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Comment by mbreese | Hacker News Reader

The devil is in the details. The crux of the article is in these two lines:

> Across the U.S., the average annual cost of care for an infant and a 4-year-old is $28,190, according to Child Care Aware of America. The U.S. Department of Health and Human Services (HHS) considers child care affordable when it accounts for no more than 7% of a household’s income.

It’s been awhile, but the $28k number seems reasonable. It’s more expensive in different areas and the article goes into the numbers by state. But the part where it gets difficult to see is the 7% number. You only require $400k/year if you cap child care costs at 7%. When my kids were in daycare, it cost significantly more than 7% of our income.

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With all due respect, why in the world does 28k sound like a reasonable number for care of a single child? That's more than many people make at a full time job.

Day care and pre schools charge like 2k/mo for full time care and 5 days a week.

An enterprising person, great with children, would see an opportunity to make 72k a year to watch three kids. And another might offer to do it for 60k, and so on.

Regulations prevent that, and kill the free market. Now everyone pays a crapton to some facility where the owner jumped through all the hoops to get certified, while hiring minimum wage people to care for the kids. Not that some aren't great, but is it really a better system?

Idk if your selling it well. Plenty of other careers will pay more and give you health insurance and stability. Probably with alot less work too.

Reality shows that the outcome are centers with a television on 24/7, or where kids are given drugs to sleep. That's not the exception but the rule. That's why inspections and licensing came in.

The longterm costs of that -- crime, mental health, etc. -- explain why subsidies make sense. Every rich country has universal public education for a good reason.

Market forces, as you point out, will drive your enterprising person making 72k out-of-business very quickly, and the market becomes a cesspool.

Cost of living for staff and lawful child to caregiver ratios. If you assume 1:4 or 1:5, that's around 100-125k per caregiver in tuition.

With reasonable overhead numbers (space, management, compliance, licensing, taxes, etc.), that's a poverty-level income for preschool teachers.

There is a strong argument for subsidies, at least in countries which have low birth rates and care about longterm social outcomes.

I didn’t mean that it was a reasonable cost, only a reasonable estimate of the cost.

Childcare in the US is way more expensive than it should be. The costs are also highly location dependent with the coasts being much more expensive than the Midwest etc…

Isn't that the cost for two kids?

Yes, you're right. I'd read the quote out of context and for whatever reason read it as "for either of these ages", but the preceding sentence clarifies it as two individual kids. Still absurd to me, but perhaps less so.

And taking care of an infant is extra hard. The laws where I live mandate twice as many workers per infant compared to 3-4 year olds, and three times as many compared to school age kids.

If you pick 3% you need 800k/yr! Oh no!

Sadly most of us pay far more than 7%. Fortunately mostly that’s ok and it all works out.

(Except we will work until we die, but hey! Capitalism!)

In every system from hunter-gather society, feudalism, socialism and capitalism you need to exchange your work for the products of the work of other people. No system will give you the ability to not work and get what you want.

The capitalism is the least bad one where there the correlation between "making something that people want" to the value you can keep to feed yourself.

Your comment is a bit of a non sequiter.

The parent comment is complaining about capitalism draining savings such that retirement becomes impossible.

Other systems have robust retirement available for the elderly.

Really?

Where will these resources will came from if the capitalist system is the most productive of them all? You can't redistribute something out of nothing. You need a healthy tax base to redistribute.

Childcare is just too regulated and people don't want to do it and ask for a premium on childcare.

Retirement in socialist country? Or in China before the capitalism came there? Or in a feudal society where your children where your insurance in the old age?

Why don't you ask them "where will these resources will came from"? This isn't a hypothetical we're discussing, most of Europe has protected retirement.

All countries in Europe are certainly capitalist, though (by any definition that define US as capitalist).

And situation in countries in France where the average retiree now somehow has higher disposable income than those still working is far from ideal.

Okay, sure, whatever.

The original commenter was saying something more like "we will work until we die, but that's okay, because capitalism is great! And it's not like you would get to retire under any other system anyway"

> Other systems

Such as?

The conditions for retirees relative to those still working in the USSR were fairly decent (by the end). But its not exactly fair since the demographic situation there was much better than it is now in most developed countries.

And then all capitalist countries in Europe these days (which coincidentally are all capitalist) generally have similar retirement systems to the US.

Difference between the capitalism our parents had vs us. They had taxes on the rich. So they could afford homes and retire and never needed 3 jobs to scrape by. In fact one job was enough to afford a home and a family.

This is just painfully and obviously not the reason why childcare is so expensive now. Labor costs are higher these days (Baumol's cost disease), regulations have become more strict because we are more protective of our children, and multigenerational living has declined.

Taxing the rich is great but it's not gonna fix any of those.

Taxing the rich means that there are fewer people with absurd money, which means businesses won't have many customers at such high prices. It's like McDonalds charging $5 for a quarter of a potato. They're hoping that the lost sales from the poors at such a high price is made up by fewer high priced purchases by the rich.

If even the rich couldn't or didnt want to afford $5 quarter potatoes then they'd have to lower the price

Do you think that billionaires are buying a meaningful number of large fries from McDonald's? That's... well... good luck with that.

Taxing the rich is not going to solve any of this. It may help some, but it's nothing like the panacea certain people pretend it is.

If we took all the assets from all the billionaires in the US, that total is something like $6-7 trillion if we pretend there's no asset price decrease in the selling of said assets.

Sounds like a lot, but we're nearly $40 trillion in debt. Taxing the rich heavily won't solve a spending problem.

The federal government specifically, and the admin class in general was a lot smaller during our parents' era.

Not all capitalism is equal though. The overlap between socialism and capitalism is state capitalism, and it turns out if you want affordable childcare, healthcare, utilities, public transport, etc. then state capitalism is the way to go.

Read Milton Friedman on why this won't work. If you have seen any government run organization you'll see why.

Taxes can be levied on productive businesses that are in ruthless competition in the free and international market. No productive businesses = nothing to redistribute. No international business == no imports. Everybody is poor and hungry.

There is a difference between productive business and basic infrastructure. Just look at China, they have state capitalism with free market economy according to the 60/70/80/90 rule. The state capitalism covers most basic needs like utilities, healthcare, and public transport extremely efficiently.

The free market economy is ruthlessly efficient in the national and international market due to involution and strategic loans from state-owned banks.

Absolutely wild strategy omitting that child care costs increases are a direct result of the Baumol effect and the Triffin dilemma.

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