Bad news for parents: the price tag of education and childcare continues to go up and up.
Just check out this chart from a recent Brookings Institution analysis of consumer price data from the Bureau of Labor Statistics, depicting the change in different household costs relative to median U.S. income over recent decades:
There are many notable indicators on this chart. First, the prices of energy, gas and medical services are rising much faster than income. Yet the cost of appliances and personal computers have dropped. And the price tag for that new car has crept up much more slowly than income.
Yet the most jaw-dropping item on the chart is that skyrocketing dark blue line indicating the rise in childcare and educational costs. That line goes reaches so high it doesn’t even fit on the chart. A commentator with the Brookings Institute refigured the chart to portray just how frighteningly high child care and tuition costs have become:
Childcare and tuition costs encompass elementary, high school and college tuition and fees, plus child care and nursery school, according to the BLS.
Although they’re not represented on the chart, other significant prices are also rising way above income, including rent, legal and professional services, and hotel rates.
“These large sectors and the high prices they charge are contributing heavily to the slipping economic position of American households,” the Brookings analysts wrote.
The households these economists are referring to are low- and middle-class households, who get hit much harder when the costs of necessities rise. That has increased the pain and slow destruction of the middle class over the past few decades. And it has also caused a huge drag on the U.S. economy, which relies heavily on consumer spending. As the Wall Street Journal pointed out in its own analysis of consumer price data, the skyrocketing rise in health care, rent and education has created a drop in spending on clothing and entertainment. This has caused big retailers and restaurant chains to struggle to get customers to spend.