Future of Work and Public Policy

Future of Work and Public
Policy

Commissioner Pru Goward

7.30am, 17 July 2003

COMMONWEALTH HEADS SENIOR EXECUTIVE

BREAKFAST SEMINAR

Parmelia Room,

Parmelia Hilton,

14 Mill St

• Thankyou to the Senior Executive
  Group for inviting me to speak today, it is always a pleasure to be
  in your beautiful city .....and after an absence of a couple of years,
  good to be able to address this group again.
• As a rule, I'm not sure
  how wise it is to address breakfast functions. After all, breakfast
  is immediately preceded by sleep, which in turn is preceded by a period
  of late night reading.
• Late night reading is all
  those interesting books that come along in my area, like Wife Work,
  by Susan Maushart, or Work Life Collision, by Barbara Pocock.
• As you can imagine, I travel
  a lot and I have to make sure I don't read them at home. Because there
  is nothing less conducive to a pleasant evening than a few pages of
  soul-ripping Wife Work, or the equally distressing Pocock book.
• Indeed, whatever time of
  day you read them, you are guaranteed to fall into a black abyss of
  silent rage. It is all just so unfair and so dangerous!
• I have actually told Barbara
  Pocock that there were chapters of her book I could not finish reading,
  it was so like reading about bits of my own life I had tried hard to
  forget.
• But I recommend each of
  them to you, not to blacken your breakfast mood, but because they are
  such graphic illustrations of all the lifeless and painless socio-economic
  statistics we as policy planners see continuously rolling under our
  noses, and because they help explain why those painless statistics actually
  represent an imperative.
• I have to say it was the
  accounts I heard from individuals about the difficulties of combining
  work and family which has informed my commitment and driven my passion
  for paid maternity leave.
• It is very difficult to
  persist with calling for the recognition of social change if you can't
  picture it.
• More recently I have been
  forced to conclude that the nature of federal politics, the away-nature
  of parliamentary life, is not assisting Australia to grapple with the
  work and family debate.
• The tyranny of distance
  has forced federal parliamentarians to live lives remote from the rest
  of us.
• In the work and family stretch,
  they are a long way behind most of us. They don't see their children,
  they don't often even prepare their own food, mowing lawns is a bit
  of a luxury, taking their parents out for a Sunday drive is someone
  else's job and visiting relatives in nursing homes is carried out by
  long suffering staff members on their behalf.
• When do they talk to cleaners
  and factory workers, when do they see kids behaving badly at school
  or in shopping centres? Unless they are the occasional constituent come
  to make a complaint, rarely.
• Very often they have partners
  who don't work, or grown up children. Little wonder that they find it
  so difficult to relate to the statistics or the accounts of what's happening
  in the world, and rely instead on their own memories or ideas about
  what should be the case. That's why their daughters are very often invoked
  as the opinion changers.
• The daughter effect I suspect
  is only of limited usefulness in understanding the rate of change in
  policy stance, but I guess it's better than admitting to being swayed
  by focus group research.
• To a lesser extent this
  is also true of senior public servants. With a median age surely more
  than the national average, and a career built on a life time of long
  hours and commitment, it must be the case that many of our most senior
  public sector leaders have also escaped experiencing the daily drama
  of family life in Australia.
• For this reason alone diversity
  in public sector leadership is crucial; without it public policy becomes
  naive, if not just wrong.
• In the mean time, I recommend
  the reading of books you will not enjoy to bridge the gap. Yes, its
  true most public servants aren't farmers or soldiers either, the difference
  here is that we are all members of families.
• It is easy to assume that
  our family experience is like everyone else's, and that we are fit to
  judge how other families' lives work.
• When I worked for the ABC
  I used to think every new board member suffered the same problem- since
  they watched television they thought they knew what good television
  for the rest of us was about.
• Which is all by way of a
  very long introduction to the topic of today-the future of work and
  public policy.
• Having said you should read
  the heart breakers, let me begin with the statistics.
• 61% of mothers in couples
  and 47% of sole female parents have jobs. The female participation rate
  has risen from 36% in 1966 to 55% in 2002.
• Most people are not rich
  professional couples with children in private schools.
• In 1999-2000, median income
  for couples with children under five was $917 per week, including welfare
  benefits. For couples with children over the age of 15, median family
  income was $1,238.
• Among our poorest families,
  mum at home and dad in a full time crummy job is rare.
• Going up the income brackets,
  single income households become more common, although in no category
  are they the dominant family type.
• So fact one- families
  have both parents away from their children for at least part of the
