New Jersey is among 38 states where the cost of childcare surpasses in-state tuition at public colleges, according to data from the Economic Policy Institute (EPI). The nonprofit think tank based in Washington, D.C., found that infant childcare costs in New Jersey rank 13th nationally at $18,155 annually, or $1,315 monthly. For a 4-year-old, the cost is slightly lower at $17,534 per year or $1,461 monthly. These figures exceed the average annual in-state tuition of $15,528.
Althea D. Ford, Vice President of Government Affairs for NJBIA, highlighted the challenge facing New Jersey: "Our rankings highlight the true challenge before the state to meaningfully investigate and implement reforms to tackle affordability issues."
Childcare is essential not only for children's development but also for enabling parents to work. However, it remains a significant expense for many families in New Jersey. Infant care alone consumes 13% of a median family's income of $139,703. For families with two children—an infant and a 4-year-old—childcare costs account for 25.5% of their income, surpassing even housing expenses.
For minimum wage workers earning $32,219 annually, infant care takes up 56% of their earnings. Despite over $1 billion invested by the Murphy administration in affordable childcare over eight years, Ford describes the childcare economy as unsustainable.
"New Jersey has affordability issues," Ford stated. "Childcare costs are one that hurts not only working families but also the state’s economy because it keeps some parents from being able to go back to work."
Ford emphasized that businesses have a vested interest in maintaining a robust childcare system since providers are also businesses serving working parents. She suggested strategic investments utilizing existing licensed and community-based providers while avoiding unnecessary regulations.
NJBIA supports tax credits for employer-provided childcare expenses and certain daycare staff and providers as part of these strategic investments.
