Strengthening New York Businesses Through Investments in Early Care and Education

Publication Date: March 2010

Publisher: America's Edge

Author(s): Susan L. Gates; Stephanie Schaefer; Mike Kiernan

Research Area: Business; Economics; Education; Government

Keywords: prekindergarten; early education; New York; business

Type: Report

Coverage: New York

Abstract:

New York business leaders recognize that the key to jump-starting the state’s economy and keeping struggling companies in business is to generate additional sales of local goods and services, while also creating new jobs. That is why, after taking a hard look at the research and calculating proven returns on investment, New York business leaders are calling on the governor and state legislators to invest in early care and education. This report documents that investments in early learning provide a significant, immediate economic boost for local businesses and help build stronger communities over the long term.
Fully investing in early care and education would generate billions of dollars in sales of good and services for New York businesses and create tens of thousands of jobs in the state. In fact, investments in quality early learning generate as much or more new spending for local businesses as investments in eight other major economic sectors. For every $1 invested in early care and education in New York, $1.86 is generated in additional spending within the state. This strong economic boost for local businesses is as high or higher than investments in other major sectors such as construction, retail trade, manufacturing, transportation and utilities.
Expanding early care and education should be a critical component of New York’s economic recovery. If all New York children were given access to quality early care and education at a cost of an additional $3.6 billion, the state would generate $6.7 billion in total new spending in New York businesses. And nearly all of these dollars generated in New York would stay in New York – helping local businesses prosper while also creating up to 80,000 new jobs, including 17,000 jobs outside the early learning sector.
Such an investment will also save New York businesses money every day through reduced absenteeism and turnover. The average working parent in America misses five to nine days of work per year because of child care problems. This costs U.S. businesses $3 billion a year in lost productivity. Research confirms that if parents have quality early care and education available in their communities, not only will absenteeism and turnover go down, but productivity will also go up – immediately improving businesses’ bottom lines.
Yet another strategic reason for this investment is that access to quality early care and education will increase the ability of New York businesses to attract skilled employees. Quality programs for our youngest children are needed for the same reasons communities strive to have a strong K-12 education system to attract skilled workers and new businesses. The U.S. Department of Education has warned that 60 percent of new jobs in the 21st century will require skills possessed by only 20 percent of the current workforce. As our economy begins to turn around, New York businesses need the right resources to attract and retain the best workers. To attract the best employees, communities must be able to ensure that quality early learning is available for their children.
Finally, such an investment will establish a foundation for sustained economic growth because quality early learning is key to ensuring that future employees have the 21st century skills New York businesses need. To remain competitive in a global marketplace, businesses need communicators, collaborators and critical thinkers. Research confirms that quality early learning is the crucial first step in the development of those skills. And research shows that the return on investment is impressive: Studies of high-quality early education programs for at-risk children have shown that quality programs can save as much as $16 for every dollar invested.
The bottom line: With limited funds available to help businesses and our economy get back and stay on track, few investments make as much sense for New York businesses’ balance sheets as do expanded investments in high-quality early care and education.