Raleigh, North Carolina – Parents in North Carolina with young children experienced a notable decrease in their financial well-being last year, based on a recent study by the Federal Reserve. The Survey of Household Economics and Decisionmaking revealed a decline among parents with children under 18 who felt financially secure, dropping from 69% in 2022 to 64% in 2023, marking the lowest percentage since 2015.
The Federal Reserve’s data did not explicitly cite the reason for the significant drop in financial security among participants. However, experts point to the impact of two key recent events that have disrupted many American families’ finances: the expiration of the expanded child tax credit during the pandemic and the withdrawal of support for child care services.
Following the end of the expanded child tax credit in 2022, many families faced decreased disposable income, increased poverty, food insecurity, and financial stress. Ongoing challenges emerged nationwide as a result, with parents struggling to cover emergency expenses and facing food insufficiency.
Another crucial pandemic program that provided additional financial support to child care centers has also come to an end without being reinstated. This has led to rising prices or closures for the majority of child care organizations nationwide, creating what is known as the “child care cliff.”
In North Carolina alone, nearly 1,800 child care programs were projected to close due to the lack of financial support. Unfortunately, seeking relief from Washington to address this issue has become increasingly challenging due to resistance from congressional Republicans aiming to reduce the federal budget.
Overall, the financial well-being of most Americans slightly worsened in 2023, with only 72% reporting that they were “at least doing okay” financially. This is a decline from previous years and a concern for many households as they navigate economic challenges such as rising inflation rates.
In response to growing inflation concerns, President Joe Biden has urged retailers to lower prices. Recent efforts from retailers like Target to reduce prices on everyday items aim to alleviate the financial burden on Americans. However, a recent poll indicated that more voters trust former President Donald Trump over President Biden to address inflation and cost-of-living issues, despite concerns that Trump’s proposed solutions could potentially lead to price increases.
The ongoing financial struggles faced by parents and families underscore the importance of addressing key economic challenges to ensure the well-being of all Americans, particularly those with young children. As policy debates continue on how to support struggling families, the impact of these decisions on households across the nation remains a critical concern.