The Business and National Case for Paid Maternity Leave and Making the Workforce Family Friendly
Speech delivered by Pru Goward,
Federal Sex Discrimination Commissioner at Lennox Head Bowls and Sports Club,
31 October 2003
- The Honourable Larry
Anthony MP, Mrs Morag Page, wife of Member for Ballina (Mr Don Page), Ms Catherine
Cusack, Shadow Minister for Women, Councillor Avis Kennedy representing Ballina
Shire, Ladies and Gentlemen thank you for inviting me here this morning.
- It gives me great pleasure
to address the Byron Bay, Ballina and Lennox Heads Chambers of Commerce Breakfast.
- This morning I would
like to discuss the business and national case for both paid maternity leave
and a more family friendly workforce.
- That there is a strong
business case for making the workforce a more family friendly environment
should come as no surprise to anyone today.
- Because today we have
more women in the workforce than ever before. Women now make up almost half
the Australian work force- twenty years ago, one in three women worked, today,
more than half of them do.
- Working wives, mostly
mothers, have been the single largest contribution to family living standards
since the seventies.
- They didn’t have
to fight their way in – the demands of economic growth meant we WELCOMED
them and today women are a crucial, integral and necessary part of the Australian
workforce.
- They are also critical
contributors today’s family incomes as the two income family is the
modern norm.
- To be precise, many
families today are one and a half incomes, but work both parents do. Only
30 per cent of all families have mum at home, dad in full time work. For families
with incomes less than $30,000 a year, (including those on welfare) only five
percent have mums at home. The working poor in particular are two income families!
- This puts to rest the
ridiculous myth that support for working mothers is middle class welfare.
- Rising divorce rates
and increasing job uncertainty mean that most women keep working when they
have children.
- Afterall, with 42 per
cent of workers changing jobs within two years and only just over half the
workforce in permanent work with conditions like paid annual leave or sick
leave, most families now need to spread the risk of job uncertainty by having
two earners. Today, 70 per cent of mothers are in paid work.
- As the Prime Minister
has said so often, this is the most significant social change in Australia
since the war and women today represent a huge public investment in education
and a vital part of our skilled workforce the Australian economy cannot afford
to under utilise.
- Sure, women work for
personal fulfilment as well as economic necessity, but their contribution
to the economy, the economic growth their work and spending power have generated,
are denied by no one.
- Especially not employers
who need to hire the best people for the job – and keep them there.
- Employers certainly
tell me how much effort they put in to keeping their good people. In research
conducted by the recently formed Equal Employment Opportunity Network of Australia
86 per cent of Australian companies cited staff retention as one of the key
drivers behind the formulation of their workplace policies. Recruitment and
community reputation was the only key driver cited more frequently, with 96
per cent of organisations citing it as a key driver behind their workplace
policies.
- Employers also tell
me how much they invest in staff retention – GE states it is their number
one cost issue.
- This is only going to
increase as the market requires increasing numbers of skilled people, and
there are fewer from whom to choose.
- With high numbers of
female graduates – in many areas, including medicine and law, more than
50 per cent of graduates are women, employers have to recognise that they
can no longer ignore the requirements of half of their potential recruits;
particularly if they want to hire the best person for the job. Young female
employees shop around. They now expect their needs to be recognised, just
like those of young men.
- Hiring these women is
only one part of the picture. They then have to be retained. The more capital
invested in their education and training, the more important this becomes.
- Every year the Australian
Government invests public funds into education and training programs.
- In 2000 women made up
46 per cent of all Australians with post school qualifications.
- Women are spending years
studying and training to enter the workforce – Women are attending university,
entering TAFE and doing other a variety of other training courses.
- They are qualifying
as lawyers, accountants, chefs, beauticians and aroma therapists.
- It is when women have
committed at least 10 years to their field, in study and/or experience, and
are often on their way to becoming leaders in their fields, that they leave
the workforce - women are most likely to have children when they are between
the ages of 30 and 34.
- employers lose valuable
employees and Australia fails to maintain its most skilled labour force, something
it cannot afford to do in the increasingly competitive global market.
- Paid maternity leave
has been found to be an effective tool for employers in ensuring they do not
lose valued and necessary female staff members permanently following the birth
of their children.
