This article originally appeared in InsideSources on December 21, 2018.
New Human Capital Index Reinforces Early Education’s Economic Punch
A tight labor market has inspired both the public and private sectors to get serious about the present, and near future, of the American workforce. From the President’s National Council for the American Worker to JPMorgan Chase CEO Jamie Dimon’s substantial investment of capital and expertise in Detroit, American leaders are recognizing and attempting to meet the urgent need for workers — and the students who will soon become workers — to have access to skills-based training. But are these efforts pointed in the most effective direction?
The World Bank’s Human Capital Index (launched in October) indicates the greatest beneficial human capital development starts much earlier than adulthood — and the countries that invest in education starting at birth through age 5 are succeeding when it comes to realizing the full economic potential of every citizen.
According to the report’s authors, “between 10 and 30 percent of the country-to-country difference in economic output per person is due to differences in human-capital use.” The United States only ranks 25th for men and 32nd for women on the World Bank’s Index — a fact that may threaten our economic primacy and global competitiveness going forward.
Without a doubt, the workforce development programs that have recently been established in the public and private sector arenas are important and worthy. The President’s initiative is helping to expand apprenticeships and encourages increased investment in training and re-training (or upskilling) workers.
“Grow with Google” is a new $1 billion, 1 million-hour investment that helps Americans with the skills they need to get a job or grow their own businesses. An impressive list of corporations, including JP Morgan Chase and Microsoft, are providing support to programs in Detroit (as well as other economically struggling cities) that offer job skills training in manufacturing and information technology. A collaborative group of employers known as the Business Leaders United for Workforce Partnerships is working all over the country with local partners to train and hire community residents for skilled jobs.
This list could go on, and all the effort and investment are to be commended. However, these approaches focus mostly on adults and none are holistically addressing human capital development or creating inroads in the earliest foundation of workforce development in the United States.
Since the educational process is like building a brick house — each piece builds on the one that came before — at some point American leaders will have to also heighten attention to the earliest bricks if they want the strongest house.
The American public understands this intuitively, and the importance of early childhood is the unusual topic that merits equal interest and support from across the spectrum of politics. In a 2017 bipartisan poll, 82 percent of Republicans, 85 percent of independents, and 97 percent of Democrats said that “making early education and child care more affordable for working parents to give children a strong start” is important for the United States. Eighty-nine percent agree on giving children a strong start in life through quality early childhood education. The poll also revealed that majorities across party lines support investing in birth-to-age-5 early childhood education.
And there is hope that attention for, and investment in, early education will increasingly develop among business leaders. The business community may follow the lead of perennial entrepreneur Jeff Bezos, who recently committed an initial $2 billion to an effort that will include a new nonprofit network of Montessori-inspired preschools in low-income communities, or alternative forms of educational support.
Other corporations are offering assistance to increase the quality of their own employees’ childcare both inside and outside the workplace. For example, Mike Petters, CEO of Huntington Ingalls Industries, donates all but $1 of his $1 million salary to provide scholarships for his employees’ children to enroll in pre-K school readiness programs.
These company leaders are doing so not just because it is an attractive employee benefit, but because those leaders understand that child care actually is child education — learning starts from birth — and the children of the current workforce are the workforce of the future.
A booming economy has made the American workforce an ever more urgent issue, and has inspired innovative trends in workforce skills training for adults. For a stronger workforce talent pipeline over the long term, more vision may be required. We know from economic research that every dollar invested in high-quality birth-to-5 early childhood education delivers a 13 percent annual return on investment. Public and private sector leaders should broaden their sights to early education, and soon, to reap those individual and collective benefits.