Well-known economist Nancy Folbre raised an important issue about the business community and early childhood programs in her recent contribution to the New York Times’ “Economix” blog. The issue is: why isn’t there more active business support for early childhood programs? At this time of looming budget deficits at all levels of government, such support is needed now more than ever.
Folbre acknowledges the arguments made by Nobel-prize-winning economist James Heckman, in my book Investing in Kids, and by the Chamber of Commerce and other business organizations, that high-quality early childhood programs produce high economic returns. But as she points out, early childhood programs have recently faced a wide variety of threats, including proposed cuts to Head Start, and actual and proposed budget cuts to early childhood programs in many states. She then asks, “Why…hasn’t the business community thrown more of its political weight behind increased public support for early childhood education?”
Her explanation is that for some major businesses, perhaps the economic development arguments for early childhood programs are less powerful. Some globally-oriented businesses may feel that they can easily get skilled labor for a low cost in non-U.S. locations. Within the U.S., in the short-term there may be less business concern about the supply of skilled labor because of our current high unemployment rate. As a result, some interests in the business community may not place a high priority on expanding high-quality early childhood programs, compared to pushing for lower business taxes.
Folbre is quite right to point out the mixed interests of the business community. But we can view the glass as either half-full or half-empty. In addition to global businesses, there are many local businesses that are more dependent on a U.S. labor supply. Furthermore, there are many locally-oriented businesses interested in the potential short-run boost to local property values provided by high-quality early childhood programs. Finally, while some businesses have a short-term perspective, others have a more long-term perspective. The U.S. economy will not always have such an excess supply of labor.
The point of making a strong business case for early childhood programs is not to expect all business interests to provide strong support for these programs. The point is to attract significant business support. This support is more likely to come from businesses with a long-term perspective. This support is more likely to come from businesses, including global businesses, that expect in the long-run to have some considerable portion of their labor force in the U.S. Finally, this support is more likely to come from businesses that have interests in local development and local property values.
I think it is actually easier to attract strong business support for early childhood programs at the local level. At the local level, it is easier to make the connections clear between expanding early childhood programs, and increasing local economic development both in the short-run and long-run. For example, you can see this in one of the links Folbre provides, which highlights how some Chamber of Commerce groups have supported early childhood programs at the state and local level.
It may also be easier to attract stronger business support for early childhood programs as the U.S. labor market recovers. We already have some economists and business leaders complaining about “structural unemployment”, that is that there are jobs available that lack sufficient qualified applicants. Although I think such concerns are currently over-stated, the increasing skill requirements of the U.S. economy in the long-term are likely to put more pressure on policymakers to increase the quality of the U.S. labor supply. Early childhood programs are a cost-effective way to increase labor supply quality.
Professor Folbre wrote the 2010 book “Valuing Children: Rethinking the Economics of the Family”. This excellent book provides a broad perspective on why investments in children provide significant social benefits that are frequently undervalued.