1 child care is not child’s play the economic impact of the child care and after-school industry...
TRANSCRIPT
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Child Care is not Child’s PlayThe Economic Impact of the Child Care
and After-School Industry in Washington
Jill Nishi, DirectorOffice of Economic DevelopmentCity of Seattle
Report prepared by the Northwest Finance Circle
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Overview
Economic impact of the child care industry Benefits of child care Market inefficiencies Recommendations
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Defining child care
Early childhood education: education & care of children birth to 5
– Licensed child care centers & homes– Preschool programs, Head Start, ECEAP
School-age care: licensed & unlicensed programs for children ages 5-12
– Before & after school– Summer & school breaks
Licensed care: meets state standards for health & safety Unlicensed care: programs not requiring a license
– Part-time preschools– Family, friend & neighbor care– Arts & sports programs, tutoring, day camps, drop-in clubs
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Washington’s child care industry
Generates $836 million in revenue Creates more than 30,600 jobs Contributes to the infrastructure necessary to
support a strong economy Provides long-term benefits
– Prepares children to succeed in school– Sets foundation for a skilled productive work force
of the future
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Child care: generating revenue and creating jobs
The child care industry contributes directly to our state and local
economies. Over 9,000 licensed facilities create jobs and earn gross
annual revenues of $836 million
Licensed child care
businesses
Employees Annual Wages
Washington 9,012 30,600 $566 M
King County 2,041 8,537 $175 M
Seattle 620 2,491 $ 50 M
Note: 2002 data
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Child care: Washington industry employment comparison
Manufacturing—aircraft and parts
76,874
Child Care 56,900Licensed: 30,600
Unlicensed: 26,300
Agriculture—crops
51,387
Apparel Retail 24,204
Hotel 23,791
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Child care: generating revenue and creating jobs
The child care industry contributes to the economy through its spending in other sectors.
Multiplier effect of child care labor income in
Washington (2000)
– Licensed child care employees earn $566 M in wages– These employees’ spending generates $1.64 B in other
kinds of sales– Resulting in $65 M in taxes (sales and B&O)
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Child care: generating revenue and creating jobs
2003
State of Washington
invested $50M in child care
Yielding a federal
government match of $350M
State child care investments brought $7 to Washington for
every $1 invested
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Consumer demand for child care
56% of employed parents use child care Working parents use an average of 26 hours
a week for children birth to five; 16 hours a week for school-agers
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Economic impact of working parents’ wages
Parent Impact:
$13 B in wages
Average annual household earnings in
Washington:
$51,974
Families with at least one
working parent:
250,000
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Child care: increasing worker productivity
By making employment possible for parents By helping working parents to be more
productive By supporting businesses to attract and
retain parents in low-and moderate-wage jobs.
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Child care: increasing worker productivity
Stable child care reduces employee absenteeism and improves productivity Child care problems cause working
parents to miss days at work, arrive late, leave early or use work time to deal with these problems.
Equivalent of 6 work days per year lost due to child care problems
Cost to employers: $112.5 M/year
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Child care: supporting business
Child care subsidies help employers– Child care subsidies help low-wage parents afford
to work. 8% of our state’s working parents receive child care subsidies.
– The City of Seattle helps over 600 families afford child care so they can work.
– Over 1/3 of City of Seattle subsidies support employees working in retail and medical service sectors.
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High quality child care: a high return on investment
Studies show: High linkage between quality early learning and
school readiness and school success Every $1 invested in high quality early education
yields $7 in savings to the public Children in high quality early learning programs are
more likely to:– Graduate from high school– Attend college– Own their own home
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Child care: a failed market good
The child care industry can’t offer a high quality “product” at a price most families can afford.
Public investment has not bridged the gap between what families can afford and what a high-quality child care product costs.
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Child care: a failed market good
Because public investment is low, the cost to families is high
The average family of 4 spends more than 20% of their budget on child care. – In King County, child care consumes over 25% of
the average family budget
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Child care: a failed market good
Early education can’t be delivered effectively without adequate resources—employers, working families and children are not getting their needs met
The child care industry needs external supports from the public and private sectors
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Summary
The child care sector is an important source of jobs and revenue generation
High demand for child care exists throughout the state Child care improves worker productivity in the short term In the long term, high quality child care is an investment
in our future workforce High quality child care requires a higher level of private
and public investment
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A call to action: Workforce development and business assistance
Recommendation #1– Ensure child care sector workforce training needs
are met– Provide small business assistance in conjunction
with child care resource and referral programs to help child care businesses be competitive, meet regulatory standards and be responsive to consumers
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A call to action: Sustainable financing
Recommendation #2– Raise state subsidy reimbursement rates to the 75th
percentile of the market rates.– Offer cash incentives, such as tiered reimbursements and
bonuses– Include funding for early learning and after school services
in the State of Washington’s basic education formula– Extend current B&O tax exemptions to include those
licensed child care providers serving children up to age 12– Offer tax incentives for private developers to incorporate
space for child care in new housing or business developments; or to offer free or below-market-value rent to child care programs
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A call to action: Equity and access
Recommendation #3– Expand eligibility for state child care subsidies to
300% of the federal poverty level– Foster public/private partnerships to match
government subsidy dollars with private sector contributions
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A call to action: Consumer education
Expand consumer education and accountability measures.– Quality rating systems (such as Educare)– Expand consumer information and referral– Institute accountability measures, such as
developmental assessments of children to ensure children are thriving
– Periodic consumer satisfaction surveys
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Conclusion
The child care industry is part of the fabric of our economic infrastructure. If we are to reap the benefits this industry can produce, we need to:– Expand public and private investment– Work in partnership with state, regional and local
economic development organizations to strengthen the industry and maximize its contribution to our state's economy.