Why We Offer Paid Family Leave

Healthy children. Happy parents. A positive work culture. Engaged, productive and loyal employees who feel valued and supported to do their very best work. These are just a few of the many reasons the Permanent Fund for Vermont’s Children chooses to offer paid family leave. We believe offering paid family leave is not only good for young children and their families—it’s good for Vermont overall.

Research documents that paid family and medical leave has health benefits for children and parents and also benefits employers via increased worker productivity and employee retention. But before getting into statistics, let’s consider how paid family leave impacted the life of one Vermonter—our Director of Innovation, Molly.

Molly is a hard-working, highly-valued employee. She’s the kind of passionate, talented and dedicated professional that a mission-driven organization like ours relies upon to get things done. Molly loves her job and it shows. The same can be said of her husband, Tom, who works full time at a nonprofit promoting a healthy environment. The couple shares a lifetime professional commitment to improving Vermont communities.

Molly and Tom also share another passion: family. They were already raising a 2-year-old and working hard to cover expenses when the couple discovered Molly was pregnant with twins. They considered the option of one parent dropping out of the workforce to take care of the children, but realized that would mean sacrificing income needed to support a growing family. For one of them, it would also have meant giving up valued work and falling behind in a career that took decades to build.

The Permanent Fund’s family leave policy made it possible for Molly to take the time she needed at home to bond with her newborn twins without sacrificing income or leaving a career she loved. Molly was able to take 12 weeks of fully paid leave and a second 12 weeks with 40% salary coverage. In addition, the Permanent Fund offers employees an annual child care scholarship of $2,500 per child, capping at $5,000.

When Molly returned to work, she was ready to dive back in with renewed commitment and enthusiasm. She continues to be a highly productive and engaged employee.

Molly’s story is just one example of how family-friendly work policies aren’t just good for employees–they’re also good for employers. In our case, 100% of parents who have taken leave have returned to work at the Permanent Fund, saving us costs in recruiting and training, as well as productivity lost during additional position vacancy.

We all agree that parents need to be able to care for and bond with newborn children, but the reality is that more than 70% of Vermont children under age 6 live in households with all of their parents in the workforce. Because they can’t access paid family leave, too many of these families are forced to choose between their natural desire to provide their children the best start in life and their ability to keep a good job and make ends meet. This problem is exacerbated by Vermont’s shortage of high-quality, affordable child care.

A study on the feasibility of a family and medical leave insurance program in Vermont, released last month by the Vermont Commission on Women, found that the implementation of a paid leave program could save Vermont more than $500,000 annually (as much as $270,000 from reduced public assistance among working women with a recent child birth in addition to almost $280,000 from healthcare savings due to an increased number of Vermont’s newborn infants who are healthy and have normal birthweights).

We need to ensure we have systems in place that allow Vermonters to balance work and family rather than forcing parents to choose between them. Access to paid family and medical leave, coupled with access to high-quality, affordable child care when parents return to work, would boost Vermont’s economy by attracting more young talented people to the state and encouraging young families to stay here, which ultimately helps attract new businesses and helps our current small business community thrive.

What does child care have to do with Vermont’s economy?

A new study, led by neuroscientists at Children’s Hospital Los Angeles and Columbia University Medical Center, has shown that family income and parental education affect child and adolescent brain development. The study highlights that too many children are well-behind their peers in cognitive, social and emotional development by the time they reach the age of three. Having a significant segment of our young population not getting off to a strong start has serious budgetary and economic implications for Vermont.
 
The Permanent Fund is now focusing on the following four messages related to strengthening the Vermont economy:
 
1. Pay now or pay later. 
Health and human services-related costs have been far outpacing the rise in inflation and the growth of our economy. Special education costs alone have risen from approximately $150 million to $300 million in the last 20 years largely due to increased behavioral issues linked to social-emotional development, while general student enrollment was decreasing. Sound research has shown that high-quality early care and learning reduces the need for special education services. A recent study out of Duke University found that an investment of $1,100 per child in high-quality early care and education reduced children’s odds of needing special education by 39% in third grade.  This smart investment would allow us to save significantly on a wide variety of costs which are putting a tremendous strain on our state’s budget year after year.
 
2. Making Vermont the best place in the nation in which to raise a family is a savvy economic development strategy. 
Over the past 20 years, Vermont births have been steadily declining and enrollment in K-12 has decreased by 18,000 students. These are troubling statistics as we need more, not fewer, young people entering the state’s workforce and contributing to a strong economy. A system of high-quality, affordable child care will create a favorable environment for parents to have children and, as important, for those children to thrive. Chambers of Commerce tell us that when small businesses and young families are considering a move to Vermont, the top three questions they ask are related to the quality of our education system, the affordability of housing and access to high-quality, affordable child care.
 
3. Since our children will become the engine that drives the economy, we cannot afford to give up on any of them.
We know that 90% of the core development of a child’s brain occurs by the age of five and that, by far, the highest return on investment in education is in the very early years. When children show up at kindergarten prepared for school they have a chance to have success in school, continue on to higher education and contribute to a skilled workforce. We are at a point now in Vermont when we must pay attention to the research and invest our available funds where they will produce the highest returns.
 
4. Access to high-quality, affordable child care contributes to workforce development. 
We can’t be our best at work if we’re worried about who is going to care for our children. Vermont businesses’ ability to recruit and retain productive employees is greatly enhanced when parents in the workforce have access to high-quality, affordable child care.
 
In addition to the public awareness efforts of Let’s Grow Kids and the systems-building work of Vermont Birth to Five, here are two areas of innovation where we will focus in 2017:
 
1. The early childhood professional as a key member of the population health care team.
By recognizing that child care providers can play a critical role in the health of children and even their families, we make it possible to both streamline services and cut down on health care costs down the road. For more on the connection between high-quality child care and cost effective approaches to health care, go to: http://www.permanentfund.org/healthcare-integration/.
 
Alan Guttmacher, recent director of the Eunice Kennedy Shriver National Institute of Child Health and Human Development (NICHD), has joined the Permanent Fund team and will assist Aly Richards, our CEO, in forwarding this effort. With his extensive experience in pediatric research and commitment to improving health outcomes for children and families, we are so lucky to have Alan working with us on this important initiative.
 
2. The Shared Services model as a way to make child care more cost effective. 
Vermont, as a small, rural state with small and widely-dispersed child care programs, is challenged to take advantage of the cost-efficiencies associated with larger child care centers. A Shared Services Network is a community-based partnership comprised of child care programs working together to share services such as bookkeeping, billing and collections, purchasing, insurance, access to nurses, mental health consultants and substitutes.
 
Our focus on a statewide systems change presents quite different challenges than investing individually in good programs and requires a determined patience. At the same time, our short, now 8-year, timeframe creates a sense of urgency for the Permanent Fund team and all associated with this movement. We would not have begun to accomplish what we have without the enduring commitment of our supporters and now, more than ever, we appreciate that continued support.
 
There is a noticeable buzz and increase in momentum in the child care movement from where we were a year ago. Aly will keep you up to date on the details of Permanent Fund progress as we work toward our goal of all Vermont children having access to high-quality, affordable early care and learning by the year 2025.