting to thousands of dollars monthly. All in all, it's just a significant financial burden.

That being mentioned, the TikToker disclosed that she previously worked as a daycare teacher and earned a mere $8 per hour. Upon examining various daycare job opportunities, the TikTok creator noticed that they typically offer wages just slightly above the minimum wage in the respective area.

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This raises the question: Where does the money parents pay for daycare services go? Who ultimately gains from these expenses? Regrettably, it doesn't contribute to the income of those diligently providing childcare.

As per the Center for American Progress, current compensation rates leave numerous early childhood educators living in poverty, with nearly 40 percent needing to rely on public assistance at some point.

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Susan Gale Perry, the CEO of Child Care Aware of America, recently addressed this issue with Marketplace, telling the outlet, "The main reason that child care is so expensive has to do with just how many people you need in a classroom to make sure that little, little children are healthy, safe, and learning every day."

Classrooms must also adhere to specific ratios, which can vary depending on the state and type of program. Federal guidelines indicate that adults at childcare centers should not care for more than a few toddlers or infants at a time, with these restrictions becoming more lenient as the children grow older.

Due to these limitations, this entails hiring more staff, resulting in higher payroll costs. Additionally, there are other expenses such as supplies, insurance, utilities, equipment, and advertising.

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TikTok users agreed that most of the daycare funds go toward supplies.

At the time of writing, TikTok creator @awalmartparkinglot's trending video has amassed over 184,400 views and counting. The video has also received more than 900 comments from fellow TikTokers asserting that the daycare industry follows a failing business model.

"My MIL is the director of a daycare center and she says a lot of the money goes into the fact that they provide food, snacks, and formula for the kids"
Source: TikTok
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"I've added it up! It's licensing fees and insurance and supplies and many other things," one person said.

A second TikTok user agreed, writing, "Insurance [and] licensing fees are a lot, BUT the owners also make much more than the staff."

"While some preschools are profitable, most are break-even," a third TikToker commented. "Insurance, licenses, cost of supplies, wages for teachers/staff, benefits (if available). I have an MA in ECE. I could write a book about the issues in preschool budgeting from both school and family perspectives."

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"I owned a daycare and made less than my employees (but my kid was there for free obvi). The building, food, licensing, employment taxes, utilities…"
Source: TikTok

Another person shockingly revealed, "I'm on the board of our [daycare] and see the financials. The overhead to run the daycare is insane. Any pay increases go to keeping the lights on."

"I owned a daycare and made less than my employees (but my kid was there for free obvi)," someone else responded, noting that most of the expenses went toward "the building, food, licensing, employment taxes, [and] utilities."

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