Since March of 2020 the country has been attempting to acknowledge the economic impacts of the instability in the early learning sector. In order to ensure early learning and care programs could stay open, the federal government invested billions of dollars in grants to states to ensure programs could remain open and provide safe, reliable care to the children of essential workers, by increasing wages and providing retention bonuses.

Now federal grants are expended, providers are unable to keep up with increased wages. The rate Michigan pays for early learning and care does not support a living wage for teachers. Every economic study of early learning and care has come to the same conclusion - public dollars dedicated are not enough to support the wages necessary of educated professionals that provide quality care, and parents of young kids cannot afford to pay more.

The Growing Michigan Together Council report quoted a US Chamber Foundation report showed a huge impact to Michigan’s economy from instability in early learning and care

• Michigan loses $2.88 billion in economic activity and $576 million annually in tax revenue due to childcare issues.

• 14% of parents left a job in the prior six months due to childcare.

• 52% of parents in an needed to make a significant adjustment to school or work training due to childcare issues in the past 12 months.

The Council focused on identifying ways to grow our population and encourage Michigan’s young adults to stay in Michigan after college and “Make it in Michigan.” If growing the population is the focus - through decreasing the outmigration of young people and increasing our birth rates - we’re still not acknowledging that 21 - 35-year-olds say the number one reason they aren’t having kids is because it's too expensive.

The Balancing the Scales study provided the data for what we already know: Parents can’t afford to pay and Teachers can’t afford to stay.

• Over two-thirds of early childhood educators in Michigan earn less than $15 per hour — and 1 in 4 do not earn enough to afford basic necessities for themselves, let alone their families.

These low wages fail to reflect the skills, complexity, and credentials required to teach young children

• A lead teacher in a licensed child care center requires 97% of the same skills and qualifications as a Kindergarten teacher - yet they earn almost $14 less per hour

• Over 91% of Michigan’s early care and education workforce are women, many of whom are women of color, these low wages also perpetuate existing racial and gender-based wealth disparities.

Under the current model, in order to increase wages, parents would be responsible for incurring the costs of increased wages but childcare in Michigan is already too expensive.

• The average annual cost of care for an infant in Michigan is nearly $11,000. That’s 17% of the median household income in the state — and almost one-third of the median income for a childcare worker.

The state expansion of 4-year-old prekindergarten supports readiness and balances inequitable access to quality child care before children enter kindergarten. But from birth-47 months old, access to reliable child care gives the employee the chance to produce at their best. Our economic stability and future growth depend on a reliable workforce, and every industry relies on child care.

As FY 2024-25 budget discussions continue, we encourage the legislature to prioritize stability in the early learning and care system as the PreK for All expansion continues.

MILEAP Budget:

• Increase funding for the child care scholarship by 26% to support better teacher wages in centers that serve low-income families. This would bring rates back to FY22/23 levels.
• Require MILEAP to develop a process for including home-based child care providers in the PreK for All expansion. Existing early learning and care providers need a pathway to participate in PreK for All and the support to provide high-quality programming. Many home-based child care providers will close if they are not included in the PreK for All expansion, which will further limit child care options.

School Aid Budget:

• Reinstate the requirement that 30% of preschool (GSRP) be provided by community-based child care programs removed by the House. If PreK for All does not include community-based programs, it will lead to the closure of hundreds of child care programs across the state.
• Reject the Senate proposal to require community-based child care programs to pay the same wages as the local school district - without the resources to do so. This is an unfunded and inequitable requirement that would exclude community-based child care programs from PreK for All.
• Allow community-based programs to qualify for $25k PreK for All expansion startup grants - this was eliminated by the Senate.