The typical NYC family is spending more than 25% of its income on childcare — triple what's deemed affordable

• New York City families are spending over a quarter of their income on childcare.
• The city's childcare is unaffordable for the typical family earning under $300,000, per a federal standard.
• The US is facing a childcare crisis that could get worse when federal funds expire at the end of the month.

New York City is known for its sky-high housing costs, but there's another expense that's taking a chunk out of families' budgets: childcare.

The typical New York City family is spending over 25% of its income to pay for the childcare of just one kid, according to data from the Department of Labor. That's more than triple what the US government deems affordable. For its New York City childcare expenses to meet the federal standard for affordability, a family would need to earn roughly $300,000 per year.

Childcare costs many of the city's families over $20,000 per year, but many of those same households are also spending roughly two-thirds of their income on rent, per a Moody's Analytics report from May, leaving little room in New Yorkers' wallets for anything else.

But these high prices don't mean that childcare providers and their employees are getting rich: A quarter of childcare workers in NYC live in poverty, according to The Robin Hood Foundation, a nonprofit focused on reducing poverty in the city.

New York City is not alone in its childcare crisis. Across the country, families are struggling to afford and find childcare at the same time providers are struggling to hire workers and stay afloat financially. And the problem might get worse at the end of the month when childcare funding from the American Rescue Plan is cut off. Over 70,000 childcare programs could close in the coming years due in part to the end of the funding, according to a June report from the nonpartisan think tank The Century Foundation. Additionally, more than three million kids could be impacted.

The seeming contradiction in the US childcare system, in which many parents can't afford care and many providers can't afford to stay open and pay their workers, can be explained in part by the industry's adult-to-child ratio requirements, experts told Insider. The labor-intensive nature of the industry raises payroll costs and can make it difficult for providers to turn a profit.

"Economies of scale do not apply to childcare in the same way as with other economic sectors," Taryn Morrissey, a professor of public policy at American University, previously told Insider. "Unlike higher education, for example, lecture halls with hundreds of students would not work for infants' and toddlers' care and education."

Some states, like Kansas, have considered expanding their ratio requirements to make things easier on providers, but critics have raised safety concerns.

Cindy Lehnhoff, director of the National Child Care Association, previously told Insider that more funding — not changing ratios — is what's necessary to resolve the national crisis.

"It is going to take an investment from our federal government to come forward and to think about the return on investment if you invest in early childhood and childcare so that people can go to work and earn salaries and pay taxes and then also you're growing a better workforce," Lehnhoff said.

Are you struggling to afford childcare or finding creative solutions? Do you own a childcare center? Share your story with this reporter at [email protected].