What’s good for kids is good for business
Expanding pre-K education for disadvantaged children
isn’t just a social issue for business leaders —
it’s a smart economic investment.
By Robin Doussard
Ken Thrasher is a sharp businessman who has a surefire way to
save the state money, create a better workforce and get a great
return on an investment.
Give disadvantaged 3- and 4-year-olds a chance.
“These kids who don’t make it end up costing us
money,” says Thrasher, CEO of Portland-based compliance
company Compli and an education advocate for 30 years. Research
shows that the achievement gap between advantaged and
disadvantaged children already is entrenched before the first
day of kindergarten, and that closing that gap means increasing
access to high-quality early childhood education programs.
“If we don’t start right,” Thrasher says,
“it becomes a big problem.”
While the funding battles for K-12 grab the headlines,
Thrasher and dozens of other business and civic leaders from
around the
state are making the case that a critical economic development
issue is providing quality education for disadvantaged
pre-schoolers. This coalition, the Ready for School Campaign,
is preparing to ask the 2007 Legislature to fund an expansion
of the Oregon Head Start Pre-Kindergarten program, and
it’s basing its case on such hard-nosed business
fundamentals as cost savings and bottom-line returns.
“For years we’ve been talking about the moral
arguments and that hasn’t gotten us that far,” says
Swati Adarkar, executive director of the Children’s
Institute, a Portland research and action organization that is
leading the communication and research effort for the Ready for
School Campaign. “Now people are realizing it is an
economic development strategy.”
Source: Oregon Department of Education
|
Net annual state revenue per person by education level
|
|
High school dropout
|
-$8,460
|
High school graduate
|
-$5,934
|
|
Some college
|
-$1,343
|
|
College graduate
|
$8,250
|
|
Source: Oregon Department of Education
|
Oregon Department of Education estimates the cost would be $40
million over the first two years. To continue the program would
cost $27 million per year. Ready for School’s Thrasher
says that funding options are being analyzed and no proposal
has been
recommended yet.
Richard Alexander, the founder of window-maker Viking
Industries and a member of the Ready for School steering
committee, says he believes quality pre-K programs are
“the most effective and best economic development plan
you can have.”
“Business is attuned to this issue because they see it
as an economic issue as well as a social issue,”
Alexander says. “Funding early education is right for the
kids and it’s right for the state. It reduces crime,
improves the workforce and increases the tax base. We’re
going to have to convince everyone that this is a very, very
good investment with a high rate of return. We can’t
afford not to do this.”
WHAT’S THE ECONOMIC IMPACT of having 40% of
Oregon’s disadvantaged children go without early
education? The National Institute for Early Education Research
estimates it costs society about $100,000 for every child who
grows up in poverty and without access to at least two years of
early schooling. These costs are from lost earnings, crime and
social service needs. In Oregon, that means the future societal
cost of its 6,400 disadvantaged children who currently have no
access to early education would be $646 million.
How early investment saves future costs was examined in
Michigan’s landmark Perry Preschool Study, which tracked
over 40 years low-income children who were given two years of
early education. It found that they were not only better
prepared for school but were better citizens. They were more
likely to hold a job and were four times less likely to have
any criminal involvement as adults. The study found that for
every $1 invested, there was a savings to society of nearly
$13.
Also, the Perry study found that for an investment of $15,166
per student over two years there was an economic return to
society of more than $195,000. The vast majority of the benefit
came from crime-cost savings.
Nobel Prize-winning economist James Heckman of the University
of Chicago has written that preschool and other interventions
for disadvantaged children “raise the quality of the
workforce, enhance the productivity of schools and reduce
crime, teen pregnancy and welfare dependency. They raise
earnings and promote social attachment. Focusing solely on
earnings gains, returns to dollars invested are as high as
15-17% [per year].”
“It comes down to cost-effectiveness and
future savings,” says Adarkar. “We have a group of
core business leaders who are adamant that pre-K has to be part
of the discussion on education. It’s a growing
choir.”
The choir reaches beyond Oregon. A
national poll earlier this year of 205 senior executives at
Fortune 1,000 companies found that American business leaders
over-
whelmingly backed public funding for pre-K for all children to
keep the U.S. economy globally competitive.
Despite the growing recognition of the importance of early
education, Oregon still falls far behind other states, which
mightily frustrates the state’s advocates. Oklahoma and
Georgia have free voluntary preschool programs for all
4-year-olds regardless of their family’s income.
California will vote in June on a measure to provide preschool
for all 4-year-olds in the state. Here, advocates are focused
on helping the neediest children first, where they say the
payoff is bigger.
Many Oregon business leaders point with envy to the strides
Washington State has made in addressing these issues. Gov.
Chris Gregoire has led the charge to create a Department of
Early Learning, a public-private partnership for early
childhood services called Thrive by Five, and Washington
Learns, an 18-month comprehensive study on the state’s
existing education system, from early learning through K-12 to
higher education.
Meanwhile, Oregon is 40th among states
in enrollment of children in preschool and struggles with
substantial funding and quality issues throughout its education
system, from pre-K through K-12 to university levels.
Lyn Hennion, senior vice president of Medford brokerage firm
Strand Atkinson Williams & York and a member of the Ready
for School leaders panel, said business interest in the pre-K
issue is all about workforce development. “Businesses
aren’t going to locate in Oregon if they don’t have
access to a good workforce. And there won’t be a good
workforce without education. In order to turn out the best
possible product, we’ve got to start young.”
Why has this taken so long to figure out? “It’s
been talked about for a long time, but it is easy to cut those
programs when you need money to fix the product, rather than
the machine,” Hennion surmises. “It will be 20
years before you get the payoff. And 3-year-olds aren’t
the voters.”
Maybe not, but they now have some powerful advocates,
businesspeople such as Thrasher, who is intent on being a voice
for children because he owes his success
to a caring mentor and because he believes in payback. And
because he’s a sharp businessman.
“Every kid should have a chance,” says Thrasher.
“And if you start right, you’ll save time, money
and effort.”
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