February 9th, 2011

PA Business Leaders Tout Economic Benefits of State Early Education Investments

Click here to read the report, “Strengthening Pennsylvania Businesses through Investments in Early Care and Education.”
For Immediate Release: February 9, 2011
Media Contact: Mike Kiernan
Cell: 202-412-7579, Desk: 202-464-7016
E-Mail: mkiernan@americasedge.org

State early care and education programs provide almost $1 billion in economic activity for the Commonwealth, employ over 45,000 workers and improves future workforce.

HARRISBURG, PA – Pennsylvania business leaders were joined by a bi-partisan group of state legislators in the Capitol Rotunda today to show how the state’s investments in early care and education are providing a surprisingly big boost to local business sales and playing an important role in helping Pennsylvania recover from the current economic recession.

Participating in the news conference were Lloyd Lamm, Regional Banking Executive for First National Bank of Pennsylvania; Philip Peterson, Senior Vice President for Aon Hewitt – a leading global provider of human resources consulting; James Fish, Jr., Area Vice President (PA and WV) for Waste Management, Inc; Peter Danchak, Northeast PA Regional President for PNC Bank; Maria Culp, President & CEO of the Central Pennsylvania Chamber of Commerce; Michael Smeltzer, Executive Director of the Manufacturers’ Association of South Central PA; State Senator Patrick Browne (R-Lehigh) and State Representative Phyllis Mundy (D-Luzerne).

The business leaders cited a new report by the national business group America’s Edge showing that state investments in early care and education are generating immediate local business sales, creating jobs and also aiding in long-term economic growth and security.

They said that in these difficult economic times, a determination must be made on which investments will deliver immediate relief and grow our economy for the future. The group touted that the economic boost from the early care and education sector outperforms investments in other major sectors often associated with economic development such as construction, manufacturing, or transportation.

“Investments in quality early care and education produce real and proven economic returns on those investments for Pennsylvania communities, creating an immediate infusion of dollars that will benefit local businesses and create jobs,” said Philip Peterson.

The report shows that for every $1 invested in early care and education in Pennsylvania, $2.06 is generated in total spending within the state. This strong economic boost for local businesses is higher than what investments in other major sectors would generate, such as construction ($1.91), retail trade ($1.73), manufacturing ($1.73), transportation ($1.92), and utilities ($1.54.)

Mr. Peterson noted that Pennsylvania’s early care and education sector employs more than 45,000 people in the state, including administrators, teachers, and child care workers. When these teachers and child care employees are paid and when early learning centers purchase the supplies and services they need to operate, that increases sales of local Main Street businesses, providing an economic boost to that community.

America’s Edge calculates that Pennsylvania currently spends $448 million on state-funded quality early learning programs, which in turn generates an additional $475 million in economic activity in the form of sales of local goods and services from Pennsylvania businesses. This adds up to a total of $923 million in economic activity for the Commonwealth.

“The findings of this report make it clear that continuing investments in early care and education is an essential strategy for continuing Pennsylvania’s economic recovery during these difficult times,” said Lloyd Lamm. “These investments are providing an immediate economic boost to local businesses in every economic sector, helping them stay in business and generating more buying power for consumers.”

The report also cautions that budget cuts to state early care and education programs – like Pre-K Counts, Head Start, Keystone Stars, high quality childcare and others – would reduce sales from Pennsylvania businesses and detract from state’s economy, with a total of $2 lost for every $1 cut.    The business leaders agreed that this type of loss to Pennsylvania’s businesses is not something we can afford to do as the Commonwealth’s economy struggles to recover.

“With limited funds available to help businesses and our economy get back on track, few investments make as much sense for our children’s future and local businesses’ balance sheets as investments in high-quality early care and education,” said Peter Danchak.

Also included in the report is past research documenting the compelling long-term economic impact of quality early learning programs. According to the report, the 21st century global marketplace will require businesses to hire employees with advanced hard skills in math, reading and writing and refined soft skills like communication, collaboration and critical thinking. Unfortunately, the U.S. Department of Education is cautioning that 60 percent of new jobs in the 21st century will require skills that only 20 percent of the American workforce has.

James Fish cited research in the report that shows children who participate in quality early learning programs: do better in math and reading; develop the social and emotional skills that transform into those important soft skills; have higher graduation rates; enter the workforce with higher skill levels; and earn more as adults.

“The four-year-olds of today are the workforce of tomorrow,” said Mr. Fish. “Every child who enters the workforce with the skills American businesses need will help our nation stay competitive in an increasingly challenging global marketplace.”

As the economy recovers over the next several years, America’s Edge recommends an expansion of quality early care and education programs to serve more children in Pennsylvania who qualify. The report notes that if all qualifying Pennsylvania children were given access to quality early care and education services at a cost of an additional $2.2 billion, the state would generate $4.6 billion in total new spending for Pennsylvania businesses and up to 75,000 new jobs.