- Just ask AMP who have
reported an increase in retention rates from 52% in 1992 to 90% in 1997, following
the introduction of paid parental leave; or
- SC Johnson who recorded
100 per cent return rates since introducing paid maternity leave; or
- Westpac who introduced
six weeks paid maternity leave in 1995 and found the proportion of women returning
to work increased from 32 per cent in 1995 to 53 per cent in 1997.
- According to Ann Sherry,
Westpac introduced the measure for two reasons:
- One, to be the employer
of choice in their industry. As a very large hirer of women workers, in a
climate of no national scheme of paid maternity leave, it was an obvious way
to differentiate themselves.
- Two, cost effectiveness.
Westpac looked at the turnover of our women and their return to work rate
for maternity leave and found that the return to work rate was quite low (at
that time it was just over 50 per cent). They calculated that if we increased
the return to work rate by only 10 per cent over three years, paid maternity
leave would be paid for.
- McDonalds too provides
paid maternity leave to ensure female staff retention – they offer McDonald’s
company employees, eight weeks paid maternity leave of which four weeks is
paid on commencement of the leave and four weeks is paid upon return to work.
- In assisting female
workforce retention rates paid maternity leave brings benefits to the broader
economy, which is good for all business.
- This in not to deny
that it is predominately big business offering paid maternity leave –
where does this leave small business?
- In the current market
they become uncompetitive, simply because they cannot afford to introduce
paid maternity leave.
- This is why a national,
government funded paid maternity leave scheme is the only equitable solution.
It is the only solution which will genuinely improve female retention throughout
the entire workforce – not simply as a ripple effect.
- Christopher Ruhm in
his research on parental leave across sixteen European countries estimates
that a national law establishing three months of fully paid leave will increase
female labour supply by 10 -25 per cent in the year before pregnancy.
- With a national scheme
of paid maternity leave in place, those businesses who already offer paid
maternity leave do not lose their ‘employer of choice’ edge -
a national government fund scheme of paid maternity leave paid at the federal
minimum wage (currently $448) leaves plenty of room for them to entice employees
with top ups.
- Also, while a national,
government funded paid maternity leave scheme is the both a starting point
and centerpiece of a family friendly workforce, there are certainly other
family friendly measures for business can introduce.
- Because obviously, the
challenge of balancing work and family do not end three months after a baby
is born.
- The economic realities
of today mean that the modern family is a two income family – regardless
of the child’s age.
- The cost of living
today is high - House prices, even in rural towns like Yass and Goulburn where
I come from, make it hard for young couples to buy a house without at least
Mum working part time.
- In Sydney for example,
where 40 per cent of the country’s population lives, a typical first-home
mortgage in Sydney is 40.6 per cent of average household income.
- The average mortgage
is almost 50 per cent of the average household income.
- Australia wide, first
mortgages are 25.3 per cent of the average household income.
- No chances of the average
family being able to get by on one wage any longer.
- Our challenge is to
make sure that all people are able to work and parent – we need to have
in place good part time work opportunities available, job sharing and flexible
hours.
- We need to encourage
employers to see their part-time workers as valuable, as people who can be
promoted and take greater responsibilities, instead of sitting at the bottom
of the heap.
- If we don’t,
a lot of young parents won’t consider part time work when their children
are young for fear of losing out.
- We need to get our
schools and community centres to fit in better with these realities. Why schools
should close at three when so many parents don’t get home until after
five increasingly puzzles me.
- Every time I see kids
hanging around bus shelters and shopping centres in the late afternoon, I
can’t help wondering why state governments or local councils can’t
be more creative with school hours, sports programmes or staggered days.
- Living in a country
where work and family don’t mix has produced one of the biggest challenges
for Australia, and the second great change I’d like to focus on today,
the collapse in our birth rate.
- Ironically, the harder
we make it for women to combine work and family, the fewer children there
will be -and then the pressure on women to stay in paid work to make up for
the shortage of labour.
- It has becomes a vicious
circle.
- It helps explains the
fertility decline of the past twenty years and why there is no sign of our
fertility increasing.
- This declining birth
rate, as the Europeans have discovered, challenges not only our future national
economic viability, but even what sort of a nation we will be.
- Some of us might want
Australia’s population to fall, but the truth is that economic prosperity
is closely linked with the size of our population.
