early childhood development: it’s good for business, it’s good for the state
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EARLY CHILDHOOD DEVELOPMENT: IT’S GOOD FOR BUSINESS, IT’S GOOD FOR THE STATE. WISCONSIN HEAD START ASSOCIATION. Dennis K. Winters Chief, Office of Economic Advisors Wisconsin Department of Workforce Development. February 3, 2014. WHAT I WILL DO TODAY. - PowerPoint PPT PresentationTRANSCRIPT
February 3, 2014
ECD:IT’S GOOD FOR
BUSINESS, IT’S GOOD FOR
THE STATE
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EARLY CHILDHOOD DEVELOPMENT:IT’S GOOD FOR BUSINESS,IT’S GOOD FOR THE STATE
Dennis K. WintersChief, Office of Economic AdvisorsWisconsin Department of Workforce Development
WISCONSIN HEAD START ASSOCIATION
February 3, 2014
February 3, 2014
ECD:IT’S GOOD FOR
BUSINESS, IT’S GOOD FOR
THE STATE
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February 3, 2014
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BUSINESS, IT’S GOOD FOR
THE STATE
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Tell you why early education is important
Give you the ‘speak’
Suggest some strategies
WHAT I WILL DO TODAY
February 3, 2014
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WHAT ARE BUSINESSESTOP CONCERNS
Tax burden Skilled workforce Regulations
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STATE BUDGETCOMMITMENTS
Of state GPR of $30.6 billion (FY 2013-15):
K-12 Aides – $10.1B; 33.1% Corrections – $2.1 B; 6.7% UW System – $2.2 B; 7.3% Medicaid – $4.6 B; 15.1% Shared revenue – $1.8 B; 5.9%
Source: Wisconsin Taxpayers Alliance, Window on the Wisconsin State Budget, Volume 81, Number 8, August 2013
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WISCONSIN’S WORKFORCE GROWTHBECOMES FLAT
Source: Bureau of Labor Statistics, OEA
Wisconsin Population and Labor Force
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1960 1970 1980 1990 2000 2010 2020 2030
( x 1
000
)
POPULATION
CIVILIAN LABOR FORCE
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RAMIFICATIONS OF WORKFORCE TRENDS ARE:
Unalterable – demographics and migration patterns do not change quickly;
Potentially devastating – without sufficient productivity gains the state’s economy will stagnate;
Necessitating a focus on talent – large investments in education and training are needed.
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"The days are over when you could walk into a paper mill with a high school diploma and run one of the machines."
– Patrick Schillinger, Wisconsin Paper Council President, Center will teach paper-industry technology, Milwaukee Journal Sentinel, JS Online, October 21, 2004.
NEW ECONOMY HIGHER SKILL SET REQUIRED
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NEW ECONOMYTALENT BASED
Carly Forina, former CEO HP –
Don’t show me your highway interchange or TIF district, show me the number of college graduates
February 3, 2014
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NEW ECONOMYSCARCITY OF SKILLED WORKERS
Former Federal Reserve Chairman Alan Greenspan voiced his concern about a growing earnings gap between highly skilled and unskilled workers.
"It's a problem caused basically by our skill mix not keeping up with the technology that our capital stock requires," the Republican Fed chairman said. . . .
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Disparities in education and training is “likely the single greatest source of the long-term increase in
inequality.”
Thus, “policies that boost our national investment in education and training can help reduce
inequality while expanding economic
opportunity,” he said."
– Ben Bernanke, Federal Reserve Board Chairman, speech to Omaha Chamber of Commerce, February 6, 2007.
NEW ECONOMYEDUCATION AND TRAINING REQUIRED
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Import the talent
Export the job
Grow the Talent here
THREE TALENT OPTIONSFOR BUSINESS
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WHY ISEARLY EDUCATION
IMPORTANT?
February 3, 2014
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Sensory-Deprived
Children who don’t play much or are rarely touched develop brains 20% to 30% smaller than normal for their age. Baylor College of Medicine
Normal vs. Sensory-deprived Brain of a
Three-Year-Old Child
NormalNormal Sensory - Deprived
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“By 5, it is possible to predict, with depressing accuracy, who will complete high school and college and who won't.”
– David Brooks, David Brooks: Schools and Skills
The New York Times; Editorial
WHAT THEY SAY
February 3, 2014
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Third Grade Reading Skills Learn to Read Read to Learn
WHY EARLY EDUCATION?AN EARLY FULCRUM
February 3, 2014
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ACHIEVEMENT GAPESTABILISHED EARLY
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ACHIEVEMENT GAPDEPENDENT ON THE MOTHER’S EDUCATION
Source: Prof. James Heckman, Nobel Laureate, University of Chicago
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POVERTY v. EDUCATIONUSE THE CORRECT POLICIES
Ed ≠ f (Poverty)
Poverty = f (Education)
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MEDIAN FAMILY INCOME BY EDUCATIONAL ATTAINMENT
Source: U.S. Census Bureau
Average Household Income by Educational Attainment (real 2008 $)
$31,
798
$49,
925
$63,
570
$104
,162
$35,
594
$52,
784
$58,
470
$80,
092
$0
$15,000
$30,000
$45,000
$60,000
$75,000
$90,000
$105,000
Less HS HS 1-3 Yrs College 4+ Yrs College
1978
2008
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WHAT IS THE COST?
NO, WHAT IS THE RETURN ON INVESTMENT
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“Investments in high-quality early education programs have the highest rate of return of any social investment.”
