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Opinion | Michigan’s economy needs greater state support for childcare and preschool

Bridge Michigan
Guest Commentary
Opinion | Michigan’s economy needs greater state support for childcare and preschool

To help Michigan’s economic recovery, the early care and education sector urgently needs state support. This sector supports our state’s economy both by helping parents work, and by getting our children off to a good start.

Greater availability of full-time childcare and preschool increases the labor force participation of mothers with young children by over 15 percent. High-quality preschool increases the likelihood that a child will enroll in college by over 8 percent.

Timothy Bartik, Scott Nykaza
Timothy Bartik is a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo. Scott Nykaza is the chief executive officer at Kalsec Inc., a food manufacturer founded and headquartered in Kalamazoo. (Courtesy photos)

The pandemic has stressed Michigan’s system of early care and education. Revenues declined due to social distancing rules and parental reluctance to return children to care. Many childcare and preschool programs permanently closed, while others accumulated debt.

Furthermore, low worker pay has long been a problem, but has now become an acute crisis. Michigan’s ratio of pre-K teachers’ pay to kindergarten teachers’ pay is next to last among US states, at 59 percent in Michigan, versus an 88 percent average in the nation.

With workers concerned about health risks of in-person, close-contact work, childcare and preschools are having problems attracting and retaining staff. Without adequate staffing, many childcare programs and preschools may be unable to meet the needs of an expanding economy. Staff turnover threatens the quality of our early care and education system.

For Michigan to have a full economic recovery, the state must stabilize and expand the early care and education sector. We must prevent childcare and preschool programs from going bankrupt or contracting, and enable providers to hire the staff needed to expand.

Stabilizing the childcare and preschool sector requires three steps: (1) appropriating federal funds given to Michigan for child care; (2) helping childcare providers qualify for the state’s prekindergarten program; and (3) providing bonuses to recruit and retain childcare and preschool teachers.  

The state should start by appropriating $1.4 billion in federal funding sitting in Lansing that is dedicated to the childcare sector. Some of this funding was appropriated by Congress in December and still has not gotten to Michigan providers. The funding includes a $700 million Child Care Stabilization Fund, intended for quick release.

The state should increase access of private providers to Michigan’s Great Start Readiness Program (GSRP), the state’s prekindergarten program. Many childcare providers rely on preschool funding to cross-subsidize more expensive infant care. Michigan’s school aid bill included $168 million that increased per-student funding for the GSRP. If the state funds technical assistance, more community-based providers can access these funds and provide both quality childcare and preschool.

The state’s plan must also address the workforce. According to the Michigan Early Care and Education Workforce Study, over 90 percent of workers in this sector are not paid enough to meet the threshold for a living wage for a family with one adult and one child.

The long-run solution is to provide sufficient funding so that childcare programs and preschools can pay decent wages. But in the short run, federally-provided stimulus funds can be used to provide hiring and retention bonuses to childcare and preschool teachers over the next few critical years. This will allow programs to expand quickly, supporting Michigan’s economic recovery.

The childcare and preschool sector is a critical part of Michigan’s business community. It is time that the state met the childcare needs of working families and the business community while promoting stronger educational outcomes for the next generation of workers. If we quickly provide the funding needed to stabilize the sector and enable it to hire staff for expansion, we will quicken the pace and magnitude of Michigan’s economic recovery.  

Bridge welcomes guest columns from a diverse range of people on issues relating to Michigan and its future. The views and assertions of these writers do not necessarily reflect those of Bridge or The Center for Michigan. Bridge does not endorse any individual guest commentary submission. If you are interested in submitting a guest commentary, please contact Ron French. Click here for details and submission guidelines.

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