Starting Early to Build the Workforce and Customer Base of the 21 st Century

1. Starting Early to Build theWorkforce and Customer Base of the 21st Century Early Care and Education Consortium Robert H. Dugger Managing Director, Tudor Investment Corporation Advisory Board Chair, Partnership for America’s Economic Success Robert.dugger@tudor.com

2. Partnership for America’s Economic Success • Intensifying global competition and steadily growing fiscal imbalances are important American challenges. • 20% of workers are functionally illiterate; we need children to become adults who are literate, numerate, job-ready, team-capable. • Many (not all) of the traits that make good employees, neighbors and citizens begin in the first five years of life. The brain reaches 85% of its adult weight in the first five years of life. • Bottom line: For best results, start early and keep going.

3. Partnership for America’s Economic Success Background • Established in 2006 by a collaboration of 12 funders, business leaders, economists and early childhood experts. • Robert Dugger of Tudor Investment Corporation is co-founder and Advisory Board Chair. • Managed by and housed at The Pew Charitable Trusts; director is Sara Watson of Pew. • Purpose: Make all children’s successful development the top economic priority for the nation. • Strategy: Strengthen U.S. competitiveness and achieve fiscal sustainability through evidence-based investments in young children prenatal to age five.

4. Research Agenda: Five Areas of Focus • Microeconomics – Economic gains from specific interventions Health Parenting Housing Early education Parental income Nutrition • Macroeconomics – Economic growth, job creation, fiscal sustainability, and global competitiveness implications of proven investments • Sector Analysis – Size of the “youth human capital development” sector • Finance Policy – Best ways to pay for proven investments commensurate with economic impact • Communications – How to communicate findings and inform policy discussion

5. Why should business care? Scan of normal three-year-old brain Scan of three-year-old brain after severe neglect

6. Why should business care? Children who start behind too often stay behind If 50 1st graders have problems reading, then 44 of them still have problems reading in 4th grade. First Graders Fourth Graders

7. Perry Preschool Economic Impacts at Age 40

8. Research Results: Closing the Poverty Gap Northwestern University (Greg Duncan) • Early childhood poverty is associated with a range of adverse adult outcomes. Relative to their poor peers, children living at twice the federal poverty level: • Complete two more years of school; • Earn twice as much as adults; • Have much better health. • Raising all poor U.S. children to the poverty line would almost pay for itself in adult earnings alone: • Cost: $70,000 • Benefits: • Sharply increase adult earnings ($53,000-$99,000 per child) • Decrease welfare dependence ($3,200 lifetime TANF, food stamps) • Slightly increase schooling (0.2 years)

9. Early adult attainments, program participation, health, and behavior by poverty status between the prenatal year and age 5 60 Below poverty 1-2 times poverty Over 2 times poverty 50 40 30 Mean or Percent 20 10 0 Years of Earnings Work hours Food stamps AFDC/TANF Poor health High Ever arrested Ever Non-marital completed (in 1000 (in 100 (in 100 (in 100 psychological (males) incarcerated birth prior to schooling dollars) hours) dollars) dollars) distress (males) age 21 females (females) Research Results: Closing the Poverty Gap

10. Despite These Results, We Are Not Investing Urban Institute/New America Foundation (Gene Steuerle) • Federal investments in children are projected to decline by 14 to 29 percent as a portion of federal spending over the next decade • Federal spending will rise by $650 billion, but investments in children will see only .01 percent of this increase • Federal focus on consumption rather than investment programs jeopardizes our economic growth

12. Using the Message in Seattle, Illinois, Minnesota

13. It's a mystery. With all the energy devoted to expanding prekindergarten programs, leaving no K-12 child behind, improving community colleges and sweetening aid for college students, how can the U.S be short of educated workers? Despite frequent assertions by advocates for one solution or another, there is no one sure cure for this. If only we got more kids into high-quality pre-K, it wouldn't be enough. If only we improved K-12 education, it wouldn't be enough. If only we got more teenagers to finish high school, it wouldn't be enough…We have to do them all. “Lack of Well-Educated Workers Has Lots of Roots, No Quick Fix,” David Wessel, The Wall Street Journal Business leaders in South Dakota are taking an interesting approach to economic development. They're using money set aside for recruiting new businesses and investing it in preschool education. Studies show that every dollar spent on early education saves seven dollars down the road, on potential welfare and incarceration costs. “South Dakota makes preschool a form of economic development” Cara Hetland, Minnesota Public Radio The Message is Getting Out

14. Business Leader Support • Jim Rohr, CEO of PNC Bank, leading $100 million PNC Grow Up Great • Chamber of Commerce CEOs from Maine to California • George Kaiser, CEO of Kaiser-Francis Oil, major supporter of early care and education in Oklahoma • Ed Basha, CEO of Basha’s Grocery Stores, led fight in Arizona for early childhood ballot initiative • Massachusetts Strategies for Children campaign business leaders: Mara Aspinall, CEO of Genzyme Genetics; Ronald Sargeant, CEO of StaplesRichard Lord, CEO of Associated Industries of Massachusetts • CEO’s of Federal Reserve Banks in Richmond, Cleveland and San Francisco made statements in support of early investments as economic development • Fed Chairman Ben Bernanke – “high returns that early childhood programs can pay” – 2007 speech to Omaha Chamber of Commerce

15. Policy Progress on Investing in Children • In 2007: • Pennsylvania votes $75 million for prek, child care • Illinois commits to prek for all 3 AND 4 year olds; health care for all; AND increased $ for infant programs. • Ohio approved over $200 million for prek, child care, mental health, etc. • Texas raises home visiting funds by $7.9 million

16. Partnership for America’s Economic Success - Outreach Commissioned Research Over 20 studies on economic benefits of investments prenatal - 5 Monthly Discussion Forums New findings, leaders, messages, campaigns - Toll-free call-in number or join in person in DC Fourth Annual PAES Conference July 9-10, 2008 at U.S. Chamber of Commerce in Washington, DC Second Annual Telluride Economic Summit September 21-23, in Telluride, Colorado -- By invitation only for senior business executives Getting the Word Out – Presentations to • Georgia Partnership for Educational Excellence • Partnership for Wisconsin’s Economic Success • Milken Global Conference • University of Miami Forum on Costs of Inadequate Education

17. Join Us, Pennsylvania! The nation needs a million voices – join us • Sign up to receive monthly PAES updates, including notices of PAES/Invest in Kids monthly forums at www.PartnershipforSuccess.org • Participate in monthly forums, upcoming conferences • Ask us for research findings • Help us secure business leaders to disseminate this message to policy audiences, the public, the business community, and others • Link to PAES website and send us items to be posted