  time. As a consequence, parents with young children, particularly mothers,
  are extremely time poor.
• In 1997, men spent 16 minutes
  a day on average in child care as a main activity, women 45 minutes.
  These figures drastically increase when we take into account multi-tasking
  and the fact that not all people do childcare - amongst people who actually
  did some childcare, men spent an average of 301 minutes a day and women
  spent 488 minutes a day on child care.
• Since 1982, there has been
  a 76% increase in the amount of time that married and de facto women
  spend working. They have managed this extra work in a range of ways,
  including by sleeping less, buying more pre-prepared food, outsourcing
  domestic chores and spending less time on recreation and leisure. In
  1997, women undertook around three quarters of unpaid childcare work,
  and two thirds of housework.
• Now why are they working?
• They're working because
  we're an aspirational culture, we want our children to have more than
  we did, we have endowed them with house prices that make repayments
  in Melbourne and Sydney a substantial portion of earnings.
• In Sydney for example, the
  average mortgage is almost half average weekly earnings, in Melbourne
  its 27%. Overall housing affordability in Australia has dropped by 29%
  in the space of a generation.
• They are working because
  we want them to.
• Australia tends not to favour
  high immigration intakes but does like economic growth. We want to be
  part of this sexy new global market place and we like 3% growth rates
  when the rest of the post-industrial world is wallowing at a third of
  that.
• So we have been quite happy
  to send women to work, children or not. The size of the labour market
  is a direct determinant of economic output and women have been the single
  largest contributors to rising living standards since the seventies.
• They are also working because
  they want to. We are removing discrimination against women because work
  can be an enjoyable and defining activity. Even for time poor mothers,
  paid work can meet a desire for intellectual stimulation or social contact.
• For many women who have
  spent years developing a career, maintaining contact with the workforce
  while their children are young keeps that career alive.
• So Fact Two: Australia
  needs women to work and has actively pursued this policy for thirty
  years.
• Australia's also changed
  the way governments meet their responsibilities; it's cut back on some,
  privatised others, become more efficient, stream lined its payments.
  Old age in particular has been privatised, so has caring for the disabled.
  Governments are increasingly reluctant to pick up the tab and families
  - or individuals, have to meet the need.
• Put that together with the
  demographic shift and no wonder we have unemployment trending to a record
  low and the work force predicted to actually decline, when baby boomers
  start to enter retirement. We get Fact Three: Australian women
  need to work more than they ever have. For their own old age and for
  the sake of the future. There is no turning back.
• Competing with this trend
  is the fact that increasing numbers of working aged people now have
  ageing parents who require care - creating dilemmas for families of
  whether to purchase expensive private services or do the caring themselves.
• The improved health of older
  Australians also means that the types of services provided by the market
  are often not the type of care that our older parents need. You cannot
  pay someone to take mum to the doctor or sort out dad's telephone problem.
• This leads directly to Fact
  Four- work life balance is on a collision course. We have increasingly
  onerous family needs and increasingly onerous work needs. There is only
  one discretionary "choice" area - the number of children we have. No
  wonder the number of only child families has increased from 1 in 5 families
  in 1981 to 1 in 3 families in 2001.
• There are private schools
  in Melbourne and Sydney where half their primary school classes consist
  of only children.
• But that's not everyone.
  For every family reducing its number, there are others struggling along
  with a couple of kids and no body home.
• SO IF THE PROBLEM IS TIME
  MANAGEMENT, WHAT IS THE ANSWER?
• First of all, is it the
  responsibility of government to provide the answer? Is time shortage
  a public policy problem. After all, people choose to have children and
  they choose to work. How they combine those responsibilities is their
  decision.
• Much depends on what you
  think the problems are - frustrating or limiting peoples' choices is
  not in itself a problem, a shortage of time is not of itself a problem.
  But if we can link time shortages directly to health, social development
  and welfare outcomes, then arguably there is a need for governments
  to be involved.
• Surely one of the key objectives
  of government is political stability. As the French revolution taught
  us, political stability is cost effective but is reliant on social stability
  and satisfaction.
• If we assume that giving
  families more time is ineluctably good for them (and there are families
  where this might not be so and there are forms of care away from parents
  that are also useful, such as school and some child care) then how do
  we achieve this?

