The Economic Impact of the Child Care Industry in Minnesota By Terry Vasquez, Employer Services Coor

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The Economic Impact of the Child Care Industry in
MinnesotaBy Terry Vasquez, Employer Services
Coordinator
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9 states have completed studies

• CALIFORNIA
• FLORIDA
• KANSAS
• MAINE
• MINNESOTA
• MISSISSIPPI
• NEW YORK
• RHODE ISLAND
• VERMONT

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Reasons to conduct an Economic Impact Report

• Re-frame the early care and education issue
• Engage the business, financial, and governmental
  sectors in a discussion about generating funds
  and policies that support the licensed child care
  industry
• Increase the capacity of local child care leaders
  to take on economic development issues.

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Resources for producing Economic Impact Reports

• National Economic Development and Law Center
  (NEDLC) www.nedlc.org contact Jen Wohl
• Cornell University, Mildred Warner, PhD
• www.economicdevelopment.cce.cornell.edu

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Minnesota Report-Background

• The report was written by NEDLC with a grant from
  the Kellogg Foundation
• CCRR Network recruited an advisory committee,
  provided data, gave in-kind staff support,
  covered printing and roll-out costs
• Advisory committee met monthly to review each
  section of the report and provide input,
  including methodology and local examples

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• The Child Care industry is integral to the
  vitality of Minnesotas economy

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KEY FINDINGS

• The Child Care Industry
• Enables businesses to recruit employees, reduce
  turnover, and absenteeism, and increase
  productivity
• Ensures a strong economy in the future
• Is a significant income-generating, job-creating
  industry in its own right

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962 Million

• The child care industry is 77 the size of the
  corn industry in Minnesota, for which the state
  ranks third in the nation based on crop
  production.

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MINNESOTA CHILD CARE GROSS RECEIPTS
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Direct Employment

• The child care industry directly supports more
  than 28,000 full-time equivalent jobs
• There are more people working in the child care
  industry in Minnesota than work at the U of M, NW
  Airlines, or Hormel Foods Corporation

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MINNESOTA CHILD CARE DIRECT EMPLOYMENT
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Child Care And Business

• A strong child care infrastructure
• Cultivates the future workforce
• Increases employee retention and labor force
  participation, lowering turnover costs and
  ensuring a healthy labor market
• Enhances recruitment of new employees and
  attracts a skilled workforce to the area
• Reduces absenteeism in existing employees,
  increasing productivity

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Cultivating the Future Workforce

• Quality child care and early education helps to
  build a skilled workforce for the future
• Employment projections suggest that business
  investments in the child care and early education
  industry are particularly necessary to build the
  pool of skilled employees for the future

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Increasing Employee Retention

• Almost 25 of MN parents with young children
  report that problems with child care have
  prevented them from keeping or accepting the kind
  of job they want
• Retention of existing employees is critical to a
  companys economic success
• Using child care benefits to help reduce turnover
  has a direct impact on an organizations bottom
  line.

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Enhancing Recruitment

• Accessible, quality, affordable child care
  on-site or in the community is a strong
  recruitment tool.
• The availability of child care is necessary to
  attract employees to the area who do not have
  nearby family and friends

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Reducing Absenteeism

• Absenteeism in 2002 cost an average of 60,000
  per year for small U.S. companies and more than
  3.6 million per year for large U.S. companies
• 22.6 of MN parents indicated that they have been
  late for work, left work early, or missed an
  entire day of work in the last 6 months due to
  child care problems

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Business Strategies for Child Care

• Become a partner in long-term planning
• Incorporate child care into business and
  residential development
• Provide child care benefits

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Child Care and Economic Development

• Investing in quality child care is a win-win
  situation
• Government wins
• Businesses win
• Banks win
• Communities win
• Children win

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Maintaining Labor Force Participation

• Child care enables parents to participate in the
  labor force
• Almost 1/3 of the total MN workforce are parents
  with children under the age of 18
• 15 of the workforce are parents with children
  under the age of six

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Enabling Workforce Development

• High-quality child care programs help to improve
  the education attainment and income status of
  parents

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Cultivating the Future Workforce

• K teachers in MN report that 13 of children are
  not yet proficient in a majority of mathematical
  thinking indicators, and 18 are not yet
  proficient in the majority of indicators of
  language and literacy development

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Reducing Future Public Spending

• The economic benefits of targeted early education
  intervention programs
• Chicago CPC Study 7,000/per child yields
  48,000 lifetime benefit to society
• Perry Pre-School Project 12,000/per child
  yields 108,000 lifetime benefit to society
• Abecedarian Project 36,000/per child yields
  136,000 lifetime benefit to society

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Economic Development Strategies for Child Care

• Provide options for financing the construction
  and renovation of high-quality facilities
• Use economic development resources and planning
  to incorporate child care into future development
• Alter land use regulations to provide incentives
  for child care development

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Economic Development Strategies for Child Care

• Fund participation of low-income children in
  high-quality child care programs
• Improve business management skills of child care
  professionals
• Support a stable and skilled child care workforce

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Conclusion and Policy Recommendations

• Incorporate child care into economic development
• Involve business in the child care industry
• Enhance the quality of the child care industry
• Build a coordinated early education and care
  system

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Next steps for the EIR

• Media
• CCRR support
• Advisory Committee support
• Hearings and conferences
• Integration into existing projects
• Public policy uses

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FINAL THOUGHTS

• Messages
• Lessons Learned
• Ideas from you
• Discussion

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THANK YOU!

• CONTACT INFORMATION
• Ann McCully
• MN Child Care Resource and Referral Network
• 380 Lafayette Road, Suite 103
• St. Paul, MN 55107
• [phone] x115
• annm_at_mnchildcare.org