Investing in Kids is Economic Development Young Children Priority One and Partnership for America’s Economic Success Robert Dugger, Advisory Board Chair,

Investing in Kids is Economic Development

Young Children Priority One and

Partnership for America’s Economic Success

Investing in Kids is Economic Development

Young Children Priority One and

Partnership for America’s Economic Success

Robert Dugger, Advisory Board Chair, PAESSara Watson, Director, PAES/Senior Officer, Pew Center on

the StatesWil Blechman, Past President, Kiwanis International

[email protected] / 202-552-2134

Why should business care?

Youth human capital is one of the highest-return economic development strategy there is. The economic returns for pre-k for disadvantaged kids are over 10% per year..! (Minneapolis Fed)

Youth human capital sector is big..! And if we don’t raise and educate kids right, it really doesn’t matter what else we do. (Invest in Kids Working Group)

If we want it done right, business has to be involved to make sure the Telluride Principles are followed. (Telluride Summit)

Painful facts

Intensifying global competition and steadily growing fiscal imbalances mean we have to focus on the future, the next generation and our kids have to do well.

20% of workers are functionally illiterate; we need children to become adults who are book-smart, team-capable and job-ready.

Many (not all) traits that make good employees, neighbors and citizens begin in the first 5 years of life. Infant brain forms 700 neural connections per second, reaching 85% of its adult weight in the first 5 years.

Bottom line: Need policy change -- in addition to great actions by individuals and companies. Business has to be involved..!

Partnership for America’s Economic Success• A collaboration of individual business leaders, business

organizations, economists, funders and policy activists. 13 funders, including Pew.

• Goal: Make the life success of every child in America the top economic priority of the United States

• Strategies:Document economic benefits of proven investments in children

prenatal to fiveSupport business leaders as champions for effective early

childhood policies and use of evidence/ROI in decisionmakingBuild a network of business organizations to educate and

engage their members

• Managed by the Pew Center on the States

Telluride Principles

For all state and national policies and programs --

1. The first priority should be the lifetime success of every child.

2. Parents, families and other caregivers should be directly involved.

3. Resources should be allocated on the basis of best evidence and proven practices.

4. Projects should have quantified goals and be performance evaluated.

5. Projects should be scalable and make best use of private and public incentives.

Why we need business champions – the big squeeze

Total Mandatory Spending Will Exhaust All Federal Revenue Resources by 2024(Note: Tax expenditures are added back to federal revenue and shown

separately as an expense to clarify their size and significance)

0

5

10

15

20

25

30

35

1990 2000 2010 2020 2030 2040Calendar Years

Perc

en

tag

e o

f G

DP

0

5

10

15

20

25

30

35

Perc

en

tag

e o

f G

DP

Social Security

Medicare/Medicaid

National Debt Interest

Tax Expenditures

Federal Revenue Plus Tax Expenditures

Exhaustion Point

Other Mandatory Expenses

Source: Government Accountability Office, Long-Term Fiscal Simulation, January, 2008, alternative fiscal scenario, which assumes continuation of current policy. Other Mandatory spending, CBO March, 2008 baseline and 1.9% of GDP after 2018. Tax expenditures are assumed to be 8.0% of GDP throughout.

$0.09

-$5.8

$26.3

$647.1

-$100

$0

$100

$200

$300

$400

$500

$600

$700

1

Bill

ions

of $

2006

Increase in kids' education and

research

Increase in kids' education and research

+ work supports

Increase in kids' education and research

+ work supports+ social supports

Increase in total domestic spending

0.01% -0.9% 4.1%

Source: The Urban Institute, 2007. Authors' estimates and projections, based on the Budget of the U.S. Government FY 2008, its Appendix, Analytical Perspectives, and CBO's Budget and Economic Outlook, 2008-17.

Is the next generation’s success our top priority now?

How does Investment in Children Compare?(Measurements from 2006-2017)

Personal Saving Ratehas Declined

Big problem in the US – but not only the US

Source: GAO analysis of data from the Office of the Chief Actuary, Social Security Administration. Note: Percentage change is calculated as a centered 5-yr moving average of projections based on the intermediate assumptions of the 2008 Trustees Reports.

Source: GAO analysis of Bureau of Economic Analysis data.

0

1

2

3

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080

Percentage change (5-yr moving average)

Labor Force is Declining

Education: USA ranks 26th out of 32 countries on PISA 2006 Math scores

Why should business care?

Today’s Youngest Kids are Tomorrow’s Employees and Customers

Scan of three-year-old brain after severe neglect

Scan of normal three-year-old brain

If 50 first graders have problems reading, then 44 of them still have problems reading in fourth grade (Journal of Educational Psychology)

First Graders Fourth Graders

What do we already know?

