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Google Case Highlights High Costs of Day Care
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Google Case Highlights High Costs of Day Care Internet giant Google, which employs 19,000 people, used its in-house day care facilities as a corporate recruiting perk as the company grew rapidly a few years ago. Two massive and fully equipped centers, the Kinderplex and the Woods, featured the most cutting-edge early childhood care.

At the Kinderplex, a company called Children's Creative Learning Centers provided "learning in a play-based, developmentally appropriate environment that incorporates a variety of activities and multicultural aspects in a thematic style." Google ran the Woods itself, using a trendy preschool philosophy called Reggio Emilia.

For a time, it seemed that Google's in-house day care was just another factor making Google the nation's number one "Best Company to Work For," as Fortune Magazine declared it in both 2007 and 2008. But then Google announced in three secretive focus-group meetings a huge price increase that left many of the parents who attended the meetings in tears.

The company planned to raise the price of infant day care from $1,425 a month to almost $2,500. Toddler and preschool care, too, would rise sharply. According to New York Times business reporter Joe Nocera, the average family with two children in Google day care would go, under the new plan, from paying $33,000 a year to paying over $57,000.

Why the steep increase in day care costs? Until now, Google has been subsidizing its day care at a rate of $37,000 a year per child. Most other companies in Silicon Valley subsidize day care for their top employees' children at close to $12,000 a year. Through the drastic increase in the cost to parents, Google hopes to narrow the gap between what parents pay and what this state-of-the-art day care actually costs.

In response to many complaints, Google scaled back the price increase slightly and decided to raise rates slowly over five quarters, instead of overnight. The changes nevertheless brought up many questions about employee day care, and the astronomical price of the highest quality center-based day care. (New York Times, 7-5-08)

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