Early child care has $1 billion economic impact and long-lasting business benefits

Alabama’s early child care and education might be a $1 billion industry that creates 25,000 jobs but it has far-reaching effects on business, families, and society, according to a new study released Monday.

The study conducted by Auburn University at Montgomery for the Alabama Partnership for Children says that early care and education rank among the top industries in economic impact and the number of jobs created. The study by AUM economic professor Keivan Deravi says the industry has a $1.03 billion state impact and is responsible for an average 24,717 full time equivalent jobs.

Perhaps a greater influence is on society: early education leads to better personal and financial outcomes throughout a man or woman’s life.

Jeremy Arthur, president and CEO of the Chamber of Commerce Association of Alabama, spoke at the news conference at AUM. The CCAA and the Business Council of Alabama 10 years ago formed The Partnership, a strategic alliance that doubles their individual influence and works for an educated workforce, among other goals, he said. “Economic development and education are what the business community focuses on,” Arthur said.

He compared the impact of the early childhood education industry and the aerospace industry that has 36,000 direct jobs, and the state’s automotive industry with 34,000 direct jobs. “It’s a significant job creator and is also a significant workforce,” said Arthur.

The BCA, a member of the Alabama School Readiness Alliance, is a strong supporter of early childhood education and of expanding Alabama’s voluntary pre-kindergarten program for 4-year-olds. BCA President and CEO William J. Canary serves on the ASRA Pre-K Taskforce and advocates investment in a product that will “increase sales, establish a foundation for future growth and bear dividends for decades.”

“Every $1 spent on high-quality pre-K programs creates $7-$9 in future savings to the communities and states that invest,” Canary said earlier this year when the Legislature appropriated an additional $9.4 million to expand pre-K to an additional 1,500 children. The program is administered by certifiably trained staff.

Deravi, the study’s author, said no other investment will have as much impact in the long run as early childhood education. “It absolutely generates an enormous rate of return,” Deravi said.

Calvin Moore Jr., director of child care services for the Alabama Department of Human Resources, said child care is a struggle for many families that have to juggle work and children. “No family should have to choose between high quality care and their right to a wonderful career,” he said.

Gail Piggott is executive director of the Alabama Partnership for Children. “There are not many investments that you can make that have a $1 billion impact on our economy and employ 25,000 and allow tens of thousands of parents to go to work,” she said.

The BCA, Alabama’s foremost voice for business, is a non-partisan statewide business association representing the interests and concerns of nearly 1 million working Alabamians through its member companies and its partnership with the Chamber of Commerce Association of Alabama. The BCA is Alabama’s exclusive affiliate to the U.S. Chamber of Commerce and the National Association of Manufacturers.

-Dana Beyerle