Exploring the costs of a values-based budget for ECEC
The Sector > Economics > Exploring the costs of a values-based budget for ECEC

Exploring the costs of a values-based budget for ECEC

by Freya Lucas

July 25, 2019

A new report, jointly issued by the Economic Policy Institute and the Center for the Study of Child Care Employment (CSCCE) at the University of California, Berkeley has estimated the true costs of a high-quality early childhood education and care (ECEC) system in the US, which would address and adequately resource educator wages. 


The findings will be of interest to the Australian ECEC sector, with numerous campaigns, initiatives and publications highlighting the ongoing challenges of educator wages and workforce attrition rates in the country. 


ECEC educators in California are paid US$13 an hour (A$18),and, as a result, are twice as likely as other California workers, and six times more likely than K–12 teachers, to live in poverty. 


The US state has recently attracted attention for its increased support for ECEC but report authors note that the investment necessary to adequately compensate early educators has yet to be made. 


Legislation recently proposed in the State, in the form of Assembly Bill 123, the Preschool for All Act, received bipartisan support but was amended to remove a provision to raise compensation of early educators. 


A key challenge to allocating funds is a lack of understanding about the true cost of services, of which support for early educators is the largest expense.

The report provides the estimated cost of an early care and education system in which educators, whether they work with infants, toddlers, preschool-age children, earn wages on a par with primary school teachers.

Lead author, CSCCE Co-director Marcy Whitebook, said it was time to “get over sticker shock, and be realistic about the cost when educators are justly paid,” adding “it’s well-documented that the workforce heavily subsidises the cost of early care and education services with their low wages”.


The report’s authors, EPI Senior Economist Elise Gould, Ms Whitebook and fellow CSCCE Co-director Lea J.E. Austin, and EPI Data Analyst Zane Mokhiber, propose a budget with an annual cost of US$29.7-75.4 billion (A$41-107 billion), or US$US30,000-37,000 per child (A$43,000-53,000). 


Additionally, because of the increased demand anticipated when such a system is in place, the authors estimate an additional one-time investment for recruiting and training of teachers of US$3.0-9.7 billion (A$4-14 billion). 

The authors estimate that the total number of teachers required in California’s reformed ECE system would range from 323,000 to 826,000.

Such reforms, authors note, present an opportunity for policymakers and other stakeholders to ensure that teaching young children, performed mostly by women of colour, is valued and respected. 


“Unfortunately, low pay and poor working conditions reduces the quality of care that children receive,” said Ms Gould. “Young children, families, and workers all deserve an early child care and education system that works for them.”


The authors argue that this cost model will ensure California has a skilled and stable ECEC workforce that can deliver high-quality services, meet growing demand, and relieve the tremendous financial burden from families.


To view the report, see here: Breaking the silence on early child care and education costs


To learn more about the Center for the Study of Child Care Employment, see here. 


CSCCE is a project of the Institute for Research on Labor and Employment (IRLE) at UC Berkeley. To learn more about IRLE, see here

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