We either:

• mandate it - by
  making it illegal, for example, for one parent to work or sole parents
  to work; OR
• we provide incentives
  that affect effective marginal tax rates in such a way that the second
  income earner stops work or works less; or
• we regulate and
  encourage industry to provide working conditions more conducive to family
  life; or
• we change gender
  roles so that men and women share evenly in the available time with
  and responsibilities for families.
• Banning two income
  families is clearly out of the question.
• Whether we raise
  EMTRs for second income earners to encourage them to reduce their hours
  of work, or provide funding and further regulation of industry to facilitate
  family-friendly work conditions comes down to three issues: ideology,
  cost and economic efficiency.

Ideology

• My ideological
  starting point is human rights, gender equality and the importance of
  individual choice.
• If good government
  is the employment of scarce resources for the achieving of national
  interest outcomes such as peace, prosperity and safety from harm, then
  good government is also about preserving and advancing the human rights
  of its citizens.
• Increasingly the
  links between countries with legal and social systems that promote and
  protect human rights with economic development are becoming clearer.
  The rule of law and respect for individuals is integral to the efficient
  functioning of the state and its markets.
• We know that good
  governance is a necessary precedent for development. For example, a
  recent international comparison drawing on the World Values Survey results
  concluded that Muslim nations have have a lower commitment to gender
  equality and that this affects the take up of democratic institutions
  in those countries.
• Wherever you look
  in fact, the human rights of women are a litmus test for the rights
  of citizens as a whole.
• While economic
  development is obviously the easiest indicator of prosperity to measure,
  you can predict that wherever women are denied rights, freedoms and
  choices, the rules of law and good governance won't apply in the social
  and political spheres either.
• For this reason,
  I believe it remains important for debates about economic and social
  progress to maintain a human rights focus.
• It remains important
  to acknowledge that individual choices and the capacity of people to
  make those choices are linked directly with prosperity and peace. After
  all, freedom to choose is an underlying assumption of demand and supply
  theory.
• So how do we relate
  this to solving families' time management problem?
• It would be nice
  if we had a one size fits all - if all women wanted to stay home so
  it was just a matter of giving them more money to do so - or if all
  women wanted to work so we adopt policies that enable them to do so.
• In fact women
  will want to choose from a range of options and ideally we should have
  policies that enable both.
• Having said that,
  ideology can also dictate here. If a government was of the strong view
  that all children had a right to one full time parent for the first
  five years of life, it might well provide generous incentives for women
  to do so, and either discouragement or no support for the choice to
  work.
• Alternatively,
  if it believed it was essential for women to remain in the workforce,
  it could put money and legislative effort into work and family arrangements
  and make no provision for women who wanted to do their own parenting.
• Looking further,
  there are assumptions here about what is desirable in family life, for
  the status of women and for who ends up supporting who. In other words
  there are equity implications in these ideologies.
• A fair bit of
  family policy has been driven by ideology in Australia. I am tempted
  to say "sadly" since I think freedom of choice is fundamentally economically
  and socially efficient, but we elect governments to govern and part
  of the package must be their ideology.

