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The ‘motherhood penalty’

The ‘motherhood penalty’

Allegra Spender: Of all the issues facing women, it’s the ‘motherhood penalty’ that really boils my blood.

 

When I look at statistics on women’s economic empowerment, the one which boils my blood the most (and it is quite a contest – only 4 per cent of funding goes to all-female founded startups, only 9 per cent of ASX 300 CEOs are women, for example) – is what Treasury calls the ‘motherhood penalty’. In the five years after having their first child, Australian women’s earnings fall by 55 per cent on average: a penalty of almost $250,000.  

And what about the ‘fatherhood penalty’? You might actually call it the ‘fatherhood bonus’ as men’s wages continue to rise: from a mean salary of around $55,000 a year before their first child is born to slightly more than $80,000 five years later.  

Obviously, men’s wages aren’t rising because they’re fathers. They’re rising because new fathers are at a stage in their careers when they are typically developing skills and experience that lead to more seniority, more responsibility, and more pay. 

But most new mothers are in similar stages in their careers too. The ‘motherhood penalty’ not only reflects the hours they are working, it also reflects that they aren’t getting the opportunities to develop the critical skills and experience that lead to higher pay.  

This is a huge challenge for Australia, but overseas experience shows that it doesn’t have to be that way. We do terrifically well at educating women but not on economic empowerment. And we won’t fundamentally change the ‘motherhood penalty’ until we are really sharing the caring – until fathers have the opportunity and the expectation – of balancing work and childcare responsibilities as women do.  

Because in Australia we don’t like to share – in fact 86 per cent of primary parental leave is taken by women – and on the other side, over 70 per cent of part-time workers are women. We have some of the biggest discrepancies between men and women in hours of paid and unpaid work in the OECD.    

Sharing the caring has benefits for all sides. There are benefits to men’s mental health, to children through increased connection with their parents, and female economic empowerment.

And let’s not forget the economy. As Danielle Wood memorably put it: “I can’t help but reflect that if untapped women’s workforce participation was a massive ore deposit, we would have governments lining up to give tax concessions to get it out of the ground”.

Government has a significant role to play here by incentivising both mothers and fathers to take significant parental leave, with “use it or lose it” portions of leave that are only available to the second parent, helping drive that shared care from birth. This has been a particular policy focus for me, and it is good to see the government increase the use it or lose it part from 2 to 4 weeks, and give more flexibility to how care is shared. But the work here is far from done and increasing the “use it or lose it” portion to 8 weeks, 12 weeks and beyond, is critical if we are going to change the culture and must be a priority for this government and future ones.  

And there are other carrots and sticks that could be deployed. Charlotte Mortlock recently suggested publishing paternity leave take-up rates by company as part of the WGEA data – I think that is a great idea, and at a minimum, companies should look at their own data themselves and compare with the uptake of maternity leave.  

The ‘motherhood penalty’ – women taking more time out for caring responsibilities and the longer term impact on their careers – accounts for about a third of the difference in earnings per hour. But it is not the only source of the gender pay gap. Around one quarter is career choice, and there is one-third is “everything else” which is a combination of straight-out discrimination, and broader workplace cultures and behaviours that don’t foster women’s advancement. Each of these sources of pay difference need different solutions, and will vary by organisation, and the only way to approach it is by forensic examination of each of the gaps and how to change them.  

WGEA didn’t do reports on the gaps in pay in parliament – apparently this is reported in different cycles – but they should. With the same number of women (11) on the 17-person crossbench, as in the 50+ Liberal/National Coalition in the House of Representatives, there are certainly discrepancies to shine a light on.  

 

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