- Let’s assume
we want the population to stay roughly where it is.
- To do that, the average
number of children born to each woman needs to be 2.1 or, with some migration,
a little less.
- Never let it be said
that families don’t take money into account when planning children.
- During the Great Depression,
people put off getting married and the birth rate dropped to 2.1.
- After the war and during
the Long Boom, it rose again. It peaked in 1961 with 3.6 children per woman.
The Baby Boomers had been born. There were lots of us in large families- four
wasn’t such an uncommon size. Schools in towns like mine, supported
by the Korean War and high wool prices, burst at the seams.
- But the fertility rate’s
been dropping ever since. It’s now down to 1.7 children per woman, and
predicted to fall even further. Well below replacement level.
- It’s not true
of all women- unemployed women, including women in rural Australia, Islamic
women and Indigenous women, have more children than women with education and
women working and living in cities. They hold up our birth rate. But 1.7 is
the national average. In Melbourne it’s actually 1.4.
- In the meantime the
huge generation of baby boomers has been working its way through western society
for the past fifty odd years. First they demanded schools, then universities
had to double in number, more recently contact lens and reading glasses have
hit peak demand, demand for walking frames and artificial joints are still
to experience the thrill of being wanted by the biggest and most affluent
generation of oldies in history.
- But there is also a
down side. The ageing boomers are about to profoundly affect our economic
prospects.
- For the first peace
time since the great plagues and flu epidemics, the work force of the western
world is set to decline, some predict as early as 2015 – when the oldest
of our baby boomers start to retire.
- Fancy that, for the
first time since the Great Plagues of Europe, the size of the Western labour
markets will actually fall. The population won’t actually fall until
we start dying in our 80s.
- Unemployment is projected
to reach around 4 per cent in 2005.
- Currently in Australia
there are 18.2 people aged 65 years and over for every 100 people of working
age.
- ‘Working
age people’ being our country’s tax payers.
- By 2041 the number
of retirees needing the support of each taxpayer will have doubled. That means
an increased tax bill….and decreased output.
- Immigration will not
make up for this loss for two reasons –
- One, the rest of the
industrialised world is also after skilled migrants and they are very heavily
bid for- we’ll get a few of them but not enough.
- Last year an estimated
40,000-50,000 Australians permanently emigrated – our highest number
ever. They’re young, talented and ambitious. Part of the new sexy global
economy. We will be competing with the US, Canada and the rest of the English
speaking world to get them back.
- Secondly, relying on
unskilled immigration is expensive.
- Sure, large numbers
of unskilled and poorly educated migrants might mean more consumers but they
are also more likely to be unemployed and require large amounts of welfare
support, often language training and re-education.
- The children they bring,
who we will train and educate as the workforce of tomorrow, represent a long
term investment. Up to a quarter of a century. Demographic studies suggest
these children will have no more children than other Australians, so they
will not, in the long run, help our fertility rate.
- So if we don’t
produce more people, we need to get more people into work.
- We do that either by
lowering the age at which people can begin work, or raising the retirement
age or reduce the number of people who withdraw from the workforce during
their productive years.
- Today there are a record
number of young people in education. One in three Australians aged 20 to 24
is still in some form of training.
- That number has never
been as high. It obviously means fewer people able to work. But would we want
them to- don’t we need more skilled workers, fewer unskilled?
- OK - then we can keep
them in work for longer. Slowly this is beginning to happen. Early retirement
for women is being phased out-too slowly in my opinion, since it is women
who currently end up poor in old age and should be encouraged to stay longer
than they do.
- Of course many older
workers point to the high unemployment rates for the over fifties as evidence
that older people have little choice but to retire early. They’re not
wanted.
- That must and can change,
just as it has in other countries that grappled with the greying of their
workforce.
- But there is a limit.
- Ageing inevitably means
that, at least physically, older workers are not able to work the same long
hours as younger workers. This is clearly true for manual labourers but also
for those whose eyesight, or eye hand coordination or nimble fingers are integral
to their work. You don’t see many 60 year old road workers.
- This leaves getting
more working age adults into work as the remaining strategy for increasing
the size of the labour market. And that’s why Australia’s been
so happy to have more women work in the past twenty years.
