This is not true. Their are only two costs that matter to a daycare center: labor (plus related taxes and benefits) and facilities (rent + cleaning and maintenance).

The labor is by far the largest cost area. When you factor in administrators and different shifts to cover the full-day, the effective ratio of adults to children is just so low. Then you factor in Boston rents and all the cleaning, etc and there’s not much left. Insurance is <$10k/year for a large-ish center, so a pretty small cost. (It’s not like these policies have to pay out almost ever. Tragedies are few and far between, thankfully.)

As for licenses, it’s a couple hundred bucks a year. Regulation is a bureaucratic pain and has some material admin cost in terms of man hours per month to log/track various things, but do you really want daycare to be unregulated? I don’t.

Source: I’m in the business

Edit: I should add, when I said “this is not true” I meant that about the license and insurance cost. It is absolutely is true that the workers are not paid enough, but that’s because there are no economies of scale in daycare so there just isn’t enough money to go around for workers. The industry needs to be permanently subsidized.

Yeah, because daycare has to be a highly regulated industry and the liability is just enormous. It's really hard to see how it can actually be made more affordable. And subsidizing daycare isn't even necessarily a good idea because the economic benefit of another parent working often isn't more than the cost of the subsidy.

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and the shareholders profits and the CEO's compensation package - don't forget those!