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The Business and National Case for Paid Maternity Leave and Making the Workforce Family Friendly

Discrimination Sex Discrimination

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

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