– Professor James Heckman University of Chicago
Nobel Laureate in Economics
WHAT THEY SAY
February 3, 2014
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“The best investment in economic development that government and the private sector can make is in the healthy development of children .”
– Art Rolnick Sr. Vice President (retired)
Federal Reserve Bank of Minneapolis
WHAT THEY SAY
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$15,
166
$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000
Costs
Benefits
Total return = $258,888; $17.07 per dollar invested: $12.90 to the public, $4.17 to participants
Welfare Education Earnings Taxes paid Crime
(Per participant in 2000 constant dollars discounted 3% annually)
Larry Schweinhart, Larry Schweinhart, High/Scope Educational Research Foundation, High/Scope Educational Research Foundation, www.highscope.orgwww.highscope.org
HUGE RETURN ON INVESTMENT HIGH/SCOPE PERRY PRESCHOOL
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THE EVIDENCE IS INHUGE RETURNS
• Perry Scope
• 17 : 1
• Chicago-Child Parent
• $7 to $1 total
• $4 to $1 public
• Abecedarian Educational Child Care
• $4 to $1 total
• Elmira Prenatal/Early Infancy Project
• $5 to $1 total
• $4 to $1 public
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BENEFITS ARE SHAREDACROSS SECTORS
Personal Success – 20% of gains• Higher Income
• Better Employment Attributes
• Better Health
Public Externalities – 80% of gains• Lower Crime
• Less Social Intervention
• Greater civil contributions
Business• More Skilled Workforce
• Higher Productivity
• Less Turnover
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• Net cost is > 1% of K-12 budget
• Budget surplus in 2050 > $1 billion
• Benefits exceed costs in 8 years
• Benefit/Cost ratio equals 3.69
WISCONSIN BUDGET IMPACTSBENEFICIAL AND PERPETUAL
Robert Lynch, Enriching Children, Enriching the Nation, Economic Policy Institute, 2007.
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STATE IMPACTSBENEFICIAL AND PERPETUAL
Benefits vs. Costs
2007 2012 2017 2022 2027 2032 2037 2042 2047
$Yearly Budget Costs
Yearly budget benefits
Graph representative of data portrayed in Enriching Children, Enriching the Nation, Robert Lynch, Economic Policy Institute, 2007.
• Cost bump in 2021 due to higher post-secondary enrollments
• Benefits rise faster after 2021 due to higher earnings of graduates
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NEW ECONOMIC DEVELOPMENT MODELUSING THE RIGHT TOOLS
• Traditional economic development tools produce a zero public return or worse.– See A. Rolnick, Federal Reserve Bank of Minneapolis
• Returns to high-quality early-childhood initiatives produce huge returns.−Perry Preschool 40-year study reports $17-to-$1 total
and $13-to-$1 public benefit-cost ratios.
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WHAT MORE DO YOU NEED?THE QUESTIONS HAVE BEEN ANSWERED
What is the greatest job need? Skilled, creative, interactive occupations
What are the returns?17: 1 returns; 80% to the Public
Is it fiscally prudent? Relatively small cost, perpetual returns
What is your alternative investment? Not a new mall !
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STRANGEBEDFELLOWS
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WAIT, WHAT, WHY ARETHESE GROUPS ALIGNED
Business Law Enforcement Corrections Military Health Care
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“Investing in the earliest years of life is the first step in preparing a workforce that can meet the demands of the 21st century.”
– Ann Cramer, Director, Americas
IBM
WHAT THEY SAY
February 3, 2014
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“Early childhood education has a tremendous impact on the national economic security.”
– U.S. Chamber of Commerce
WHAT THEY SAY
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“We appreciate the opportunity to apply for funding in support of our ongoing efforts to increase engagement of the Wisconsin business community in this important initiative.
– Jim Haney President Emeritus, WMC
Letter in support of national organization support of Business Leader Summit on Early Childhood Investment
WHAT THEY SAY
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“Early Childhood Development is recognized within the business community for the significant contributions it makes to educational attainment leading to a more productive workforce and to the resulting long-term economic impact of these early investments.”
– National Association of Manufacturers
WHAT THEY SAY
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"Here in Wisconsin, we need to invest in early learning. Too many kids come to school unprepared to learn, which leads to higher dropout rates, a lagging workforce and a damaged economy. We can invest now, or pay later."
– Tim Sheehy, President
Metropolitan Milwaukee Association of Commerce
WHAT THEY SAY
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REGIONAL & LOCAL
FOCUS
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LOCAL FOCUSAND APPROACH
Respond to community challenges Closer relationships Keep efforts and resources in the
community Reticence to give money to far-
away, non-accountable entities Familiarity
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“Investments in high quality early childhood programs and services can be a powerful tool for spurring economic development and equal opportunity.”
– Jeff Joerres, Chairman & CEO, Manpower, Inc.– Charles E. M. Kolb, President, CED
In invitation letter to Milwaukee business leaders to attend an information meeting at Manpower headquarters,
March 3, 2009
WHAT THEY SAY
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“The best and most effective way to increase the quality of our workforce and lessen the tax burden is to invest in quality early childhood development. The sooner and the earlier, the better.”
– Dennis Winters Chief, Office of Economic Advisors
Wisconsin Department of Workforce Development
WHAT THEY SAY
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Questions ?
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Dennis Winters
Phone: 608-267-3262
Email: [email protected]
Website: www.dwd.wisconsin.gov
OEA website: www.dwd.wisconsin.gov/oea
CONTACT INFORMATION