Alex Andrews: This was commissioned by the U.S. Department of Health and Human Services. The grant actually went through the Michigan Department of Education to the Early Childhood Investment Corporation, and they are who kind of commissioned us to work on this.
Patrick Center: Long title, big issue. This is addressing this childcare crisis. Walk me through the shortages, the cost. the nuts and bolts of what employers are facing.
Alex Andrews: Yes, so over the past, I would say 20, 22 years, our early childhood workforce in Michigan has fallen by about 27%. That equates to around 29,000 fewer educators. So, each educator is able to serve about four to 12 children. So, if you kind of quantify that number in terms of the slots that we've lost, it's about 116,000 to 348,000. So, it's quite a number of slots that we've lost, which equates to essentially more parents being forced to stay home in order to care for their children. So, the real cost there is around $2.9 billion per year.
Patrick Center: Within all of this, there are some key drivers. You mentioned two decades. What has been happening, the layering over time? What's happened to that workforce?
Alex Andrews: Yeah, I think the big issue here is really around compensation and benefits. So, if we look at the early educator workforce, very skilled, very qualified and credentialed, but the wages that they're making are on par with roles that typically require only a high school diploma. So, the highest paid role in the early education workforce, lead teachers, make about $16.03 an hour. So that is about on par with what you're seeing for fast food workers, retail workers, roles that do not require advanced levels of education. Now add on there an extra layer where early educators do have pretty strict licensing requirements, which means they do have to continue to go back for their continuing education. That's a lot of time and a lot of resources that folks have to invest to stay up to date on their licensing, and they're not making near enough that they should be making. So, if you look at the gap between a lead teacher and what you might make as a kindergarten teacher in a K-12 setting, in some regions that gap is about $15 an hour. And then add on there the extra layer that K-12 educators add a host of additional benefits they can access that are not available in the early childhood environment. So, you're talking about folks who are highly skilled, they're doing important work, but they're making about the same wages that you could make if you got a job at McDonald's or Best Buy, Target. So, it's quite an issue and I think we're seeing a lot of the workforce now looking for opportunities outside of early education. And I think the big issue here is that it's not getting talked about enough. So, we see a lot of attention investment now going towards the K-12 educator crisis. But if you kind of look at where the early childhood workforce is going to, they tend to be going to those roles in K-12. So, we're seeing more and more workers now leaving this work, not only for some of those entry-level roles in retail, in fast food, but simply for roles in a public K-12 setting, because a lot of those jobs require very similar skills, very similar credentials. They really don't necessarily have to go back to school to get the qualifications they would need to be a kindergarten teacher.
Patrick Center: It can be quite expensive for families. If I am a parent, I'm expecting that those educators should be on the higher end of the pay scale. Where does the money go? Is it insurance costs that these providers pay? Is it the meal service for children throughout the day? Where are the expenditures? Where does the money go?
Alex Andrews: It's all of the above. And I think there's also some pretty strict regulations that are coming down from the state and federal government, which means that these increased wages essentially would have to come on the backs of parents if there were not increased investment. So essentially, childcare providers cannot increase the number of slots that they have because there are strict ratios. There are a lot of red tape essentially around the system that makes a kind of market-driven response unfeasible. So, there's quite a additional investment that's needed on the part of the state and federal government to kind of help providers afford these increased costs. Running a facility is expensive. There's a lot of costs associated with administration. All of these folks do have a lot of reporting they have to do. So, I wouldn't necessarily say that they are not paying their educators fairly because they're trying to get profit off of it. Nobody that I've talked to sees the childcare system as a profitable enterprise. They're doing this because they believe in the mission. We know that the years between zero and five are foundational for the future of a child's growth. So, a lot of these educators are essentially operating on budget deficits because they believe in the importance of the work.
Patrick Center: So where do we find the relief? There are a number of issues here. You have employers who are seeking out skilled employees who may not be returning to the workforce because they are staying home to take care of their child or children. And then you have this workforce who is leaving because they're not being paid enough. Where does the relief come? How do we fix the situation?
Alex Andrews: Yeah, well what we've proposed here is a system-wide unifying wage scale. It essentially means regardless of what setting you're operating in, whether it's a private provider, a home-based provider, school-based setting, a center-based setting, you're making the same wage regardless of which system within the system you're operating within. And you're also making the same wage regardless of your title. Because if we look across the system, we see there are a lot of different titles and different wages associated with those titles, but we see that they are all generally doing the same work across these different settings. So, we're proposing that lead teachers should make X amount of dollars, regardless of what setting you're in. That will kind of vary based on your geography, your qualifications. So, what kind of credential do you have? Is it a... a child development associate, is an associate degree, is it a bachelor's degree? Where are you actually working? Because we see that areas like Grand Rapids, Detroit tend to have higher costs. So those folks need to be making higher wages than say somebody who's in the U.P. And then we're also seeing that a lot of folks tend to be in the workforce for a number of years. So, we have a lot of teachers who are say, 20 years of experience, who are not getting the same level of longevity bonuses or pay that you might see in a kind of private market system. So, we're also proposing a wage scale that scales based on experience. So, I think it all starts with making sure that we're paying a living wage, essentially, a self-sustaining wage, because we're seeing right now that about 28% of the workforce is actually not able to afford the survival level budget for a single individual. If you look at what the costs are for the average family, only about 1% of the educated workforce is actually making enough to support a family. So, I think it all starts with bringing these wages up. At the moment, we don't necessarily know how to do that, where that money will come from? So that is kind of the second phase of this report. First, we just wanted to outline the problem, present this wage scale, and then really figure out how we effectuate policy to make sure that this sustainable.
Patrick Center: Since you don't have that solution quite yet, have you approached business leaders with this information and what kind of a reaction are you receiving? Are there some ideas being floated that would increase the pay scale?
Alex Andrews: We have not approached business leaders yet. The report just came out. ECIC has been convening a task force comprised of industry experts, parents, even childcare providers to really figure out how we make this work. I think one of the ideas that has come up thus far is around a voucher for parents. So, I know the governor also has a separate group that's being designed to kind of figure out how to fund early education for all Michiganders. So, it's definitely a topic that is being discussed a lot right now. It's just sort of a question of how do we actually make this work in a manner that allows parents to have choice. So, I think the ability for parents to actually choose which providers they want to go to is important. We've seen things like the Tri-Share funding kind of working effectively, but we're also seeing that employers are not necessarily always aware that those resources are out there. So, I think whatever we figure out that we want to do, it really has to be an intentional effort to make sure that is communicated broadly and that it's easy to use.
Patrick Center: The study is called “Balancing the Scales, a Proposal for a Systemwide Wage Scale to Address Michigan's Early Childhood Education Crisis.” Alex Andrews from Talent First, thank you so much.
Alex Andrews: Thank you, Patrick.
