A recent article in the Washington Post calls for strengthening the economy by investing in workforce development — starting with high-quality early childhood education programs. Written by Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, the piece builds on the Fed’s history of support for early childhood programs.
In the article — “Investing in people as an economic growth strategy”— Lacker focuses in part on the current and historically high long-term unemployment rate.
“Given the limitations of monetary policy, what can be done to improve labor market outcomes in the long run?” He asks.
“At the Richmond Fed, our research suggests that much of what we’re currently seeing in the labor market reflects structural trends rather than a primarily cyclical change in labor market behavior. That has prompted us to think about long-term strategies to prepare workers for the labor market.”
In addition to an education, Lacker says, people need so-called soft skills. “These basic emotional and social skills are learned very early in life, and it can be difficult for children who fall behind to catch up: Gaps in skills that are important for adult outcomes are observable by age 5 and tend to persist into adulthood.”
Lacker’s article is based on a speech that Lacker gave last month at Lynchburg College’s School of Economics and Business.
“The takeaway from this discussion is that examining workforce development through the lens of human capital economics suggests that workers will realize higher returns on their investments in human capital when those investments are made early in life,” according to the speech transcript. “That could mean expanding the scope of workforce development strategies to include early childhood education and providing young people with information about the risks and returns of multiple career and educational options.”
Ready Nation — “a membership organization of business leaders who work to strengthen businesses and the economy through proven investments in children and youth” — issued a statement of support for Lacker’s piece explaining, “Vocal support for early education among Federal Reserve officials began in 2003, with groundbreaking research from Minneapolis Federal Reserve Bank Vice President Arthur Rolnick and his colleague Rob Grunewald. Former Chairman Ben Bernanke publicly connected early learning and economic development in two separate speeches, and related endorsements have been made by Federal Reserve Bank presidents in Boston, Richmond, Cleveland, Atlanta, and San Francisco.”
ReadyNation also released a fact sheet that details the history of support by Federal Reserve leaders, noting, “Since 2004, Federal Reserve leadership—the Chairman and leadership from the regional banks—have endorsed high-quality early childhood education as a key economic development strategy.” The fact sheet lists a decade’s worth of speeches and articles, including “Early Childhood Education: Springfield Tackles a Benchmark,” by former Eye on Early Education blogger Irene Sege.
Quoted in the statement of support, John Pepper, former CEO of Procter & Gamble and a member of ReadyNation, said, “Unfortunately too many kids who don’t attend quality preschools stumble right out of the gate and fall behind year after year. They either drop out completely or detour into a life of low-wage jobs and economic insecurity at a time when the vast majority of well-paying careers require postsecondary education or training. This is all the more reason why business leaders are joining those in law enforcement, the military and education in calling for smart investments in these early years.”
In other words, high-quality early childhood education makes exceptionally good economic sense.