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Wednesday, June 29, 2022

Reforms required to enable more equitable economic outcomes for working women

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With a new government comes the opportunity to do things differently.

And according to economics experts from RMIT University, it’s high time for reforms to enable more equitable economic outcomes for Australian women.

Dr Leonora Risse, economics lecturer at RMIT University, research fellow with the Women and Public Policy Program at Harvard University and national chair of the Women in Economics Network, says that reforms to child care costs are a top priority.

“We know from the research that childcare is the number one barrier for women who want to work more hours or enter the workforce,” she tells Aged Care News.

Latest Australian Bureau of Statistics data shows that 106,800 Australian women want to work but cannot due to childcare responsibilities, but many more are working part-time despite wishing to reengage full time with their careers.

The current combination of childcare costs, and the way that tax benefits function mean that for a typical household it’s not financially viable for the second income earner — which is predominantly the woman — to increase her hours of work beyond three days per week.

National chair of the Women in Economics Network, Dr Leonora Risse

Distinguished Professor Sara Charlesworth, expert in the intersection of gender and work relations at RMIT’s School of Management, adds that with limited support to get women back to work full-time, earnings gaps can begin to emerge even within industries.

“Even in feminised sectors such as retail, aged care and childcare there is a gender pay gap,” Charlesworth says.

In response to this issue, the new Labor Government has committed to a $5 billion dollar reform package, which will see increased subsidies for 96 per cent of Australian families.

But there is still a way to go, with Australian women penalised on multiple fronts for returning to work full-time.

“The current combination of childcare costs, and the way that tax benefits function mean that for a typical household it’s not financially viable for the second income earner — which is predominantly the woman — to increase her hours of work beyond three days per week,” Risse explains.

“When you look at the fourth or the fifth day, your household then incurs extra costs of childcare, but they also forego family tax benefits, which are based on the second income earner’s salary, so it’s actually a disincentive or effectively a financial penalty for increasing your hours of work and trying to build that economic independence.

“That incentivises women to work part-time rather than full-time, even if they have the capability, the ambition, and the opportunity to do so.”

Dr Leonora Risse, an economist specialising in gender-equity policies, says that child care benefits must be expanded, and services made more accessible, so that returning to full-time work is feasible for mothers.

It’s a hopeless situation for families trying to get ahead in this current economic climate, with Australian childcare costs ranking second-most expensive out of OECD countries, and inflation on the rise.

“We know that with inflation rising, that hits lower income households the hardest, because for them, basic essentials [including] grocery items, rent, petrol, takes up a higher proportion of their weekly budget,” Risse says.

While the immediate consequence is greater pressure on families as they try to balance their weekly budgets, the long-term effects on women’s economic security are far more pernicious.

“Whatever a woman happens to earn throughout the working week, that all adds up to her superannuation at retirement,” Risse says.

“And this helps to explain why we see this persistent gap between men and women’s retirement or superannuation balances.”

Currently, Australian women, on average, retire with between 22 and 35 per cent less super than men.

We talk about the family unit … but this is also about women’s economic independence and autonomy, and the satisfaction and dignity of knowing that you have invested in your skills and your education and … being able to participate more fully be a role model for your children as well.

Dr Risse

As Aged Care News has reported, women with limited superannuation budgets are a cohort that is increasingly vulnerable to homelessness, especially in the event of a separation.

“We also know that a certain percentage of relationships will break down and so you are looking at to what degree do women carry that economic security with them throughout their life span and when they reach retirement age,” Risse says.

“We talk about the family unit … but this is also about women’s economic independence and autonomy, and the satisfaction and dignity of knowing that you have invested in your skills and your education and … being able to participate more fully be a role model for your children as well.”

Greater accessibility needed for nurses and carers

Not only is subsidised childcare important, Risse says, but creating a system of more accessible child-care services is vital.

“A lot of nurses in the aged care sector would be familiar with doing night shifts or unpredictable hours or just needing childcare at very short notice, and so we do need to look at building a system which can fully accommodate women across a variety of their working arrangements.

“The takeaway message here is that you’ll hear a lot of focus on how to make childcare cheaper, but cheaper childcare by itself is not the full solution.

“We also need to invest in more accessible and flexible childcare to cater, for example, to the needs of shift workers … so that it’s not just workers who work nine to five who can benefit.

A lot of nurses in the aged care sector would be familiar with doing night shifts or unpredictable hours or just needing childcare at very short notice, and so we do need to look at building a system which can fully accommodate women across a variety of their working arrangements.

Dr Risse

“These workers, at the moment, rely on a lot of informal care.”

Wage rises needed for female-dominated industries

Another area of concern for Risse is the gender pay gap, which denotes on average the difference in full-time earnings between Australian men and women across all industries.

The current gap, sitting at 13.8 per cent, reflects an over-representation of women in lower-paid occupations, especially in the care industry.

As our aged care workers battle to see the Fair Work Commission fairly compensate them for their work in the work value case currently being heard, Risse says that policies to enshrine gender equity could help such cases get over the line.

“So the way it currently operates is that if a female dominated industry wants to put forward a case for higher wages, they have to provide evidence that their skills are on par with a male dominated industry, and that the nature of the work is similar; it’s what they call a ‘male comparator’,” she explains.

“Comparing the job task of an aged care worker or a childcare worker to something that’s a male dominated profession, like a lot of the vocational trades, is a really wide leap; the difference in the nature of the work means that that’s a really hard bar to pass.”

However, if gender equity becomes a fundamental tenet of the Fair Work Act, Risse says that industries can have the value of their work assessed in their own rights, not in competition with other industries.

There’s very limited use in simply saying to women that the way that we’re going to close the gender pay gap is that we want you to move into the male-dominated, higher-paid industries like construction or finance, because we still desperately need somebody to fill the jobs in aged care and nursing and childcare.

Dr Risse

“That would mean that the Fair Work Commission could now look at these cases for why a female-concentrated industry should be paid more … to understand that the reason why wages are relatively low in those industries is because it reflects a gender-patterned undervaluation of that industry —  that caring work is associated with a female norm that has historically and traditionally been undervalued.”

With the gender pay gap largely reflecting differences in pay between industries, individual women, in theory, have the same earning potential as men if they pursue careers in more traditionally lucrative, male-dominated industries.

But Risse emphasises that suggesting that women in caring roles turn their backs on the industry would both be disastrous for the economy, as well as evasive of the need to reform the entrenched undervaluation of this form of work.  

“There’s very limited use in simply saying to women that the way that we’re going to close the gender pay gap is that we want you to move into the male-dominated, higher-paid industries like construction or finance, because we still desperately need somebody to fill the jobs in aged care and nursing and childcare.”

Risse says that whilst society largely congratulates and admires workers in the care industry, this has not been reflected in economic terms.

“They’re deeply valued and cherished, but the sticking point is how do you transform that into higher wages, so it’s not just about platitudes.

“Even though workers in the care sector do it out of altruism and because they’re caring people … just because you’re an altruistic person, doesn’t mean you shouldn’t be paid your worth.”

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