Dallas Fed CEO: Early Education Key to Rebuilding GDP

Dave Moore, Staff Writer

Boosting early education in Texas and across the U.S. will help the nation reverse its slide in productivity, Dallas Fed President and CEO Robert Kaplan said at the Dallas Regional Chamber’s inaugural Sate of Early Education luncheon.

“The first thing we need to do, if we’re going to improve productivity, is improve early childhood education,” event keynote speaker Kaplan said. “Why? Because a significant percentage of kids in this country are starting first grade reading behind grade level. We find if you start behind in first grade, you never do catch up.”

The Feb. 12 gathering at the Winspear Opera House also included a panel of business leaders who discussed their family-friendly employment policies, honored individuals for their work in education, and highlighted a new Dallas County Community College District four-year degree program in early childhood education, including a financial investment from PNC.

Appropriately, Kaplan lead off with a lesson in economics.

“GDP growth is made up of growth in the workforce and growth in productivity,” he said. “So, you literally add those two together, and you get gross domestic product and I can tell you that the United States – because of aging – our workforce growth in the United States is decelerating.”

Kaplan said the average workforce growth in the 1970s was about 2.75%, compared to the current growth rate of about 0.25%.

“Texas is bucking this trend, and the reason … is we’ve got huge migration to the state,” Kaplan said, adding that the population might climb from 22 million to 29 million within a decade. Yet, he added, the question of an aging workforce and declining worker productivity is relevant across the U.S. economy. The influx to Texas is masking the problem, he said.

“We need to find ways to grow the workforce, and that’s a whole … discussion for another day,” he said. “But we have to find ways to get people into the workforce and to make the workforce more accessible to them.”

One key, according to Kaplan, is to create a workforce that is continually learning, so it can adapt to the technological changes in industries.

“The theory we have at the Dallas Fed is that productivity growth is decelerating mainly because of educational attainment,” he said. “If you got a college education in the United States, you’re likely going to find that during the course of your career, your income is increasing, and your productivity is increasing. You might have some traumas in your career, you might have to change jobs or change firms,” he said. “But you got the education and the skills to adapt to technology and technology-enabled disruption.”

“If, on the other hand – our research shows – if you’re one of the 46 million workers in this country with a high-school education or less, you’re increasingly finding your job either restructured or eliminated.”

Kaplan said employers have told the Fed that the abilities to read and write are key in allowing workers to adapt to changes and maintain their productivity in the workplace. And that reading skills have plummeted in the U.S.

The U.S. lags behind other countries in math, science and reading, he said.

Kaplan said that while Texas has higher enrollment in early education programs, those programs tend to be half-day rather than full-day and, on the whole, the state spends less on early childhood education than the rest of the country. Compounding matters, roughly 60 percent of the students in early childhood education are growing up in poverty.

”Because we’re only doing (early childhood education) part-day, and not spending enough, we’re not getting the teacher quality because we’re not paying enough,” he said, adding that he was heartened when Texas passed legislation (House Bill 3) to expand full-day public pre-K options in Texas.

“From a business point of view, it’s the highest in equity return,” he said. “Why? Because migration to the state is masking some of these issues. We import a big workforce. That won’t go on indefinitely. The workforce of the future for this state are these young people. And we need to dramatically improve early childhood education. If we do, it will improve productivity in this state, it will decrease levels of incarceration, and reduce the need for public benefits, and it will improve GDP growth and prosperity across the entire state. It’s a smart investment (and) it’s critical.”

Kaplan said efforts by the Dallas Regional Chamber and Early Matters Dallas have been crucial in improving early childhood education in the region.

Along those lines, Robert DeHaas, Founding Dean of the Early Childhood Education Institute at the Dallas County Community College District, announced the district will launch a four-year baccalaureate degree in early childhood education in fall 2020, the first of its kind in the nation.

After Kaplan spoke, the employer panel – which included United Way of Metropolitan Dallas’ Susan Hoff, IBM VP Gilbert Molinar and Accenture’s Mark Olney – described ways their firms make their workplaces family friendly.

Molinar said that IBM has adopted HR policies that help its workers adapt to changes in their lives. One example he cited was an extra week off for newly married workers to celebrate their honeymoon. New parent employees also get expanded 12-week parental leave, on top of the six-to-eight week standard time off. Other programs also help employees build a family and offer lounge-like lactation rooms for nursing mothers.

“We try to look at the entire scope of, ‘What does it mean to be family friendly, from marriage, through child care, through parental care, and how do we take care of our employees, so that when they come to work, they can bring all the value to work, and be present in the work environment?’ ” Molinar said.

Accenture’s Olney said that his firm offers back-up dependent care, which provides up to 80 hours of family assistance from licensed caregivers, in the event their primary care option falls through.

Hoff said United Way invites employees to bring their babies to work with them for up to three months after they return from maternity leave.

“It actually really helps employees get more focused and connected to work and encourages bonding with parents and the child,” she said. “I think long-term it builds a connection with the organization. We hope it demonstrates to them that we care about them as people.”

Also at the event, two individuals were honored by Early Matters Dallas for their work on behalf of early childhood education: Dallas ISD Trustee Miguel Solis received the Mary Jalonick Changemaker Award, and Braswell Child Development Center Director Muriel Webb received the Early Matters Bright Spot Award.

The event was presented by PNC and held in partnership with Early Matters Dallas.

Upcoming DRC Education and Workforce events include the State of Higher Education on May 6, State of Public Education in Q3 and our new State of Workforce in Q4.