Cost and economic efficiency

• Turning now to cost and
  economic efficiency - cost considerations, while also able to be overwhelmed
  by ideology, are in the end part of the efficiency equation.
• Take an ideology which says
  it is better for mothers not to work for the first five years. Government
  subsidies large enough to effectively discourage women from working
  may need to be very high.
• For example even the $4billion
  Family Tax Benefit Part B package has not made a dent in the participation
  rate of women with children under five. This rate continues to rise.
  Sure, it might have risen even more were it not for FTB(B), but the
  point remains that women attach a very high opportunity cost to not
  working and require high levels of income substitution before they will
  leave employment.
• I have not costed a package
  that would enable all women to stay at home for five years but if we
  took the $213 million maternity leave proposal, which assumed women
  would stay home for up to minimum weekly earnings for 14 weeks, and
  multiplied this for all births and for five years, you can see the cost
  stretching to many billions.
• This high opportunity cost
  is not just the consequence of greater training and education investment
  by women but also of their belief that they will need to return to the
  workforce eventually, and that time out of the workforce is associated
  with greater difficulty in returning, in recovering their earnings levels
  and in providing for themselves and their old age.
• This is to say nothing of
  the climate of job uncertainty and contracts. 66% of part time jobs
  are casual. 40% of employed mothers have no leave entitlements.
• I also believe that the
  post war emphasis on human rights and the idea of gender equality has
  firmly established women's right to access public life such as education
  and employment, and women are determined to pursue it.
• This does not mean all women
  want to go back to work. Of course not. As Catherine Hakim, the British
  demographer whose work has been of such interest to the Australian government
  says, many women want to stay at home but feel obliged to work, for
  social and economic reasons. But unless those factors change, then that
  is the reality, not the wish list.
• Equally, in a society that
  elects to promote women in the workforce, the cost of providing first
  class childcare for all children and subsidised work arrangements, as
  the Scandinavian countries have done, is also high.
• Combinations of these policy
  approaches are doubtlessly also very expensive.
• On economic grounds, there
  seems to be no doubt that it is better for the family and for the country
  to retain the investment in the education of women and girls and to
  maximise the size of the workforce and its skilfulness. This is particularly
  the case with baby boomers beginning to leave the labour market.
• As a response to skill shortages,
  it makes sense to engage women in paid work more rather than less. The
  demographic shift that is so rapidly transforming the developed world
  is certainly the biggest challenge to the existing work order. For the
  first time since the great plagues the developed world will experience
  peace-time reductions in the supply of labour.
• In fact over 40,000 Australians
  left our shores permanently last year- the largest number ever- to seek
  a future elsewhere.
• These are likely to be young,
  skilled workers who are directly joining the mobile global economy.
  They will go where there are good wages, political stability and social
  stability.
• Immigration is not the answer-
  skilled migrants are like hens-teeth in the English speaking world and
  we are beginning to compete with other countries, also suffering ageing
  populations. Canada, Hong Kong and the UK are fighting us for our nurses
  and teachers for example.
• Alternatively, we could
  make our existing workers begin working earlier and work until they
  are older. This I understand is the Treasurer's preferred approach.
• We have certainly expanded
  the effective age range of our labour force - while increased education
  has delayed the start of full-time work for young people, most students
  now work at least part time and employers are encouraged to keep workers
  on until well into their sixties- but these mechanisms are also limited
  in effectiveness.
• Enabling more women of prime
  work age to work and mother is, by contrast, an excellent alternative.
• In other words there is
  a strong case for adopting family-friendly industrial practices if these
  produce a total increase in labour effort.
• However, such a restructure
  will also not be without economic price- after all part time work cannot
  produce the same output as full time work, even if it is more efficient
  per hour, and flexible work practices involve administration and management
  costs for employers.
• Mind you, in a post industrial
  society, where knowledge workers out number manual and semi skilled
  workers, it is arguable that there are economic gains to be had from
  happy, refreshed and committed workers that would not once have been
  a consideration.
• Studies of the US stock
  market suggest that employers with good HR practices have better performing
  stocks than those that have not. I assume I don't have to describe good
  hr practice- flexible work hours, part time work with promotional possibilities
  etc.
• A further factor we might
  need to anticipate is the Men's Movement. At the moment the Men's movement
  has an unattractive face - men working very long hours, apparently by
  choice, but then concerned that their sons have no role models and prepared
  to compensate for their own absences by paying men more than women to
  become teachers.
• The Men's Movement also
  wants fifty fifty care arrangements post divorce, without any suggestion
  that men will have to put in equal parenting time while the marriage
  is intact or how they will rearrange their lives to be more involved
  after separation.
• Some analysts are tempted
  to put all this together and warn that a new Gender War is on the way.
  Maybe. But it need not be.
• If the responsibilities
  of child care can be more equally apportioned, if fathers and mothers
  take equal care of their children in intact marriages, then maybe the
  sorts of policy solutions being mooted today will become irrelevant.
• Equality between men and
  women has hit a brick wall- and only the engagement of men in the struggle
  for work and family balance will move equality closer.

Trading off growth for lifestyle

• There is still
  a case for arguing that mature economies like ours may eschew economic
  growth, having decided that the family does not need another coffee
  machine that also makes the bed and chooses your favourite music.
• In this case,
  the value of personal time and of families may increase - again producing
  either an even more family friendly workplace or a gender-based division
  of parenting, based on tax incentives, than exists now.
• The Dutch experience-
  where by law parents can work part time, is instructive. Sixty nine
  percent of women and nineteen percent of men work part time. Terrific.
• Economic growth
  is a quarter of a percent. Terrible? - Or a deliberate choice to trade
  off Time against Things?
• To me there is
  increasing evidence that Australia is reaching a point where this will
  become the key question.
• At the moment,
  there is a lot of problem-describing (like the Pocock book) and blaming
  through the opinion pages of the broadsheets.
• Overall there
  still seems to be a strong assumption that the only option for people
  is to work harder and longer and somehow find a way of squeezing in
  families.
• At least that
  is the debate in the public domain. In fact, a huge number of women
  work part time- Australia has 46% of women workers in part time work.
  In 2001, fifty seven percent of employed mothers worked part time.
• Presumably these
  positions tend to be at the lower skilled end of the market than the
  top end, but it is still a strong sign that many families are voting
  with their feet and attempting to manage time pressures by forgoing
  income.
• Sadly, many of
  those families also expect Dad to work longer and longer to make up
  for the income she has lost.
• Whether or not
  these families are more stable, whether or not their divorce rate is
  lower, their children happier, whether or not these women are likely
  to share equally in the superannuation outcomes come retirement, are
  questions I do not have answers to.
• For their sakes,
  I trust the answers are favourable. In the mean time, 43% of employed
  mothers work full time and do the mother juggle.
• Mums in paid work
  spend less time on personal care than mothers who are full time carers
  and they sleep less. The time use surveys show they spend as much time
  giving child care. Very few dads work part time.
• Are they a harbinger
  of a full blown debate about the need for less things and more time,
  or are they the harbingers of a need for more government intervention
  into family life while both working parents continue to work? It is
  an interesting question.
• Just how our governments
  might engage in and steer these looming cultural wars is another topic
  for another day.

Thank you.

Last
updated 19 September 2002