Statewide View: Solve shortage of investments in youngest Minnesotans

Investing in great starts for Minnesota’s children would improve families’ budgets, children’s lives, and our state’s economy.

Providing high-quality, developmentally supportive care for young kids requires substantial resources, no way around it. Families must either give up earnings from a job or pay $16,000 on average for non-parental child care for infants and $12,000 a year for 4-year-olds. Whatever choices families make, most struggle to balance the responsibilities to both earn and provide care. Higher-quality care costs more but also delivers larger benefits to children and communities.

Minnesota suffers from a shortage of investment in our youngest kids, a shortage in what families can pay themselves and what we others invest. Across federal, state, and local programs, we invest only about $1,500 per year per child on care and education in the first five years of life, according to the Hamilton Project. In contrast, once kids turn 5, we spend nine times more annually for each of the next 13 years. This uneven pattern in Minnesota resembles the U.S. overall but falls far short of investments in the youngest children and families of other developed countries.

Our shortage of early investment leaves parents most alone when they can least afford it. Our policies strain family budgets most when parents’ earning power and credit scores are lowest . The shortage of public and private resources when kids are youngest harms child development during a critical developmental period. The quality of each child’s early experiences has lifelong impacts. Families strive to invest in a great start for their children but cannot marshal the resources.

Our early childhood care investment shortage affects families statewide, with special severity in nonmetro Minnesota , where a lack of affordable child care hampers rural economic development.

The issues predate the pandemic but COVID’s disruptions forcefully showed that parents cannot earn without robust care and education systems. The Minneapolis Federal Reserve found that mothers of young children were particularly slow to reenter the workforce since the early months of the pandemic, resulting in the absence of tens of thousands of workers. Better child care options would also help Minnesota’s businesses grow.

Public dollars invested in improved access to high-quality early care for children, especially children from more-disadvantaged families, can increase children’s lifetime earnings, improve lifelong health, and decrease both their later dependence on public programs and criminal activity. That investment can generate rates of return exceeding private capital’s returns in the stock market, meaning those funds would be better invested in young kids’ care than left in the private sector. Without this, the market under-supplies quality care, and we lose these benefits.

This impactful, demanding work makes a foreboding business proposition and an unsustainable career path. While Target can capture all the value it creates and raise wages, child care providers cannot. Child care workers will keep quitting to take higher-paying jobs in fast food and retail. Because children thrive in stable, caring relationships with adults, staff turnover driven by low wages harms care quality.

Deep underinvestment is the sector’s underlying issue, not regulation. The main cost driver is that caregivers’ attention cannot be divided very finely without harm to children’s development. Thirty high school kids can share one teacher or 150 college students can. For infants and toddlers, only a few can. Fewer children per caregiver contributes to children’s health, safety, and development, as well as reducing staff stress and turnover.

Weakening child-to-staff ratios may reduce financial costs and alleviate child care shortages in the short term. However, it worsens children’s development. Regulation that does not improve care quality should and is being reformed, but it’s fantasy to pretend that regulatory reform can meaningfully lower costs without harming quality and child development. Rather than make care worse, we can make it better and more affordable.

Our state laid out a plan in the Great Start Task Force recommendations to ensure we have a stable, professional early childhood workforce so kids can experience stable care. This includes revising how the state pays providers, looking at the true cost of quality care, increasing early care, and education compensation so they are paid in a way that reflects the full value they create.

The Minnesota Department of Revenue estimates an historic $17.5 billion state budget surplus. This creates a rare opportunity to catch up on sorely needed investments in Minnesota’s families and workforce. Few public investments offer as much broadly shared benefit as high-quality early childhood care and education. In addition to strengthening young families, the public at large — from the businesses that employ young parents to the future economy that depends on a highly skilled workforce — will reap benefits.

Aaron Sojourner of Minneapolis is a labor economist at the W.E. Upjohn Institute for Employment Research (upjohn.org), is a member of the Minnesota State Advisory Council on Early Childhood Care and Education, and is a former senior economist for labor at the White House Council of Economic Advisers under Presidents Barack Obama and Donald Trump. He wrote this for the News Tribune.