Study quantifies child-care industry’s economic impact

BOULDER — The child-care industry contributed $463 million to the economy of Boulder County in 2002, according to a report released Sept. 16.

The study was conducted by Denver-based BBC Research and Consulting, and was sponsored by the Early Care and Education Council of Boulder County through a grant from the Colorado Department of Education.

Boulder and Larimer counties received a total of $50,000 in grant money to fund similar studies in both counties.

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The study counted “new dollars” put into the Boulder County economy as a result of paid child-care services based on both direct and indirect economic impacts.

Sources of direct economic impact total $274 million and include: $45 million in child-care fees paid by parents who would not be working if paid child care were not available; $223.5 million in earnings of parents who would not work or work fewer hours if paid child care were not available; $615,000 in child-care fees paid by people outside the county; and $4.5 million in child-care feeds paid by federal or state child-care subsidy programs outside the county.

The study determined that the indirect economic impact totaled $188.8 million based on “respending.” When child-care providers or parents spend “new dollars,” they provide a benefit to the economy a second time, but not at its full original value. Standard economic multipliers developed by the Bureau of Economic Analysis are used to calculate indirect impact.

The study surveyed parents to determine the impact of the availability of child care on their lives. Findings include: 33 percent of Boulder County households used some form of paid child care during the year, and about three-quarters of households reported that one adult in the household would have to stop working or work fewer hours if paid child care were not available.

The study also looked at the child-care work force. The child-care industry in Boulder County employed 1,266 workers in 2001 who collectively earned $18 million.

Average annual wages for child-care workers is $18,210, well below the county’s median wages in 2001 ($48,000 for men, $32,000 for women).

These low wages concern Pam Patterson, president of the Boulder County Association for the Education of Young Children, who is calling for community involvement in increasing the earnings and status of child-care workers. “We don’t make a living wage,” Patterson said. “It’s critical that the community makes sure the people who take care of our most precious commodity are being compensated.”

Gail Wilson agrees. The executive director of the Colorado Office of Resources and Referral Agencies cited other community-based programs that raise money for education. “They are voting on it today in Seattle,” Wilson said. Seattle voters are deciding the outcome of Initiative 77, a 10-cents tax on espresso drinks that would be earmarked for child-care and preschool programs.

The study focused on economic impact of the child-care industry as a whole. The Early Care and Education Council will present in October the findings of another study regarding the early care and needs assessment of Latino families, said Karen Rahn, the council’s co-chairwoman. The project is being funded with a $75,000 grant from the John S. and James L. Knight Foundation.

Contact Caron Schwartz Ellis at (303) 440-4950 or e-mail csellis@bcbr.com.