The more I think about it, the more I realize daycare centers probably don’t make nearly as much money as people assume.

My three-year-old goes to daycare, and we pay around $1,000 per month. Sometimes they send home a list showing which children are assigned to bring certain food items, so we have a rough idea of enrollment. The last time we counted, there were about 18 kids in my son’s class. That’s roughly $18,000 in revenue from that classroom each month.

Now consider the costs. There are four employees plus a manager. Even if each one only makes $15 an hour, payroll alone consumes a huge portion of that revenue. Then there are utilities, insurance, food, equipment, building maintenance, transportation costs for the bus, licensing requirements, and everything else needed to keep the facility running.

If anything, they may not be charging enough.

The real issue is that the entire system seems broken from the start. Daycare is barely affordable for many families, yet many childcare providers are operating on razor-thin margins. Parents struggle to pay for care, workers aren’t highly paid, and daycare centers themselves often aren’t making huge profits. Somewhere along the line, the economics simply don’t work very well.