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Comment by legitster | Hacker News Reader

A lot of the "regulations" baked into childcare aren't really going to move the needle - the inefficiencies are baked into the model. I don't care how lax your state is, you're not going to run a successful childcare center with 100 kids and 1 caretaker. So the cost of childcare is always going to be linked strongly to median prevailing wages.

While I think Baumol may have something to say here, I think we should listen to Henry George a bit more. The lion's share of overhead for a daycare goes towards its real estate costs. Similarly, it's a growing share of cost of living for both the workers and the customers. And as Henry George pointed out, the cost of housing goes up without creating economic value for anyone.

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The knock on effect of high housing costs is driving force behind price increases and declining quality of service everywhere.

It’s an absurd situation here in California, where we are some of the richest people in history, but because the cost of housing so high, the price of everything is driven to the breaking point… meanwhile, the important jobs required for a nicely ran country are too expensive to afford and so our transit, healthcare, service industry, etc is awful.

> The lion's share of overhead for a daycare goes towards its real estate costs.

Not really. Salaries are by far the highest cost.

And the largest part of those salaries is again used to pay for housing.

Roughly one thirds of American incomes go to cover housing. Cheaper housing means lower wage demands.

Yeah but real estate costs a close Second. Then probably insurance

Not that close. For example for the place where my child went to day care, the rental was $6K/mo but salaries were near $35K/mo. And that was just direct salaries, I don't have the numbers for other employee overhead costs like social security, 401k, medical, etc, so it's quite a bit more than that. This was in California. So safe to say the employee costs were at least 7x the real estate rental cost.

Daycare is expensive even when located in places where they get free or heavily subsidized rent, like church basements.

The people working there don’t live in the church

> the cost of housing goes up without creating economic value for anyone

This is kinda wrong. It does create value for the people who are loaning out the money that the working class uses to purchase the houses. Of course, in this context that value goes straight to the hands of bankers and never leaves but it's worth noting that this situation that the working class hates happens to be rather beneficial to the capital class.

That is value transfer not value creation.

> cost of housing goes up without creating economic value for anyone

The banks capture that in interest payments.

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