How States Are Using PDG B-5 Grants to Improve Workforce Compensation

The BUILD Initiative, ZERO TO THREE, and Start Early, recently released a new brief highlighting the strategies states are using to improve workforce compensation in their Preschool Development Grant Birth through Five (PDG B-5) applications. This brief highlights how PDG B-5 is being used to build the capacity of early care and education (ECE) systems, create infrastructure, provide direct services, and pilot new work in order to support workforce compensation. Their analysis found that states are employing different pilot programs and temporary strategies that are moving the needle in their states, but more federal funding is needed to ensure that they can see this work come to fruition and support young children and their families.

PDG B-5 is a competitive federal grant designed to improve states’ ECE systems. In 2023, 21 states were awarded Planning Grants, and 21 states were awarded Renewal Grants. While the scope of work for planning grantees is to conduct comprehensive needs assessments and draft strategic plans, the renewal grantees focus on implementing their strategic plan. The 21 renewal grantees are using this infusion of federal funding across a wide range of content areas in their ECE systems, and in a variety of ways, such as by implementing compensation reforms, expanding professional development training, building the supply of child care, and streamlining administrative requirements. 

In analyzing PDG B-5 grant applications, BUILD found that states have been charting their own course when it comes to ECE system development by working on a variety of projects and initiatives at once. They found that states tend to focus on shorter-term projects for their grants, perhaps because states do not see PDG B-5 as a reliable, continuous funding stream and lack confidence that state funding would be available to sustain the work. States may also be focusing on producing near-term results, or the broad framework of the grant may have led to more responsive strategies.

Quality early childhood educators play a pivotal role in shaping young children’s futures, laying the foundation for their cognitive, emotional, and social development. Despite this important role, early educator compensation has been consistently low. Stagnant wages and a lack of comprehensive benefits and wellness supports make it difficult to recruit and retain staff, which contributes to rapid turnover, classroom closures, and high levels of stress among educators. A well-compensated and supported workforce is essential to providing high-quality services that promote children’s healthy development and family well-being.

PDG B-5 funding allows states to support the ECE workforce through improved compensation (which is inclusive of wages, benefits, and working conditions), and grantees are doing so through a variety of avenues. According to BUILD’s analysis, PDG B-5 plans were most likely to improve workforce compensation across five strategies: 

1. Leveraging salary scales to stabilize workforce compensation, 
2. Expanding workforce benefits,
3. Providing short-term financial relief,
4. Using data and analysis to inform compensation efforts, and 
5. Creating opportunities for community-led solutions
   

PDG B-5 grants provide an opportunity for states to create supportive, targeted strategies. Click here to read more about all of the strategies states are pursuing and read on to see a few examples directly from BUILD of how states use PDG B-5 grant funds to improve workforce compensation. 

Salary Scales

Salary scales offer a dependable framework for clearly conveying the expected earnings of educators. Alabama, Delaware, Kentucky, Massachusetts, Michigan, Nevada, and Texas plan to use PDG B-5 funds to align salary scales with career pathways and credential frameworks to clarify the relationship between compensation, education attainment, and career trajectory. 

• Kentucky will revise the state’s early educator career lattice to align more closely with national models and other evidence-based salary scales. The new career lattice will reflect increases in workforce compensation, ultimately working toward a salary scale that keeps pace with professional experience, qualifications, and parity across types of sites. This work advances current efforts to structurally sustain compensation that meets living wage standards and includes occupational reciprocity and professional benefits.  

Workforce Benefits

In the face of inconsistent payment practices, low payment rates, and high staff turnover, providers often face difficulties in providing comprehensive compensation packages that encompass benefits such as health insurance and retirement plans. Kansas, Maine, Montana, and Oklahoma plan to use PDG B-5 funds to cover the cost of child care for early educators. 

• Maine will use PDG B-5 funds to cover 75 percent of the cost of child care for new child care staff. These scholarships span 12 months and are reserved for parents who are working in licensed child care programs, who have never previously worked in child care, and who are ineligible for child care subsidies. The state anticipates funding 30-40 Child Care Scholarships. 

Short-Term Financial Supports

Wage stipends and bonuses can offer educators short-term financial relief. Colorado, Hawaii, Idaho, Kansas, Missouri, Mississippi, Nevada, New Hampshire, Texas, and West Virginia will use PDG B-5 funding to focus financial supports on key segments of the workforce.

• Mississippi will offer subsidy bonuses to providers who serve families in areas with large populations of families who speak a home language other than English. They will receive a monthly subsidy bonus for employing a lead teacher or an assistant teacher who is fluent in a child’s home language. 

Data and Analysis to Inform Compensation Efforts

As required by PDG B-5, grantees must complete and periodically update a comprehensive, statewide needs assessment to inform the state’s strategic plan and proposed strategies. This includes the needs of the early childhood workforce. Alaska, Arizona, Colorado, Delaware, Hawaii, Indiana, Kansas, Louisiana, Massachusetts, Minnesota, Montana, New Jersey, Oklahoma, Rhode Island, Texas, and Washington plan to use PDG B-5 funds to complement the needs assessment, either to implement recommendations from existing studies or to conduct new analyses and use the results to inform future work. 

• Delaware will conduct a cost of care study that includes adequate compensation for early educators. The state will use cost-of-quality estimation modeling to determine the true cost of care to support early childhood professionals’ wages and apply those findings to the state-funded preschool program expansion pilot.

Community-Led Solutions

Leveraging the expertise of local families, leaders, practitioners, and community partners to design and execute strategies can be critical in improving workforce compensation. Subgranting is one activity of the PDG B-5 Renewal grant that seven states (Arizona, Delaware, Hawaii, Idaho, Montana, Texas, and Vermont) have leveraged to encourage community-led strategies to increase early educator compensation. 

• Vermont will prioritize Workforce Innovations Projects, subgrants that address key barriers to recruiting and retaining the workforce. Increasing wages and compensation (such as supplemental wages, insurance, or other benefits) is one of the five categories of strategies that the state identified subgrantees can use as the basis of the Workforce Innovations Projects. 

Given PDG B-5 grants were not intended to offer the necessary long-term financial support required to ensure adequate compensation for all early educators, states primarily proposed initiatives that can lay the foundation for future compensation plans. 

BUILD concludes the brief by discussing various opportunities at the state and federal level. At the federal level, there are opportunities to leverage Child Care and Development Fund (CCDF) dollars to create provider-friendly payment practices. One recent development is that in July 2023, the Office of Child Care released a Notice of Public Rulemaking (NPRM) that included several proposals designed to support financial stability for child care providers and, in doing so, give them the resources and funding predictability to increase staff compensation (view FFYF’s comments here). Federal leaders can also support staff compensation by encouraging states to move towards cost-based models, which reflect the true cost of providing high-quality care (learn more about how states can use provider reimbursement rates to support early educators here).

Throughout 2023, BUILD will continue to produce briefs highlighting how states are using PDG B-5 renewal grants, focusing on the following strategies: Career Pathways, Mixed Delivery Systems, and Financing.

This is part of a larger blog series, find the rest of our PDG series here.