Presentation on theme: "Child Care is not Child’s Play The Economic Impact of the Child Care and After-School Industry in Washington Jill Nishi, Director Office of Economic Development."— Presentation transcript:
1 Child Care is not Child’s Play The Economic Impact of the Child Care and After-School Industry in WashingtonJill Nishi, DirectorOffice of Economic DevelopmentCity of SeattleReport prepared by the Northwest Finance Circle
2 Overview Economic impact of the child care industry Benefits of child careMarket inefficienciesRecommendations
3 Defining child careEarly childhood education: education & care of childrenbirth to 5Licensed child care centers & homesPreschool programs, Head Start, ECEAPSchool-age care: licensed & unlicensed programs for children ages 5-12Before & after schoolSummer & school breaksLicensed care: meets state standards for health & safetyUnlicensed care: programs not requiring a licensePart-time preschoolsFamily, friend & neighbor careArts & sports programs, tutoring, day camps, drop-in clubs
4 Washington’s child care industry Generates $836 million in revenueCreates more than 30,600 jobsContributes to the infrastructure necessary to support a strong economyProvides long-term benefitsPrepares children to succeed in schoolSets foundation for a skilled productive work force of the future
5 Child care: generating revenue and creating jobs The child care industry contributes directly to our state and localeconomies. Over 9,000 licensed facilities create jobs and earn grossannual revenues of $836 millionLicensed child care businessesEmployeesAnnual WagesWashington9,01230,600$566 MKing County2,0418,537$175 MSeattle6202,491$ 50 MNote: 2002 data
6 Child care: Washington industry employment comparison Manufacturing—aircraft and parts76,874Child Care56,900Licensed: 30,600Unlicensed: 26,300Agriculture—crops51,387Apparel Retail24,204Hotel23,791
7 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 inWashington (2000)Licensed child care employees earn $566 M in wagesThese employees’ spending generates $1.64 B in other kinds of salesResulting in $65 M in taxes (sales and B&O)
8 Child care: generating revenue and creating jobs 2003State of Washington invested $50M in child careYielding a federal government match of $350MState child care investments brought $7 to Washington for every $1 invested
9 Consumer demand for child care 56% of employed parents use child careWorking parents use an average of 26 hours a week for children birth to five; 16 hours a week for school-agers
10 Economic impact of working parents’ wages Average annual household earnings in Washington:$51,974Families with at least one working parent:250,000Parent Impact:$13 B in wages
11 Child care: increasing worker productivity By making employment possible for parentsBy helping working parents to be more productiveBy supporting businesses to attract and retain parents in low-and moderate-wage jobs.
12 Child care: increasing worker productivity Stable child care reduces employee absenteeism and improves productivityChild 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 problemsCost to employers: $112.5 M/year
13 Child care: supporting business Child care subsidies help employersChild 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.
14 High quality child care: a high return on investment Studies show:High linkage between quality early learning and school readiness and school successEvery $1 invested in high quality early education yields $7 in savings to the publicChildren in high quality early learning programs are more likely to:Graduate from high schoolAttend collegeOwn their own home
15 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.
16 Child care: a failed market good Because public investment is low, the cost to families is highThe 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
17 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 metThe child care industry needs external supports from the public and private sectors
18 SummaryThe child care sector is an important source of jobs and revenue generationHigh demand for child care exists throughout the stateChild care improves worker productivity in the short termIn the long term, high quality child care is an investment in our future workforceHigh quality child care requires a higher level of private and public investment
19 A call to action: Workforce development and business assistance Recommendation #1Ensure child care sector workforce training needs are metProvide 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
20 A call to action: Sustainable financing Recommendation #2Raise state subsidy reimbursement rates to the 75th percentile of the market rates.Offer cash incentives, such as tiered reimbursements and bonusesInclude funding for early learning and after school services in the State of Washington’s basic education formulaExtend current B&O tax exemptions to include those licensed child care providers serving children up to age 12Offer 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
21 A call to action: Equity and access Recommendation #3Expand eligibility for state child care subsidies to 300% of the federal poverty levelFoster public/private partnerships to match government subsidy dollars with private sector contributions
22 A call to action: Consumer education Expand consumer education and accountability measures.Quality rating systems (such as Educare)Expand consumer information and referralInstitute accountability measures, such as developmental assessments of children to ensure children are thrivingPeriodic consumer satisfaction surveys
23 ConclusionThe 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 investmentWork in partnership with state, regional and local economic development organizations to strengthen the industry and maximize its contribution to our state's economy.