Economic Returns for Disadvantaged Children (2002 dollars, 3% discount rate)

Cost

Benefits B/C

Perry Pre-K (3-4 year olds) $15,386 $262,642 17.1

Chicago Child Par. Ctr (3-4) $ 7,384 $ 74,981 10.1

Abecedarian (0-5) $35,864 $130,666 3.6

Nurse Family Prtnrshp. (0-2) $ 9,118 $ 26,298 2.9

Abecedarian : Academic Benefits

13%

51%

65%

49%

36%

67%

34%

31%

0% 10% 20% 30% 40% 50% 60% 70% 80%

4 Yr College

HS Graduation

Grade Repeater

Special Education

Program groupNo-program group

Barnett, W. S., & Masse, L. N. (2007). Early childhood program design and economic returns: Comparative benefit-cost analysis of the Abecedarian program and policy implications, Economics of Education Review, 26, 113-125; Campbell, F.A., Ramey, C.T., Pungello, E., Sparling, J., & Miller-Johnson, S. ( 2002). Early childhood education: Young adult outcomes from the Abecedarian Project. Applied Developmental Science, 6(1), 42-57.

Abecedarian (0-5 early care and parenting support)

Economic Impacts of Other Aspects of Early ChildhoodBirth Outcomes (Johnson, U. of CA and Schoeni, U. of MI)

• Being born low weight: ages you by 12 years in middle age, increases the odds of dropping out of high school by 5 percentage points, lowers achievement scores, lowers labor force participation by 5 percentage points, and reduces labor market earnings by 14%

Housing (Haveman, Wolfe and Spaulding, U. of WI)

• Moving at least 3 times between the ages of 4 and 7 is associated with a 19% decrease in high school graduation.

Family Income (Duncan, Northwestern University)

• Raising family income to 100-150% of poverty during ages 0-6 pays for itself, on average, in terms of the child’s earnings and use of benefits as an adult

Business Support for Pre-K and Early Childhood

Chambers of Commerce

• Maine Los Angeles Kansas City

• Memphis San Francisco Houston

• Nashville Oakland Brownsville, TX

• Richmond Fairfax, VA Calhoun County, AL

National Association of Manufacturers

2008 Public Policy Positions: “Access to high quality early education and learning opportunities is integral to helping today’s children prepare for the highly competitive, fast-paced global economy.”

Federal Reserve Banks: Chairman Bernanke, as well as leaders in Minneapolis, Richmond, Atlanta, Cleveland, San Francisco

Other Examples of Business Leadership

• Pennsylvania: Many leaders -- PNC CEO James Rohr and other PNC executives; Phil Peterson, Aon Consulting; members of Early Investment Commission

• Massachusetts: Strategies for Children campaign business leaders: Mara Aspinall, CEO of Genzyme Genetics; Ronald Sargeant, CEO of Staples; Richard Lord, CEO of Associated Industries of Mass.

• Louisiana: Blueprint LA, Louisiana Association of Business and Industry, Louisiana Industrial Development Executives Assn.

• Arizona: Ed and Nadine Basha, of Basha’s Grocery Stores, led successful fight for ballot initiative to fund 0-5 services

The message is getting through…

What business can do with help from YCPO and PAES

• Support YCPO programs • Connect with advocates to know what the state agenda is• Build early childhood into the state Kiwanis agenda • Collaborate with other clubs• Make your voice heard – Op-eds, letters to editors,

blogs, talk radio • Tell your colleagues – presentations at business events

on investments in children as an economic strategy

What business can do with help from YCPO and PAES

• Encourage business groups to make a public statement• Participate in media/public events• Invite early childhood businesses to join civic

organizations – they are part of the economy too• Talk to policymakers and candidates (on a nonpartisan

basis) – find out if any are Kiwanians• Attend or apply to join early childhood advisory bodies

to share business perspective• Pennsylvania example

PAES’ job is to make your job easier

• Support education of Kiwanis members through:National conference of business peers – Telluride Economic

Summit on Early Childhood Investment, Sept. 20-22National forum to train diverse audiences on engaging

business, early 2010Connect you to 17 state business leader summits sponsored

by PAESProvide speakers for eventsAdvocacy/communications tools on our website

• Many other ideas at www.PartnershipforSuccess.org – call on us

Bottom line

We are organizing a national movement to

engage business leaders as champions for

policy change to help young children become successful adults.

It’s not only the morally right thing to do, it’s the fiscally prudent thing to do.

We hope you will join us.