- But we’ve done
it the lazy way. We’ve ignored their parenting role and hoped their
guilty consciences will do the trick. No longer. They’re not wearing
it any more. They don’t want to work and pretend they have no family
responsibilities like previous generations have done.
- Afterall, most women
leave the work force in the first place because they can’t make work
and family fit together.
- Australia has only
very slowly started to move towards better integration of work and family.
The trouble is, most of these so called better conditions are enjoyed by professional
women or those working in large companies like banks and public service departments.
- 30 percent of Australian
women report having access to paid maternity leave, they tend to be professionals,
teachers, nurses, managers or public servants.
- Mind you, the average
amount of leave they get is only 6 weeks, so it’s very modest - and
they often have to go back to work to receive the balance of money. But better
than the rest of the workforce, shop assistants, waitresses, bar workers,
office assistants, who can expect nothing. Small business cannot afford to
pay, and nor should it.
- It is my guess, having
spoken and listened to hundreds of women and read thousands of pages of evidence,
that the factors stopping women from returning to work with children also
discourage them from having children, or having more children, or enough children.
- With Australian work
places still so unsuited to women with children, it is no wonder that our
fertility rate has dropped to 1.7.
- I’ll put this
more graphically; if we tell young women they can top the school, win the
University medal, top the TAFE course, open a business, borrow money, buy
their own home unit - and then make being working motherhood so unattractive
– then of course they won’t have children.
- Our daughters think
being a super mum sucks. It is no wonder that the proportion of only-child
families has risen from one in five families to one in three families in the
space of a generation. Having one child is tough enough if you need to keep
working; having two is out of the question.
- So every year more and
more Australian families both work and have children, the most difficult most
stressful combination. But they’re now not having children until they’re
thirty and they’re having fewer.
- But if we want Australian
families to regain their sanity, and if we want more Australian families and
a future generation, then we have to confront what’s happening head
on.
- Paid maternity leave
alone can do none of this, it would be fatuous to suggest otherwise, but as
every OECD country that’s tried to increase its fertility rate, it’s
a must have part of the package.
- Forget telling women
to go home, or banning them from working if they have children. A much smarter
and saner move for us is to ensure work and families can mix. It makes the
family a happier place. And that’s what we’re really here for.
- Allowing a parent to
take their lunch break so they can collect their child from school costs nothing
and makes the staff member happier and more likely to stay. It also helps
the company’s profits.
- A comparison by US asset
consultants Frank Russell of the returns from companies ranked as best employers
in the US with other stock market indicators found that companies rated as
good employers also outperformed others on the stock market.
- Strong management practices,
such as retraining and redeploying workers instead of sacking them, are linked
to strong financial performance. No surprises really. It’s called good
management. The rest of the world seems to realise this - Australia and the
US remain the only two Western countries in the world without paid maternity
leave- and only Switzerland makes its employers pay.
- In the UK, Canada,
Japan, New Zealand and continental Europe, it’s paid for by government.
And not just for six weeks- in Norway and Canada, try a year, in France and
the UK, try six months.
- In those countries
women just don’t go back to work with very young babies, and frankly,
neither should we.
- It’s shocking
to think that there are women in Australia going back to work before they’re
recovered from the birth or the Caesarian, while their babies are still on
night feeds, because they need the money. And that there are more of them
every year.
- Health studies confirm
the risk. A ten week period of paid leave after birth is associated with a
five per cent decrease in infant mortality.
- Breastfeeding, absence
of other people’s germs and parental attentiveness are all reasons why.
- Australia’s falling
fertility is the consequence, very directly, of providing women with more
choices, including equal access to education and training, safe and reliable
contraception. Sure.
- But it is also the
consequence of not supporting the choice to both work and have children.
- Now we have a fertility
collapse and the threat of labour shortages and an ageing society without
the joy of children.
- We need to make some
big changes or we wither away.
- Australia, if it is
to be a great nation, or indeed a nation at all, cannot ignore what’s
going on.
- We cannot turn back the clock, nor do we desire to – next year marks the 20th anniversary of the Sex Discrimination Act 1984 (Cth), it will be both a celebration of how far we have come in securing rights for women in this country but also as a time to consider what is still to be done, the challenges that lie ahead and it is a great nation faces the challenges of the future – one that is shackled to the past is doomed.
Thank you.
Last updated 2 December 2003
