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Biden's $15 minimum wage could hike child care costs by 21% on average: expert
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The $15 federal minimum wage increase proposed by Democrats will lead to higher child care costs for many families as child care providers pass on the costs of higher wages to parents, according to an analysis by Rachel Greszler, economics research fellow at the conservative-leaning Heritage Foundation.
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Establishing a $15 minimum wage would hike child care costs by an average of 21% across the U.S., which translates to $3,728 per year for a family with two children, according to Greszler's analysis. Families in lower-cost states like Louisiana, Oklahoma and Missisippi would see the biggest increase, Greszler wrote.
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"With childcare consuming even more of family budgets — 40 percent or more in of the median household incomes in a lot of states — many families could be priced out of the childcare market completely," Greszler wrote in a paper published Thursday. "In turn, the unintended consequences of a $15 minimum wage could force some parents to give up their jobs and live on lower household incomes, while causing others — particularly single parents — to turn to non-licensed, typically illegal, childcare."