Report proposes solutions to poverty wages driving child care crisis

NEWS RELEASE: Grand Rapids, MI (October 19, 2023) In response to a two-decade decline in Michigan’s child care workforce, a new report lays the groundwork for a unifying wage scale to address a child care crisis aggravated by poverty-level wages that are driving early childhood educators away from the profession.

These shortages have been estimated to cost the state $2.88 billion in economic activity per year. The new study, “Balancing the Scales: A Proposal for a Systemwide Wage Scale to Address Michigan’s Early Childhood Education Crisis,” examines the key driver of those shortages: the early child care and education (ECE) workforce is significantly underpaid given the level of education and experience required of these roles.

Among the findings:

  • Even as the nation saw modest growth in the ECE workforce since 2001, Michigan suffered a decline of nearly 27%, which equates to a loss of 29,000 educators and a reduction of child care openings estimated to range from 116,000 to 348,000.
  • The current median hourly wage of Lead Teachers ($16.03) ranks in the 12th percentile of all occupations in Michigan, the same ranking as Restaurant Cooks, Chauffeurs, and Wallpaper Installers — jobs that require only a high school diploma. Aides, the largest portion of the ECE workforce statewide, earn even less, a median hourly wage of $12.45.
  • Over two-thirds of Michigan’s early care and education workforce earns less than $15 per hour, despite over 67% possessing a postsecondary credential.
  • Just 1% of ECE workers earn enough to support the average family size in Michigan (one adult, one preschooler, one school-aged child), while just 28% earn enough to support a single adult.
  • Because women comprise over 91% of Michigan’s ECE workforce, and many are women of color, this low pay perpetuates racial and gender-based wealth disparities.

Link to report

The report, developed by the Early Childhood Investment Corporation and CEO alliance TalentFirst and funded by a grant from the U.S. Department of Health and Human Services, proposes a statewide wage scale that provides transparent and equitable wage lattices to bring ECE compensation closer to parity with comparable K-12 roles.

The report was guided by the multidisciplinary Task Force for Equitable Educator Compensation formed by the ECIC. The findings will be used to develop wage scales in two communities as pilots funded by the ECIC’s Child Care Innovation Fund.

“The Balancing the Scales report and statewide early care and education wage scale for Michigan illustrate what families, employers, and the early childhood workforce have long argued: Adequate compensation and a supportive professional environment are critical to ensuring that the early childhood workforce is diverse and highly qualified,” said Dawne Bell, CEO of the Early Childhood Investment Corporation. “We’re so thankful for the partnership with the Michigan Department of Education, TalentFirst, Corporation for a Skilled Workforce, and an incredible Task Force to be able to publish this report.”

Noting a previous report by the U.S. Chamber of Commerce Foundation that documented the economic toll of ECE workforce shortages in Michigan, Kevin Stotts, president of TalentFirst and co-chair of the task force, said the new study shows that low pay carries a big cost.

“Too many parents who want to work are forced to leave the workforce. Too many children miss out on the proven benefits of high-quality early education. Too many educators must rely on public assistance,” Stotts said.

“It’s also clear that, unlike in other sectors, a market-driven approach has proved incapable of addressing Michigan’s child care crisis.”

By examining wages and workforce trends in 16 regions statewide, the report provides the foundation for the task force to launch pilots implementing the proposed wage scales for four classroom roles: Lead Teachers, Assistant Teachers, Aides, and Substitutes.

Once the two communities for the pilots are identified, the impact of wage scales on talent attraction and retention will be evaluated. That data will be used to educate policymakers and recommend sustainability strategies for early care and education (ECE) financing solutions that will lead to a system of accessible, high-quality ECE that places equity at the center.

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