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This Career Move Could Cost You $500,000

Patrick Ball on November 16, 2017 10:30 AM

Does it pay to work?

If you have kids – or if you’re even thinking about kids – then chances are you’ve asked yourself that question. Maybe you didn’t bring it up with your spouse or partner. Maybe you didn’t even say it out loud, but it’s a natural question to ask.

And who could blame you for wondering? Child care costs have risen steadily over the past several years, while wages have remained more stagnant. At $18,000 a year, child care is the biggest single budget item for American families – more than the average rent, mortgage and even college tuition payments in many cities and states.

So you start crunching numbers and swimming in spreadsheets. Maybe you ask the question. If you did, you wouldn’t be alone.

More than two-thirds of working parents say the cost of care has influenced their career decisions.  That could mean asking to work from home, scaling back hours, passing up projects or looking for a new job. For some, it could mean putting your career on hold for a bit.

So what’s that look like? Say Emma's a 27-year-old woman making $55,000. She started working at 22, and now she's thinking about starting a family. So Emma plans to take three years away from work after having a baby when you’re 30.

Reality is: This choice could cost Emma more than $500,000 over the course of her career.

The Center for American Progress recently launched an interactive tool to illustrate the hidden costs of our systemic care infrastructure problems. It’s essentially a calculator that invites you to plug in variables like gender, age, current salary, age you started working full time, age when you plan to take time off for caregiving and how long you plan to be out of the labor force. You can also adjust retirement age, 401(k) contributions and employer match. Check it out for yourself here: The Hidden Cost of a Failing Child Care System.

The 27-year-old woman we mentioned earlier? Let’s say Emma’s going to retire at 67, and contributes 5 percent to her 401(k) with a full employer match. Taking three years off will result in a total income loss of $501,409 over her lifetime – figures $180,050 in lost wages, plus lost retirement assets and benefits ($150,152), lost wage growth ($171,207).

Staggering, isn’t it?

And yet, when you layer the high cost of care – typically between 10 and 30 percent of household income – on top of other work-related costs, like time and taxes, many families still wrestle with whether it pays to work.

Our care crisis touches everyone, cutting across all education and income levels. Last year, Harvard Business School released an alumni study reporting 37 percent of Millennial women who aren’t yet moms expect to interrupt their careers for parenting. Crazy, right?

It works both ways. According to's third annual Cost of Care survey, 21 percent of respondents said they've waited to have children specifically because of child care costs. That stat increases to 26 percent among Millennial respondents. Check out our full Cost of Care report here: How Much Does Child Care Cost?

Now, would it surprise you to hear that Japan has a higher percentage of prime-age women’s labor force participation than the United States? Well, it’s true. So does Canada. … And Australia, France, Germany and Switzerland, too.

But what we’re talking about isn’t just a women’s issue – it’s a societal one.

Research has shown that working dads -- who, by the way, spend on average triple the amount of time on child care and household chores as generations past -- are experiencing similar work-family conflict as working moms. And that’s to say nothing of the millions and millions of adults in the “Sandwich Generation,” who are providing some level of emotional, physical and/or financial support to their children and aging loved ones.

Hard-working families are struggling to make it work. And when working families struggle, we all struggle.

Moms, dads and senior caregivers who withdraw from the workforce lose out on future job opportunities and limit their lifetime earning – and spending – potential. Their employers lose talent and institutional knowledge and incur costly turnover expenses. American businesses hemorrhage tens of billions every year due to care-related churn and lost productivity costs. This is bad for the economy, all of it.

By now you’ve probably heard the pop culture references from former President Barack Obama and former Labor Secretary Tom Perez. “It’s a ‘Modern Family’ world,” they liked to say, “but our policies are stuck in …” Obama usually said “Mad Men era,” while Perez preferred “Leave It to Beaver.” 

Television programming preferences aside, they’re saying the same thing. Gone are the days when dad punched the clock from 9 to 5 and mom had dinner waiting on the table when he gets home. In fact, roughly 70 percent of families with kids have no stay-at-home parents. This is reality for today’s families, but our institutional programs and policies haven’t kept up.

So maybe the question shouldn’t be “Does it pay to work?” Maybe we should be asking “How can we make it work?” That, friends, is the question we explore at the CareAtWork blog on's Community platform, where this piece was originally published. 

We’re talking about the best states for working moms and the best companies for working dads. We’re sharing data, stories and infographics. We’re going to give you work-life hacks to help when it feels like the deck’s stacked against you.

This post was originally published on the Community platform. Head over there for more stories on topics like paid parental leave, flexibility and family care benefits.